Author Archive

Gov’s still hopeful on big infra projects

Philippine Daily Inquirer, 01 September 2013

President Aquino sees too many stumbling blocks to the much-needed connector roads that will link the North and South Luzon expressways but remains hopeful that the two alignments separately espoused by San Miguel Corp. and Metro Pacific Investment Corp. will be completed within his term.

Mr. Aquino also expects some other infrastructure projects, including the rehabilitation of the Ninoy Aquino International Airport terminals and other toll roads, to be completed before he steps down from office in 2016.

Commenting on the North-South Luzon connector road projects, he said in a roundtable with the Inquirer staff last week: “To proceed with them, there are too many potential legal issues.” But he added that both projects of SMC and MPIC would be pursued.

“I have to say yes,” when asked whether completion would be doable within his term as earlier announced, but added he was “hesitant to say yes.”

Based on the latest meeting of the technical group working on the projects, Mr. Aquino said there seemed to be an agreement on all positions. The final meeting to address the remaining concerns was scheduled last Friday.

The President also mentioned the connector road project during a forum with the Asia News Network hosted by the Inquirer last week, when a Thai journalist asked what he would do for the Philippines—now Southeast Asia’s fastest-growing economy—if he were to stay in office for 10 years.

The President said he did not want to stay for 10 years as he would like to enjoy the remainder of his life after 2016, but he acknowledged that more infrastructure building was needed.

“We’ve been criticized for lack of substantial infrastructure projects. Unfortunately we have been inheritors of certain laws (whose) purpose is not to serve the general good,” he said. “For example, we have a major highway in the north and south. In the 70s, they planned to connect North and South Expressways so we don’t have go go through the congestion of Metro Manila area. Today it’s still not a reality: The laws that govern the franchises for this road were designed to benefit the crony.”

He said these laws were still existing and the government would have to conform to these particular laws if the country were to have such infrastructure. “That’s an unfortunate stumbling block. We’re trying to navigate this very tricky process so that the project will stand scrutiny by anybody and everybody,” he said.

“Now there’s of course the competing pressure: P2.4 billion in estimated losses everyday due to the traffic and congestion that happens in Metro Manila. Hence, if we have this connector road north to the south, that will bypass it,” he said, adding that the resulting decongestion would improve the quality of life in Metro Manila and translate the P2.4-billion losses into new opportunities.

During the succeeding roundtable with the Inquirer staff, Mr. Aquino said he was referring to two decrees, one of which granted the franchise to Construction Development of the Philippines (CDCP) and the other transferred that franchise to Philippine National Construction Corp. (PNCC).

Taking about the connector road, he said PNCC had the franchise to extend everything and whenever a new alignment would be added, this renewed the franchise by another 30 years in a “walang katapusan” (neverending) cycle. As such, the proponents of the connector road would have to enter into a joint-venture deal with PNCC to comply.

He said there would be a need to go to Congress to repeal these laws, which would mean taking around a year to get a new legislation if it were to be certified as an “urgent” bill.

Meanwhile, Mr. Aquino said Naia Terminal 3 would be “finally 100 percent” operational by next year while the upgrade of Terminal 1—the oldest among Naia’s three terminals—would be completed by December next year. The upgrades of these terminals were meant to be finished before the Philippines’ hosting of the Asia-Pacific Economic Cooperation Summit in 2015.

He also said the four-kilometer Daang Hari would also be among the projects to be completed during this term.

Daang Hari is a major arterial road connecting the rapidly growing towns of Imus, Dasmariñas and Bacoor in Cavite to Metro Manila via the SLEx. This road provides strategic access to Cavite, much-needed relief to traffic in the congested Alabang-Zapote Road and Commerce Avenue.

 

PH studying $2.5-b Luzon railways

Manila Standard Today, 30 August 2013

LEGAZPI City—The feasibility study for the proposed $2.5-billion Philippine National Railways integrated Luzon project will start soon and is expected to be completed within the year, according to the Bicol Regional Development Council.

