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: ADBCC 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)