BOI IPP Guidelines – Preferred Activities: Infrastructure


This covers transport, water, logistics, waste management facilities, physical infrastructure (tollways and telecommunication facilities) and PPP projects.


A. Transport

This covers air, water and land mass transport.

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1. Air Transport

Air transport operation includes passenger and/or cargo operation for commercial purposes.

Lease with option to purchase an aircraft may be allowed.

Acquisition of additional brand new aircraft/s may be registered as new.

Application for registration must be accompanied by an endorsement from the Civil Aeronautics Board (CAB), when applicable. Such endorsement must contain information on the routes to be served.

Prior to start of commercial operation of each aircraft, the registered enterprise must submit a copy of the Certificate of Airworthiness issued by Civil Aviation Authority of the Philippines (CAAP).

Only revenues derived from cargo air freight fares, passenger air fares, and income from ancillary revenues on refund, cancellation and rebooking fees shall be entitled to Income Tax Holiday (ITH). Incidental revenues such as those earned from excess baggage (including prepaid baggage), seat selector options, merchandise sales such as sale of meals/beverages, souvenirs, travel related products and other commodities, package tours and other incidental revenues as may be determined by the Board shall not be entitled to ITH.

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2. Water Transport

This covers domestic/inter-island shipping, i.e. pure cargo, passenger, and passenger-cargo vessel operations including RORO Terminal System operations.

The following are the qualifications for registration:

• Must comply with the following age requirements:

Type of Vessel Maximum Age from Original Date of Launching
Tankers 10 years
High-speed Craft 5 years
Passenger/Cargo 15 years

The age of the vessel shall be reckoned from the ship’s date of launching based on the Builder’s Certificate or Vessel Registry and must be complied with at the time of application.

• Tankers, High-speed Craft, RORO Vessels serving primary routes and Passenger/Cargo vessels must have gross weight of 150 GT and above.

Application for registration must be accompanied by the following:
i. an endorsement by MARINA; and
ii. proof of accreditation of the shipping enterprise by MARINA.

Prior to start of commercial operation, the registered enterprise must submit the following:

i. proof that the vessel is registered with MARINA, and
ii. copies of Class and Statutory Certificates as required by MARINA.

RORO operator/enterprise serving missionary routes, as indicated in the Certificate of Public Convenience (CPC) issued by MARINA, may qualify for pioneer status.

Acquisition of additional vessel/s may be registered as new project.

Lease or charter of foreign-owned vessel with option to purchase may be allowed. Pure lease or bareboat charter may be allowed provided the lease contract is for a minimum of 5 years.

Modernization of ships may be allowed with entitlement to ITH limited to investments in safety and navigation devices and equipment. Investments in anti-pollution devices and equipment may be additionally considered in the computation of ITH rate of exemption.

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3. Land Mass Transport

This covers mass transport using brand new Alternative Fuel Vehicle (AFV) buses.

AFV buses shall be limited to buses that run on electric batteries, compressed natural gas, or hybrid vehicles that run on electric batteries and gasoline/diesel/other fuels.

The following are the qualifications for registration:

• Must utilize brand new electric buses or other AFV buses with at least Euro 4 compliant engine and using Euro 4 fuel;

• Must have its own terminal and garage that can accommodate all the buses under its franchise.

Application for registration must be accompanied by a copy of the application for franchise with the Land Transportation Franchising & Regulatory Board (LTFRB).

Prior to start of commercial operation, the registered enterprise must submit a copy of its franchise from the LTFRB.

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B. Water Supply and/or Distribution

This covers bulk supply projects and new water distribution systems.

Applications covering both supply and distribution projects shall be unbundled showing the revenue and cost structure of each.

Supply of water shall be limited to treated water and should be in accordance with the Philippine National Standard for Drinking Water.

Distribution activity should include extraction of water, treatment and installation of distribution lines and flow metering systems.

Application for registration must be accompanied by a copy of the Water Permit.

Prior to start of commercial operations, the registered enterprise must submit a copy of the CPC.

Projects involving any of the foregoing areas of water operations dedicated to a particular industrial estate, industrial community, or subdivision are not qualified for registration under this listing.

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C. Logistics

This covers ports, terminals (cargo terminals/container yards, LNG/CNG storage terminals, natural gas refueling stations and charging stations for electric vehicles), and warehouses.

