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Holcim Builders’ Summit 2014

PHOTO RELEASE
28 July 2014
 


 
Speaking before the country’s leaders in the construction industry, Public-Private Partnership Center Deputy Executive Director Atty. Sherry Anne Austria gave an update on the country’s PPP program, the status of its projects and the Program’s sustainability during the Holcim Builders Summit held last July 25, 2014 at the Mind Museum in Taguig City.

The Holcim Builders Summit featured speakers from the various national line agencies undertaking massive infrastructure projects like the Department of Transportation and Communications (DOTC) and the Department of Public Works and Highways (DPWH). Public Works and Highways Secretary Rogelio Singson was the keynote speaker. Other speakers representing the big names in the country’s infrastructure industry are Architect Romulo Nati of the ItalPinasEurasian Design and Eco Development Corp., Mr. Manolito Madrasto of the Philippine Constructors Association, Architect Angelo Mañosa of Mañosa and Co.

General Manager of the Holcim Foundation for Sustainable Construction Mr. Edward Schwarz shared with the participants Holcim’s sustainability framework.

The Summit theme centered on “Building Mindsets and Practices for a Sustainable Future”. With the massive construction activities that the PPP projects entail, construction in the country is predicted to be on the upswing, boosting the country’s infrastructure industry and ramping up economic growth for all.

2014 Annual Convention of the Association of Philippine Correspondent Bank Officers

PHOTO RELEASE
28 July 2014
 


 
The Philippine PPP Program was tackled at the 2014 Annual Convention of the Association of Philippine Correspondent Bank Officers (APCB). Speaking in behalf of the Center, Director Eleazar E. Ricote presented the program’s pipeline of projects and the various policy, process and institutional reform initiatives spearheaded by the PPP Center. He also responded to the APCB’s questions and insights about the role of the local banks in financing PPP projects.

APCB is composed of Financial Institutions (FI) unit representatives from fifteen (15) local banks whose thrust is to unify Philippine Banking Institutions in promoting professional management of FI relationships considering each other’s strategies, risk appetite and competitive position in the market
 

DOTC set to award P64-B LRT 1 Ext

The Philippine Star, 28 July 2014

By Lawrence Agacoili

 

MANILA, Philippines – The Department of Transportation and Communications (DOTC) is set to award this week the P65-billion Light Rail Transit line 1 Cavite extension project to the tandem of infrastructure giant Metro Pacific Investments Corp. (MPIC) and conglomerate Ayala Corp.

Transportation Secretary Joseph Emilio Abaya said the agency would issue the notice of award to the Light Rail Manila Consortium once it receives the board resolution from the Light Rail Transit Authority (LRTA) approving the project.

“Once we receive the LRTA board resolution signed by the principals, we will then issue the notice of award. We hope to do it early or middle this week,” Abaya said.

The NEDA board chaired by President Aquino has approved the offer made last month by the Light Rail Manila Consortium.

Last Friday, the LRTA board finally approved the award of the public private partnership (PPP) project to the lone bidder that submitted a bid last May 28.

Abaya chairs the LRTA board that includes the heads of the Department of Public Works and Highways, Department of Budget and Management, Department of Finance, National Economic and Development Authority, Metropolitan Manila Development Authority, Land Transportation Franchising and Regulatory Board, LRTA administrator, and a representative from the private sector.

The lead member of the group is MPIC Light Rail Corp. with 55 percent while other members include Ayala’s AC

Infrastructure Holdings Corp. with 35 percent and Macquaire Infrastructure Holdings (Philippines) Pte Ltd. with 10 percent.

The consortium was the lone bidder that submitted an offer last May 28 while other prospective bidders including diversified conglomerate San Miguel Corp. (SMC) through SMC Infra Resources Inc., construction giant DMCI Holdings Inc., Filipino-owned Megawide Construction Corp., Spanish-owned Globalvia Inversiones SAU, Eco Rail Services Inc. of businessman Reghis Romero II, and Malaysian-owned MTD Philippines Inc. did not submit bids.

The Cavite Extension project would increase the span of Line 1 from 20.7 kilometers to 32.4 kilometers with a new south endpoint in Niog, Bacoor, Cavite. The extension would open up the Line 1 services to the nearly four million residents of Parañaque, Las Piñas, and Cavite.