The Bicol RDC, chaired by Albay Governor Joey Salceda, said it would work with the Public-Private Partnership Center of the Philippines and help provide data for the study.

It will also assist a Canadian consultancy firm in gathering needed additional information on the Bicol section of the project.

The PPP Center tapped CPCS Transcom, a Canadian consultancy firm, to undertake the study for the project, starting with the Bicol section and explore the viability of an expanded Luzon railway system as a convenient, affordable and environment-friendly alternative transport for people and goods.

Salceda said the PPP Center’s feasibility study would cover the entire PNR’s 700-kilometer north and south mainline networks. The Luzon Integrated Railways project is among the most ambitious proposals for PPP of the government.

Salceda initiated a national railways summit in Metro Manila in June and presented the prospects for a modernized “Bicol Express” and “Mayon Limited,” the train services that link Manila to the Calabarzon and Bicol regions.

He said the railways industry should be placed at the center of the national agenda, adding that “railways development should be a natural companion strategy to the Bicol industry cluster, for development to trickle down and sustain development growth.”

Other regions in Luzon, the Metro Manila Development Authority and the Calabarzon RDC also signified interest in the railway development initiative of Salceda, which aims to interconnect the north and south railways to the Metro Manila system.

Train service offers a different and distinctive perspective of the countryside to tourists, both domestic and foreign, as it gives unrestricted view of natural endowments such as Mayon Volcano and Cagsawa Ruins and the greenery of Bicol farmlands and mountains, he said.

PNR officials said the railways transport was a superior alternative option as recently proven in the Legazpi-Naga stretch where a recent one-way test run took one and half hours only, a full hour faster than a bus run. It costs only P82 per passenger, cheaper by about P50 than the current bus fare for the stretch.

 

Gov’t to bid out Manila-Mindanao roro project under PPP scheme

Interaksyon, 19 August 2013

MANILA – The government will bid out a roll-on roll-off (roro) project that promises to cut travel time between Manila and northern Mindanao from two days to 20 hours, according to the Department of Transportation and Communications (DOTC).

Transport Undersecretary Rene Limcaoco said the Central Spine Roro Project will consist of a network of high-speed toll roads and catamaran roro vessels that will pass through the center of the Philippine archipelago.

“This is a big project with an estimated cost of P56.5 billion that we are considering to implement under a Public-Private Partnership (PPP) scheme,” Limcaoco said.

Another project that DOTC is planning to undertake through PPP is the expansion and modernization of the Davao Sasa Port.

“This is one of the country’s busiest ports and it is a known fact that it handles some of our major export products. We expect that by expanding and privatizing it, we can see not just a surge in its capacity by improvements in its efficient handling of goods,” Limcaoco said.

The DOTC last year commissioned state-owned Development Bank of the Philippines (DBP) as transaction advisor for P4.04 billion worth of improvements on the Davao Sasa Wharf in Mindanao.

Davao Port has a capacity of 700,000 twenty-foot equivalent units (TEUs), but state-run Philippine Ports Authority (PPA) forecast volumes to increase to 1.2 million TEUs in the next five years.

Davao Integrated Port Stevedoring Service Corp, a unit of International Container Terminal Services Inc (ICTSI), is the lone cargo handler at Davao Port.

Other major ports that DOTC plans to modernize and privatize include those in Cagayan de Oro, the General Santos and Iloilo, Limcaoco said.

“These are projects that are crucial to this administration’s economic agenda,” he added.

 

 

Statement of DOTC on the Bidding for LRT-1 Cavite Extension

DOTC, 16 August 2013

 

lrt1

Manila, Philippines – Construction will proceed as scheduled on the LRT1 Cavite extension project. The Department of Transportation and Communications (DOTC) made this statement after only one bidder submitted a qualified offer for the project on 15 August.

Secretary Joseph Emilio Abaya said that the bids and awards committee is looking at the possibility of extending the bidding process and reevaluating the existing terms to further address the commercial issues raised by the pre-qualified bidders.