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1. Ports

This covers the development and operation of airports and seaports.

Application for registration must be accompanied by an endorsement from the CAAP or the Philippine Ports Authority (PPA), whichever is applicable.

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2. Terminals

(a) Cargo Terminals/Container Yards

This covers terminals/yards handling solid or liquid cargo.

The following are the qualifications for registration:

• Must have new facilities; and
• Must have a system of ingress and egress to prevent traffic buildup/obstruction of thoroughfares on a 24-hour basis as certified by DOTC, MMDA and/or other concerned agency.

(b) LNG/CNG Storage, Distribution and Marketing

This covers the establishment and operation of storage, distribution and marketing facilities for the bulk handling/sale of natural gas in accordance with relevant Philippine National Standards (PNS).

This also covers the establishment and operation of natural gas refueling station and related infrastructures and facilities in accordance with relevant PNS. Foreign-owned stations must comply with the Retail Trade Law (R.A. No. 8762).

For marketing, distribution and refueling stations, the registered enterprise must submit a copy of its Permit to Operate and Supply Natural Gas issued by the DOE prior to start of commercial operations.

For storage, the registered enterprise must submit a copy of its Permit to Operate issued by the DOE prior to start of commercial operation.

The following are the qualifications for registration for storage, marketing and distribution:

• Must have new facilities;
• Must cater to power plants, industrial plants, shipping vessels, commercial establishments or land transport; and
• Must cater to at least 1 clientele, other than the proponent’s own business.

(c) Charging Stations for Electric Vehicles

This covers the establishment of charging stations for electric vehicles. The charging stations could refer to a ‘service station’ designed to simultaneously fast charge multiple vehicles similar to gasoline/diesel stations or a network of at least 5 charging stands.

Application for registration must be accompanied by an endorsement from the Department of Energy (DOE).

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3. Warehouses

This covers the establishment of automated warehousing facilities with automated retrieval systems, conveyors, cranes and other cargo handling equipment.

This also covers distribution or fulfilment centers.

Only revenues generated from services rendered to other enterprises may be entitled to ITH.

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D. Waste Management Facilities

This covers the establishment of toxic and hazardous waste (THW) treatment facilities.

The following are the qualifications for registration:

• Must involve treatment, storage and disposal (TSD);
• Must be capable of handling THW; and
• Must handle only locally generated wastes.

Prior to start of commercial operation, the registered enterprise must submit a copy of its TSD Registration Certificate issued by the Environmental Management Bureau (EMB) of the DENR. If handling radioactive wastes, the registered enterprise must submit a copy of the License to Operate a Radioactive Waste Management Facility from the Philippine Nuclear Research Institute (PNRI) of the Department of Science and Technology (DOST) in addition to the TSD Registration Certificate.

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E. Physical Infrastructure

This covers tollways, and telecommunication facilities.

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1. Tollways

This covers the development, including rehabilitation, upgrading, and/or expansion, and/or operation of tollways.

Upgrading of existing physical infrastructure may be registered as a new project provided that the cost of upgrading already approximates at least 90% of the prevailing cost of constructing a new physical infrastructure, as certified by the concerned agency.

If the cost of upgrading of the physical infrastructure is less than 90% of the prevailing cost of constructing a new physical infrastructure, the project may be registered as a modernization activity but not entitled to ITH.

For projects that will involve the development and operation of physical infrastructure to be undertaken by separate entities, both the developer and operator may qualify for registration. However, the developer may be entitled only to incentive on capital equipment directly needed for the operation of the physical infrastructure.

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2. Telecommunication Infrastructure

This covers the establishment of new telecommunications infrastructure in the provinces particularly in the rural areas as endorsed by the National Telecommunications Commission (NTC) and utilizing at least fiber optic technology.

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F. PPP Projects

This covers projects implemented under Republic Act 6957, as amended by Republic Act 7718 (Amended Build-Operate-and-Transfer Law).

Application for registration must be accompanied by an endorsement from the Public-Private Partnership (PPP) Center.


Reference:
http://oshdp.com/wp-content/uploads/2014/02/2013-IPP-General-Policies-and-Specific-Guidelines.pdf (accessed June 18, 2014).