More than half of the project cost of the PPP project would cover the construction of the tracks, the stations and all its attendant facilities while P30 billion would be used to purchase the trains to be funded by the government through official development assistance (ODA).

 

MPIC Group to further study Trinoma site for common station

The Philippine Star, 28 July 2014

By Lawrence Agcaoili

 

MANILA, Philippines – Infrastructure giant Metro Pacific Investments Corp. (MPIC), the single biggest shareholder of the Light Rail Manila Consortium, is set to finalize the design of the proposed P1.4 billion common stations that would connect the Light Rail Transit line 1 along Taft Avenue and the Metro Rail Transit line 3 along EDSA.

MPIC president Jose Ma. K. Lim said the consortium has not yet made a decision on the exact location of the proposed common station and is now studying the design approved by the Department of Transportation and Communications (DOTC) and the National Economic and Development Authority (NEDA) at the Trinoma Mall owned by property giant Ayala Land Inc..

“The design as I understand was submitted and we were forced to swallow the design. Now whether it is the most efficient now or not or whether it is the cheapest or most cost effective one we don’t know at this point,” he said.

Lim pointed out that the group would pursue the most efficient and cost effective alternative because the traffic of LRT1 would be affected if the design of the station would not result in efficient transfer of passengers.

According to him, the consortium has the option to change and is now taking a look at the design and would make the necessary adjustments.

“We have the option to adjust the design to make it more efficient but the government would only take up so much of that cost and it is fixed. Anything above that is ours,” he said.

Instead of shouldering the entire cost of P1.4 billion, the DOTC said that there would be pro-rated sharing of the cost of construction between the government and the winning bidder in case there are enhancements by the winning concessionaire on the proposed common station.

The DOTC approved the pro-rata sharing of 70 percent for government and 30 percent for the winning concessionaire.

“We might choose to make another configuration to make it less risky and not costly. It has to be for the benefit of the LRT and the riding public.  It is not for the benefit of one real estate company,” he said.

Next government to inherit fewer PPP headaches

Business World, 25 July 2014

 

A LEGISLATIVE MEASURE meant to end the problems that dogged President Benigno S.C. Aquino III’s key infrastructure program is expected to be passed by Congress by the first semester of 2015, an official of the Public-Private Partnership (PPP) Center said.

A successful passage of that law — sponsored by Mr. Aquino’s key allies in Congress — may prove to be of little use to a presidency left with only a few months in office by then, but still, Mr. Aquino would be leaving a framework that will help the next government pick up from where he left off, and with fewer headaches.

Sustaining the PPP

A staunch advocate of the proposed “Public-Private Partnership (PPP) Act of the Philippines” is the PPP Center, which pitched the bill as something that would ensure the PPP program would be a continuing legacy.

“Now our main challenge is ‘how do we sustain the PPP program?’ The first identified step is to amend Republic Act No. 7718 or the BOT [Build-Operate-Transfer] Law,” PPP Center Deputy Executive Director Sherry Ann N. Austria said at a July 18 economic forum hosted by BusinessWorld.

Sustaining the Philippine PPP program, hailed by global institutions as a model other economies should emulate, is crucial to drawing direct investments, creating jobs and consequently, greasing the economy that has graduated from being the “sick man of Asia” to being the “next Asian miracle.”

Aquino’s departure meant unfinished business — either because the projects have yet to hurdle the complex layers of the approval process or because they face legal questions.

Already, the incumbent government has trimmed its target list of completed PPP projects to just five before Mr. Aquino steps down from power, from a goal of seven 100% done, as existing regulations were unable to shield some contracts from administrative cases or even lawsuits.

Those five projects — already broken ground and expected to be fully complete by 2016 — according to PPP Center Executive Director Cosette V. Canilao, are the following:

• The P16.28-billion School Infrastructure Project (Phase I);
• The P3.86-billion School Infrastructure Project (Phase II);
• 
The P15.5-bilion Ninoy Aquino International Airport Expressway;
• The P2-billion Daang Hari-South Luzon Expressway; and
• 
The P1.7-billion Automatic Fare Collection System

Removed from the original list were the P5.7-billion contract to modernize the Philippine Orthopedic Center, and P17.5-billion project to upgrade the Mactan-Cebu International Airport (MCIA).