Abaya added that the evaluation would be completed in a week, after which next steps in the bidding process will be announced. The goal of the evaluation and the next steps is to ensure that the construction of the LRT1 Cavite extension will proceed in the second half of 2014, as scheduled.

 

Why ADB is providing more support to PPPs in the Philippines

Devex, 08 August 2013
By: Johm Alliage Morales

 

Philippine’s first major expressway, the North Luzon Expressway, was built, operated and maintained by private company, Manila North Tollways Corporation with the help of a $45 million loan from the Asian Development Bank. The bank is committed to supporting public-private partnerships in the country. Photo by: ADB/ CC BY-NC
The Asian Development Bank is firmly committed to continue its support of private-public partnerships, President Benigno Aquino’s flagship initiative for infrastructure development in the Philippines.
 
Australia, Canada and ADB last week announced that they would be providing an additional $18 million to these projects through the Philippine Public-Private Partnership Center and the Project Development and Monitoring Facility, which finances project preparation costs to ensure the feasibility of projects. Both entities are currently overseeing 25 proposals with total estimated investments with more than $4.2 billion.
 
The latest contributions increase to over $22 million the amount available for capacity building and institutional strengthening so at least 15 PPPs may be implemented or ready by 2016, up from the original target of five projects by the end of 2013 in a country where basic infrastructure badly needs an upgrading.
 
But so far only two tollways and an education project have been successfully bid out, so why is ADB still banking on this idea and what are the institution’s future plans on this? We asked Aziz Haydarov, PPP specialist at the bank’s Southeast Asia Department.
 
Does ADB have plans to tap other donors for this project?
 
ADB is actively involved in development partner coordination platforms to support various areas of Philippine development, including improving infrastructure through fostering PPPs. This coordination occurs at country program level as well as in specific projects. In the area of PPPs, ADB has closely coordinated and cooperated, under the leadership of the government … with the World Bank, IFC, JICA, AusAID and Canada in strengthening PPP enabling environment. As the country now moves to the next phase in PPP program and reforms, ADB will continue to coordinate with the multilateral and bilateral development partners to pro-actively respond to the emerging capacity and institutional strengthening and project finance needs to sustain the positive momentum in PPP reforms. 
 
Why did ADB ask for funding from AusAID and Canada?
 
AusAID and Canada have joined ADB efforts in strengthening the capacity and systems of the government … in transparently managing PPPs to enable more private investment in infrastructure in line with the country’s development plans and public investment program. 
 
Is supporting PPP programs or policy of recipient countries a new focus/strategy of ADB? If so, why?
 
Overall, under ADB’s Strategy 2020, the PPPs are one of the major modalities to help improve infrastructure – one of the core areas of operations — through private finance. At the country level, support to PPPs is one of the areas under the ADB-Philippine country partnership strategy for 2011-2016, which is fully aligned with the Philippine Development Plan for 2010-2016 indicating that the government will rely on PPPs to implement the bulk of its infrastructure program. 
 
What is the role of donor countries and international financial institutions like ADB in the age of PPPs?
 
PPPs are just another — though relatively young — modality to create or maintain public infrastructure. Given their role as supporters of the countries’ public investments, the IFIs will be increasingly involved in PPPs which have become in many countries a regular way of public infrastructure delivery (along with government- or ODA-funded projects). … The role of ADB (and most likely of other IFIs) will be in four areas: advocacy and capacity development, enabling environment, project development, and project financing.

 

PDMF approves pre-feasibility funding for three PPP projects

Business Mirror, 07 August 2013

The Project Development and Monitoring Facility (PDMF) Board has approved pre-feasibility studies funding for three public-private partnership (PPP) projects.

The PDMF Board decides on projects that are being proposed to obtain funding from the PDMF, a revolving fund allocated for funding pre-feasibility studies and obtaining project consultants for projects.

