March 2024
Luke Hung and Sally Yang
Amendments of the Enforcement Rules of Act for Promotional of Private Participation in Infrastructure Projects were issued by the Ministry of Finance on December 28, 2023, under the decree number Tai-Cai-Tsu-11225539780, and came into effect on the date of publication. The key points of this amendment are as follows:
1. Definition clarification for different types of public construction
In accordance with Article 3 of the Promotional of Private Participation in Infrastructure Projects (hereinafter referred to as the “PPP Act”[1]), the categories of public construction and services are expanded to include the definitions of “audiovisual facilities,” “green energy facilities,” “resource recycling facilities,” and “digital construction”:
A. Audiovisual facilities: Refers to exhibition, performance, production, distribution, and screening. (Article 12)
B. Green energy facilities: Refers to construction, maintenance, testing, etc., related to the generation, conservation, efficiency enhancement, load suppression, transmission, distribution, or storage of clean energy sources. (Article 15)
C. Digital infrastructure: Refers to the digital hardware and software facilities required for promoting advanced networks, reducing digital divides, accelerating industrial digital transformation, and promoting cross-domain innovative applications. (Article 25)
D. Additionally, the scope of “health, welfare, and medical facilities” is expanded to include: elderly welfare institutions, disability service organizations, and long-term care service organizations. (Article 8)
2. Public access to tender documents:
To gather opinions from potential investors before announcing public construction projects and to ensure the fairness and reasonableness of tender conditions and reduce the risk of performance disputes in PPP cases, this amendment adds types of cases that should undergo public access to tender documents before seeking private participation. These cases include those falling under one of the following circumstances:
A. Major public construction projects.
B. Build-Transfer-Operate (BTO) projects conducted under Article 8, paragraph 3, of the PPP Act.
C. Acquisition of public service projects under Article 9-1 of the PPP Act.
D. Other cases deemed necessary by the competent authority.
The competent authority shall make the tender documents available for public access at designated places or electronically on the official website for a period of no less than ten days. (Article 61)
3. Range of negotiation compensation for unsigned agreements:
In accordance with Article 45 of the amended PPP Act, if the competent authority decides not to proceed with or sign a contract due to policy changes or public interest considerations before signing the contract, it shall notify the preferred applicant in writing and negotiate compensation with them. The scope of compensation may include reasonable expenses incurred by the applicant in preparing the application and those arising from reliance on the assessment. This amendment also specifies that reasonable expenses may include the following:
A. Actual costs incurred by the preferred applicant during the application preparation stage before the review.
B. Actual costs incurred by the preferred applicant during the negotiation stage before signing the contract. (Article 70)
[1] Regarding the relevant content of the amended provisions of the parent law, please refer to our newsletter “The Legislative Yuan of Taiwan Is Reviewing the Draft Partial Amendments to the Act for Promotion of Private Participation in Infrastructure Projects Submitted by the Executive Yuan” on May 2022 and “Announcement of Partial Amendments to the Act for Promotion of Private Participation in Infrastructure Projects by the Presidential Decree” on March 2023 for details.
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