Both contracts were already awarded but the Orthopedic Center’s modernization project hit a roadblock when activist groups, health workers and party-list organizations filed a petition questioning the hospital’s privatization.

The Mactan airport project, meanwhile, stalled when losing bidder Filinvest-Changi consortium filed a complaint against winning bidder GMR-Megawide consortium, alleging conflict of interest.

Ms. Canilao told BusinessWorld, in an interview in Makati City in May
, that the orthopedic hospital and MCIA projects should instead be halfway done by the time the next administration steps in.

The proposed PPP law hopes to address the loopholes existing regulations failed to plug.

“Certain policy gaps can only be addressed by legislative amendments,”
Ms. Austria said at the forum.

“The amendments to the BOT law have been identified as one of the
 priority bills, and hopefully, we’ll be able to have it passed by 
first semester of next year,” Ms. Austria added.

“Except the Supreme Court”

The proposed bill inserts a provision that bars trial courts from stopping PPP projects, raising a few eyebrows.

“The proposed amendments of the bill include the following: … (i) Prohibiting the issuance by courts of temporary restraining orders, preliminary injunction or preliminary mandatory injunction against all PPP projects, except the Supreme Court but with a validity period on only six months,” the bill read.

Political analyst Ramon C. Casiple has misgivings over blanket provisions for PPP deals.

“The rationale is for PPP projects to be shielded from nuisance lawsuits. If you go to the Supreme Court, you must have good arguments or the SC will just ignore your petition. That will avoid challenges to the PPP bidding process and also to implementation,” Mr. Casiple said in a phone interview.

“But this is a blanket immunity. It should be limited only to those projects considered by the NEDA [National Economic and Development Authority] of national importance. Otherwise, you’re talking of possible abuse by those in power or businessmen going into PPP,” he pointed out.

Right of way, property tax issues niggle

Two sticky issues the bill targets to resolve are right of way and property taxes.

Those two were the main concerns raised by investors that tried to compete for the P64.9-billion Light Rail Transit Line 1 Cavite Extension project — the largest PPP deal so far bid out.

The government failed in its first attempt to bid out the LRT-1 project, and attracted just one bidder the second time around.

The legislative measure dictates that valuations for property that will be affected by a PPP project be based on updated estimates by the Bureau of Internal Revenue, the Assessor’s office of the municipal government and a government bank.

“One of the major bottlenecks in implementing a PPP project right now 
is the acquisition of right of way (ROW),” Ms. Austria said, although she and government officials could not immediately give information as to how much it would cost government to buy out affected landowners.

“The major deterrent is under the existing RA [Republic Act] 8974, wherein the default mode is negotiation but, on the part of the government, we
 cannot offer a huge amount because under the law only the zonal value
 can be offered,” she explained, noting that “owners will not
 accept [the offer] because it’s very low and the zonal values are not
 updated.”

Data from the PPP Center showed that 92.3% of the right-of-way acquisition requirement for the railway’s Baclaran-to-Dr. A. Santos segment was completed; 69.2% for the Dr. A. Santos-to-Zapote segment; and 84.2% of the Zapote-to-Niog segment.

The P35.4-billion Cavite-Laguna Expressway project, put on ice after rivaling bidders filed an appeal before Malacanang, also faced right of way issues, according to Special Bid Bulletin 14 issued by the Public Works and Highways department.

The bill pushes for the exemption of projects “of national significance” from all local and real property taxes as a sweetener that will lessen the bitter taste of risks tied to PPP projects.

“There are certain provisions that can only be cured or can only be
 addressed by legislative amendments. For instance, most of the local
 government units have been imposing local or real property tax and
 another local taxes on projects of national significance,” Ms. Austria
 said at the forum.

Projects of national significance, as defined by the PPP Center, are those that are able to “generate employment opportunities and follow the Investment
 Coordination Committee (ICC) prescribed parameters.”

Beyond 2016

Other provisions of the proposed PPP law include: treatment of unsolicited proposals, institutionalizing a pool that the government can tap for financing, and amending the franchise of the Philippine National Construction Corp. as the operator of the Nlex and Slex.

The bill also prohibits regulatory bodies from entering into any PPP contract that they regulate.