The three projects are the Modernization of the National Center for Mental Health project, the Motor Vehicle Inspection System (MVIS) project, and the Operations and Maintenance (O&M) of the Laguindingan Airport project.

The modernization of the National Center for Mental Health involves the upgrade of the facilities and equipment used at the center. It will involve the relocation of the center to a 10-hectare property in Cavite and the construction of a new building.

The MVIS project involves the upgrade of the vehicle inspection and registration nationwide. Once completed, all vehicles in the country will have to pass not only emission tests but road worthiness and safety tests.

The project will involve the purchase of equipment or new inspection systems as well as software needed for inspection and registration by the Land Transportation Office (LTO).

The O&M of Laguindingan Airport, which has already been previously approved by the PDMF for funding, was recently revised to include the construction of a new passenger terminal in the scope of work of the winning bidder.

Under the original scope of work, the Department of Transportation and Communications was tasked to construct a new passenger terminal along with the construction of airside civil works (runways, apron, taxiway, etc.) and air navigational facilities, landside building works, as well as all other facilities as per International Civil Action Organization (Icao) standards.

The PDMF is managed by the PPP Center and currently has a total funding of $80 million. Around $18 million of the funds were extended by the Australian Agency for International Development and Canadian governments, Asian Development Bank and Canadian government, while the $42 million is from national government funds.

The PPP Center has in its complete pipeline 43 projects in varying stages of development. This includes the Modernization of the Philippine Orthopedic Center whose awarding is ongoing as well as six projects that are in the bidding stage and another project, the Rehabilitation, O&M of the Angat Electric power plant  Auxilliary Turbines 4 and 5, which will be submitted for rebidding.

The list includes a project, the North Luzon Expressway-South Luzon Expressway Connector Road, which has already secured National Economic and Development Authority (Neda) Board approval; the Integrated Transport System Project which is currently being evaluated by the Neda Investment Coordination Committee (ICC); the Civil Registration System-Information Technology Project Phase II which is also currently being evaluated by the Neda-ICC Technical Board; and the Grains Central Project whose structure has recently been finalized and will be submitted for Neda-ICC evaluation.

There are also five projects that are being finalized by specific line agencies of the government; around nine projects that are undergoing their respective feasibility studies; six projects that are currently securing transaction advisers; and 11 projects that are undergoing conceptualization.

 

Photo Release: PHL PPP Program gets additional $3-M support from Canadian Government

PHOTO RELEASE
05 August 2013

 

The Philippine government formally accepted the additional grant contribution of $3-Million from the Canadian government, through the Canadian International Development Agency (CIDA), for capacity building and institutional strengthening of public-private partnerships (PPP) in the country.

On 01 August 2013, the National Economic Development Authority (NEDA), Public-Private Partnership (PPP) Center, Government of Canada, through CIDA, Government of Australia, through the Australian Agency for International Development (AusAID), and the Asian Development Bank (ADB) signed the amendments to the Technical Assistance in support of the Philippine PPP Program.

The additional Canadian contribution allowed the Australian Government to increase its contribution to the Project Development and Monitoring Facility (PDMF) from $15-Million to $18-Million. With the $42-Million counterpart Philippine Government contribution, the PDMF resources now amount to about $60-Million.

The PDMF is a revolving pool of funds managed by the PPP Center to enhance the investment environment for PPP to develop a robust pipeline of viable and well prepared PPP infrastructure projects. Implementing agencies can tap the PDMF to finance the conduct of feasibility studies and provision of transaction advisory services during the actual bidding of their PPP projects until financial close.

To date, 27 PPP projects in the pipeline are PDMF supported. These projects cover various sectors including airports, railways, mass transport system, urban rail, toll roads and highways, water supply, schools, a hospital and agricultural facilities.