That jibes with a recommendation by the World Economic Forum (WEF) for the Philippine government to separate the functions of the agencies involved in PPP projects.

“The point here is to establish entities with separate authorities (i.e. policy-making, contracting, monitoring, and dispute resolution) with a clear governance structure in order to avoid any conflict of interests, and to have clear responsibilities and competencies,” Hanseul Kim, associate director and head of engineering and construction industry of the WEF, said in an e-mail interview with BusinessWorld in May.

The wisdom in that statement is obvious.

“This way, authorities can be independent from the political influence or other externalities, and be able to carry out long-term infrastructure plans, often over 10-20 years, that generally exceeds more volatile political duration,” Mr. Kim added.

The PPP bill may be an afterthought since the Aquino administration failed to deliver on its promise to boost the economy with its centerpiece program.

But its passage also means the next administration won’t inherit the problems that Mr. Aquino’s PPP program struggled with.

With the passage too, Mr. Aquino has made sure his centerpiece program would outlast his term.

 

Mactan-Cebu International Airport finished by 2018 as world’s first resort-airport

Angmalaya.net, 25 July 2014

By Uel Balenia

 

Mactan-Cebu International Airport (MCIA) is an existing passenger terminal accepting both international and domestic flights.

The terminal is designed to accommodate 4.5 million passengers a year, however, starting 2011 it was accommodating 6.2 million passengers per year.

MCIA is the second busiest airport in the country. It was listed in the top 20 ASEAN  airports last 2011.

With the said situation, it is indeed timely to rehabilitate and turn the old airport into world-class terminal.

“The project involves the construction of a new world-class passenger terminal building in MCIA, with a capacity of about 8 million passengers per year; and the operation of the old and new facilities. The construction of a new world-class passenger terminal, including all related facilities, is proposed to separately cater to domestic and international operations,” the government said.

Megawide Construction Corp. in partnership with India’s GMR, through public-private partnership, will develop the said airport. It is estimated to be completed coming January 2018.

When finished, it will be the first resort-airport in the world. “The airport terminals will reflect the rich Cebuano heritage in a state of the art design with a soothing resort-like atmosphere conceptualized by international and Cebuano designers,” said Megawide spokesman Louie Ferrer.

 

LRTA Board OKs awarding of LRT extension to MPIC, Ayala

ABS-CBN News, 25 July 2014

 

MANILA, Philippines – After several delays, the Light Rail Transit Authority (LRTA) has approved the awarding of the P65 billion Light Rail Transit Line 1 (LRT-1) Cavite extension project to the tandem of Metro Pacific Investments Corp. (MPIC) and Ayala Corp.

LRTA spokesperson Atty. Hernando Cabrera said the LRTA Board has finally approved the awarding of the project to the Light Rail Manila Consortium based on the recommendation of the Department of Transportation and Communications (DOTC) Special Bids and Awards Committee (SBAC) on Monday.

“The LRTA Board approved the award as recommended by the SBAC,” Cabrera said.

The LRTA Board, chaired by Transportation Secretary Jun Abaya, is composed of officials of the Department of Public Works and Highways (DPWH), Department of Budget and Management (DBM), Department of Finance (DOF), National Economic and Development Authority (NEDA), Metropolitan Manila Development Authority (MMDA), Land Transportation Franchising and Regulatory Board (LTFRB) , LRTA administrator, and a representative from the private sector.

The NEDA Board, chaired by President Aquino, had also approved the offer made by the consortium in June.

According to Cabrera, the LRTA Board gave Abaya the go-signal to sign and issue the Notice of Award and Concession Agreement for the for the public-private partnership (PPP) project.

“Secretary Abaya was authorized to sign and issue the Notice of Award and the Concession Agreement,” Cabrera said.

The LRTA Board’s meeting on the project was postponed twice, the first due to the lack of quorum and the second because of Typhoon Glenda.

The meeting was held Wednesday but the awarding of the project was not discussed because other items in the agenda were prioritized.

The LRTA Board met again Friday morning where the award of the project to the MPIC-Ayala group was finally approved.

The Cavite extension project involves increasing the LRT-1 from 20.7 kilometers to 32.4 kilometers with a new south endpoint in Niog, Bacoor, Cavite.

It aims to provide LRT services to an estimated 4 million residents of Parañaque, Las Piñas, and Cavite.

The project’s bidding faced controversy after SM Prime Holdings Inc. filed a case against the DOTC and LRTA in relation to the transfer of the proposed LRT and Metro Rail Transit common station to Ayala’s Trinoma Mall instead of the original location in SM North EDSA Mall.

SM argued that based on a memorandum of agreement signed in 2009, the common station should be built near its mall and not Ayala’s.

 

LRTA Board clears award of LRT1 Cavite Extension Project to Ayala-MPIC tandem

InterAksyon, 25 July 2014

By Darwin G. Amojelar

 

MANILA – The board of the Light Rail Transit Authority (LRTA) has approved the award of the P64.9 billion LRT Line 1 Cavite Extension Project to the Ayala-Metro Pacific joint venture.

Hernando Carbrera, corporate secretary of LRTA, said the board this morning approved the awarding of contract for the project to Light Rail Manila Consortium.

“The LRTA Board approved the award based on the recommendation of the Special Bids and Awards Committee (SBAC) finding the said recommendation proper and in order,” Cabrera said.

He said the board also authorized Transport Secretary Joseph Emilio Abaya to sign and issue the notice of award and concession agreement.

The LRTA Board is composed of 8 ex-officio cabinet members, chaired by the secretary of the Department of Transportation and Communications (DOTC), with the heads of the Department of Public Works and Highways (DPWH), of Budget and Management (DBM), and of Finance (DOF), of the National Economic and Development Authority (NEDA), the Metropolitan Manila and Development Authority (MMDA), the Land Transportation and Franchising Regulatory Board and of the LRTA as members. The board has one representative from the private sector.

“We will await the LRTA Board resolution approving the BAC’s recommendation to award the project. Once he receives the resolution, Secretary Abaya may then issue the notice of award to Light Rail Manila Consortium,” Michael Arthur Sagcal, DOTC spokesperson said.

To recall, the board of the NEDA approved the P9.35 billion premium that Light Rail Manila offered on top of the project’s P64.9-billion tab.

A tandem between Ayala Corp and Metro Pacific Investments Corp (MPIC), Light Rail Manila was the lone bidder for the project, one of the public-private partnership (PPP) ventures of the Aquino administration.

Jose Ma. K Lim, president of MPIC, had said the company expects the right of way acquisition to start in 2015 and the construction to be completed by 2020.

MPIC has a 32-year concession to operate and maintain the service for LRT.

The southbound extension of LRT1 would increase the train’s span from 20.7 kilometers to 32.4, with approximately 10.5 kilometers of the extension elevated and 1.2 kilometers at grade.

DOTC said more than 500,000 commuters everyday use LRT1, which runs from Baclaran in Pasay City to Roosevelt in Quezon City. The southern part of Metro Manila and neighboring Cavite province is home to nearly 4 million people.

InterAksyon.com is the online news portal of TV5, which like MPIC is chaired by Manuel V. Pangilinan.

 

GenSan to develop modern food terminal, market complex through PPP

PTV News, 24 July 2014

 

The city government is planning to develop within the next three years a modern integrated food terminal and public market complex through the public-private partnership (PPP) scheme.

City Mayor Ronnel Rivera said Thursday they are currently exploring possible investments partnerships with the private sector for the multimillion integrated food terminal and several other major projects through the assistance of the national government’s PPP Center.

He said they signed an internship agreement last week with the PPP Center to expedite the forging of investment partnerships for the projects.

Aside from the integrated food terminal, he said they are planning to link with the private sector for the development of more farm-to-market roads and agri-industrial facilities as well as the expansion and upgrading of the city’s central public market.

“Our goal here is to make GenSan the agri-industrial hub of Region 12. In doing so, we also want to give opportunities to small enterprises as well as open more employment for our constituents,” Rivera said.

Based on their memorandum of agreement, the PPP Center will specifically help capacitate the city government in pursuing PPP linkages for the integrated food terminal and city public market components of the Integrated Economic Development for Regional Trade (IEDRT) in General Santos City Project.

The internship program agreement is part of the PPP Center’s strategy initiative on engaging local government units for PPP linkages.