 TA Amendment SigningPHOTO L-R: Warren Hoye, First Secretary, Australian Agency for International Development (AusAID), Cosette Canilao, Executive-Director, PPP Center, Rolando Tungpalan, Deputy Director General, NEDA, Neeraj Jain, Country Director for the Philippines, Asian Development Bank and Luke Myers, Counsellor (Development) and Head of Cooperation, Canadian International Development Agency (CIDA). (Photo from NEDA)

 

Australia, Canada hike support for PH’s PPP projects

ABS-CBN News, 01 August 2013

 

MANILA — The governments of Canada and Australia, through the Asian Development Bank (ADB), have increased their contribution to the Philippines’ Public-Private Partnership (PPP) Center and to the Project Development and Monitoring Facility (PDMF).

In a statement, ADB said Australia, through the Australian Agency for International Development (AusAID), provided a $12-million contribution to the PDMF,which is used to finance a project’s preparation costs, and $3 million for capacity building and institutional strengthening.

Canada, meanwhile, is providing $3 million for capacity building and institutional strengthening for PPP projects.

“With the additional funds, at least 15 PPP projects are expected to be implemented or ready by 2016, up from the original target of five projects by the end of 2013,” ADB said.

Australian Ambassador to the Philippines Bill Tweddell noted his country’s support to the Philippines’ PPP program now amounts to $22 million.

“Working together with our partners, Australia is making a difference by helping to improve transparency as well as regulatory and governance arrangements for preparing and tendering viable infrastructure projects. This generates increased private sector investments to fund infrastructure projects that are essential for socio-economic development in the Philippines,” Twedell said.

Canadian Ambassador to the Philippines Christopher Thornley, for his part, stressed his country’s commitment in supporting the Philippines’ PPP program.

“The support to PPP is in line with the Government of Canada’s plan to broaden our engagement with the private sector as the driving force behind sustainable economic growth. By working closely with government, development partners, and the private sector through this multi-donor technical assistance initiative on PPP, we can contribute to sustainable economic growth in the Philippines,” Thornley said.

 

PPP project draws 11 potential bidders

Philippine Information Agency, 31 July 2013

 

QUEZON CITY, July 31 — So far 11 firms have expressed interest in the Cavite-Laguna Expressway (Calax) project, purchasing the pre-qualification documents for prospective bidders after the Department of Public Works and Highway (DPWH) issued out its invitation to prequalify and bid last July 22.

As of July 26, the interested firms include San Miquel Corporation, Korea Expressway Corporation, Alloy MTD Philippines Inc., Macquarie Infrastructure Holdings (Philippines) Pte. Limited, Megawide Engineering Excellence, Leighton Contractors (Philippines),Inc., Makati Development Corporation, AC Infrastructure Holdings Corporation, EGIS Projects Developer of Infrastructure & Service, Metro Pacific Tollways Development Corporation, and Aboitizland, Inc.

Calax is the third project of the DPWH under the public-private partnership mode and has, so far, the biggest project cost at 35.42 billion pesos. It involves the financing, design and construction, operation and maintenance of the entire 4-lane, 47 km closed-system tolled expressway connecting CAVITEX and SLEX. The Project will start from the CAVITEX in Kawit, Cavite and end at the SLEX-Mamplasan Interchange in Biñan, Laguna. The project will have interchanges in 9 locations, namely: Kawit, Daang Hari, Governor’s Drive, Aguinaldo Highway, Silang, Sta. Rosa-Tagaytay, Laguna Blvd., Technopark, and a Toll Barrier before SLEX.

When constructed, the Calax project will decongest traffic along the Cavite Laguna road network as it connects the existing CAVITEX and SLEX roads, reducing the travel time from Metro Manila to the CALA area and back.

According to the project’s invitation to pre-qualify and bid, the submission of pre-qualification documents is slated for September 23, 2013. The two-stage/two envelope system for the open solicitation of bids under the Build-Operate and Transfer (BOT) Law will be applied. Bidders will first be pre-qualified based on minimum legal, technical and financial requirements set by the DPWH. (PPP Center for the Philippines)

 

Two PPPs Move Forward

Business World, 31 July 2013

TWO projects under the government’s public-private partnership (PPP) program moved forward yesterday as three bidders submitted offers for a school building project while 11 firms bought bid documents for an expressway project.

Only three out of the four prequalified firms showed up yesterday to submit offers for the PPP School Infrastructure Project Phase Two (PSIP-II), set to be awarded by the government next month.

Megawide Construction Corp., the Bright Future Educational Facilities, Inc. — Riverbanks Development Corp. consortium, and the BSP & Co. — Vicente T. Lao Construction consortium submitted technical and financial proposals to the Department of Education (DepEd) for the P8.8-billion project. The D.M. Wenceslao and Associates, Inc. — DATEM consortium withdrew from the bidding.

DepEd Undersecretary Francisco M. Varela, procurement, bids and awards committee (PBAC) chairman, said the agency plans to award the project “sometime in the third week of August.”

Mr. Varela added that construction will be in 14 months, after the build-transfer agreement is signed.

“Hopefully, we sign the build-transfer agreement sometime in September,” he said.

According to a DepEd PBAC activity notice, the technical documents will be evaluated from July 31 to Aug. 2, and the mock-up sites, on Aug. 5 and Aug. 6.

The financial proposals, meanwhile, will be opened on Aug. 12.

PSIP-II involves the design, financing and construction of 10,679 classrooms in 14 regions nationwide.

The P16.42-billion PSIP-I was awarded to the Citicore Holdings Investment, Inc. — Megawide and BF Corp. — Riverbanks consortiums last September. PSIP-I covers the construction of 9,301 classrooms in Region 1 (Ilocos), Region III (Central Luzon), and Region IV-A (Cavite, Laguna, Batangas, Rizal, Quezon).

PSIP-II, which was rolled out last December, will be under a build-transfer arrangement whereby DepEd will issue a one-time payment to the winning bidder after the classrooms are built.

PSIP-I, on the other hand, is under a ten-year build-lease-transfer agreement. Its construction is expected to be complete next February.

A successful auction of the PSIP-II would make it the fourth PPP deal to be awarded by the Aquino administration, whose centerpiece infrastructure program has been hit by delays — blamed on the need for extensive reviews — since its launch in late 2010.

CALA-EX
Meanwhile, in a press release yesterday, the PPP Center said that as of July 26, 11 prospective bidders have bought prequalification documents for the P35.58-billion Cavite-Laguna Expressway (CaLa-Ex) project: San Miguel Corp. (SMC); Korea Expressway Corp.; Alloy Mtd Philippines, Inc.; Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.; Megawide; Leighton Contractors (Philippines), Inc.; Makati Development Corp.; AC Infrastructure Holdings Corp.; Egis Projects; Metro Pacific Tollways Corp. (MPTC); and Aboitiz Land, Inc.

The CaLa-Ex project involves the construction of a four-lane, 47.02-kilometer highway that will connect the Manila-Cavite and South Luzon expressways.

The project is expected to decongest traffic in the area, reduce travel time to and from Metro Manila and improve the competitiveness of Region IV-A.

The bid instructions and information memorandum will be available to interested firms until Sept. 20, while prequalification documents have to be submitted by Sept. 23.

The CaLa-Ex project is under the two-stage/two-envelope system where interested firms shall first be prequalified based on legal, technical and financial capacity requirements. Then, the prequalified bidders will be invited to submit their bids.

The submission of qualification documents for CaLa-Ex was originally scheduled last month but was called off by the Public Works department after it decided to remove the official development assistance component of the project, looking to replicate the success of the last PPP auction, where SMC offered an P11-billion up-front payment on top of the P15.86-billion cost of the NAIA Expressway Phase II project.

SMC unit Optimal Infrastructure Development, Inc. was awarded the P15.86-billion Ninoy Aquino International Airport (NAIA) Expressway Phase II project in May.

MPTC is the tollway arm of Metro Pacific Investments Corp., the local unit of First Pacific Company Ltd., which partly owns Philippine Long Distance Telephone Co. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a minority stake in BusinessWorld. – K.M.P. Tubadeza