Under the agreement, the PPP Center, which is an attached agency of the National Economic and Development Authority (NEDA), will provide hands-on training and assistance to the city’s PPP Board, PPP technical working group facilitated by the City Economic Management and Cooperative Development Office and PPP selection committee, which will be in charge with project development and bid management of identified PPP projects.

The agency will also mentor the city’s PPP team in the areas of project development, bidding and competition, and implementation.

Rivera said the IEDRT program is a priority strategic economic support initiative of the city government that is aimed at spurring infrastructure investments and improve the area’s capability to serve as the food and trading center of the greater part of Region 12.

He specifically cited the provinces of South Cotabato, Sultan Kudarat, Sarangani and this city, which forms part the Socsksargen growth area.

“The project seeks to improve the physical and institutional linkages among the various stakeholders of the city’s food chain industry, he said.

The mayor said it also aims to benefit local residents through the creation of a network of food market-related activities that will spur the city’s economic development while also expanding access to quality and healthy food at a regional scope.

He said a pre-feasibility study on the program was commissioned by the Cities Development Initiatives for Asia in response to the request of the local government for a pre-assessment of the economic situation of the city.

In support of the project, the city council earlier passed a resolution approving the PPP implementation and another measure that authorizes the mayor to enter into an internship program agreement with the PPP Center.

“One of the problems in implementing PPPs here in the city is that no one has the exact knowledge on how to do it. This assistance coming from the PPP Center will be a great help so that we, in the local government, can finally engage knowledgeably in such ventures,” Rivera said.(PNA)

 

GenSan to develop food terminal, public market thru public-private partnership

Minda News, 24 July 2014

 

GENERAL SANTOS CITY (MindaNews / 24 July) – The city government is planning to develop within the next three years a modern integrated food terminal and public market complex through the public-private partnership (PPP) scheme.

City Mayor Ronnel Rivera said they are currently exploring possible investments partnerships with the private sector for the integrated food terminal and several other major projects through the assistance of the national government’s PPP Center.

He said they signed an internship agreement last week with the PPP Center to expedite the forging of investment partnerships for the projects.

Aside from the integrated food terminal, he said they are planning to link with the private sector for the development of more farm-to-market roads and agri-industrial facilities as well as the expansion and upgrading of the city’s central public market.

“Our goal here is to make GenSan the agri-industrial hub of Region 12. In doing so, we also want to give opportunities to small enterprises as well as open more employment for our constituents,” Rivera said in a statement.

Based on their memorandum of agreement, the PPP Center will help capacitate the city government in pursuing PPP linkages for the integrated food terminal and city public market components of the Integrated Economic Development for Regional Trade (IEDRT) in General Santos City Project.

The internship program agreement is part of the PPP Center’s strategy initiative on engaging local government units for PPP linkages.

Under the agreement, the PPP Center, which is an attached agency of the National Economic and Development Authority, will provide hands-on training and assistance to the city’s PPP Board, PPP technical working group facilitated by the City Economic Management and Cooperative Development Office and PPP selection committee, which will be in charge with project development and bid management of identified PPP projects.

The agency will also mentor the city’s PPP team in the areas of project development, bidding and competition, and implementation.

Rivera said the IEDRT program is a priority strategic economic support initiative of the city government that is aimed at spurring infrastructure investments and improve the area’s capability to serve as the food and trading center of the greater part of Region 12.

He specifically cited the provinces of South Cotabato, Sultan Kudarat, Sarangani and this city, which forms part the Socsksargen growth area.

“The project seeks to improve the physical and institutional linkages among the various stakeholders of the city’s food chain industry, he said.

The mayor said it also aims to benefit local residents through the creation of a network of food market-related activities that will spur the city’s economic development while also expanding access to quality and healthy food at a regional scope.

He said a pre-feasibility study on the program was commissioned by the Cities Development Initiatives for Asia in response to the request of the local government for a pre-assessment of the economic situation of the city.

In support of the project, the city council earlier passed a resolution approving the PPP implementation and another measure that authorizes the mayor to enter into an internship program agreement with the PPP Center.

“One of the problems in implementing PPPs here in the city is that no one has the exact knowledge on how to do it. This assistance coming from the PPP Center will be a great help so that we, in the local government, can finally engage knowledgeably in such ventures,” Rivera said.