Archive for the ‘News’ Category

DOTC woos UK investors for PPP deals

Inquirer, 19 September 2014

MANILA, Philippines—The Department of Transportation and Communications made a pitch to British investors and trade officials Thursday as it seeks to drum up interests for upcoming infrastructure deals under the administration’s public-private partnership program.

Transportation Undersecretary Rene Limcaoco made the presentation in Manila as President Aquino was in Europe on an official visit, partly to promote about $20 billion worth of PPP deals still in the pipeline.

Part of the department’s own pipeline on Thursday involved big-ticket airport and railway deals, as the department seeks to address an infrastructure gap needed to support the current pace of economic growth.

The DOTC, for example, said that about P109.6 billion would be invested in various airport projects across the Philippines, partly to attract more tourists, Limacaoco said.

“We need interested bidders. To enthuse interested companies to bid, we commit to a fair, transparent and level playing field,” Limcaoco told participants during the UK Transport Solutions forum on Thursday.

In terms of PPPs, the government was seeking final approval for at least six provincial airport deals, or those in Laguindingan, Bohol, Puerto Princesa, Iloilo, Bacolod and Davao. Limcaoco said these would be ready for rollout in the fourth quarter of 2014.

The government was confident in airport PPPs, after drawing strong interest for the P17.5-billion Mactan Cebu International Airport deal, which was won by the consortium of Megawide Construction Corp. and India’s GMR Infrastructure last April.

“We want to expand Philippine tourism. Tourism is a low-hanging fruit that will sop up excess underemployment that the Philippine economy also has,” Limcaoco said.

Big-ticket railway deals also include the operations and maintenance of Light Rail Transit Line 2, the $1.5 billion North-South Commuter rail line, a $3 billion mass transit system loop and the LRT-1 Dasmariñas extension.

Limcaoco said the existing railways serving Metro Manila account for only 6 percent of trips today but the figure is seen to increase to 17 percent to 18 percent after new and expansion railway projects are built.

“In the Philippine transportation sector, the biggest challenges include the need to fill the infrastructure gap and deliver services to ensure mobility in a fast growing country,” Transportation Undersecretary Jose Perpetuo Lotilla said in a prepared speech.

 

PNoy calls for broader French ties

Manila Standard Today, 18 September 2014

By Macon Ramos-Araneta

 

President will attend business meetings on Wednesday with French companies, which have established presence in the Philippines, and call for broader partnerships in “the wealth of opportunities” in the country, a presidential spokesman said.

Edwin Lacierda said Aquino will join the meetings with Airbus, Schneider Electric and Teleperformance and witness the signing of agreements during his two-day visit to Paris, France on September 17-18.

These companies have already established their presence in the Philippines, two of them for almost two decades, Lacierda said.

The visit to France was the third stop of a four-nation working trip to Europe. He has been to Spain and Belgium.

In France, where there are 46,000 Filipinos, Aquino will meet the Filipino community in the Chapelle Sainte Bernadette. From Paris, the president will proceed to Germany and the United States.

Lacierda said Aquino will meet French President Francois Hollande before attending the business meetings to discuss economic and cultural cooperation, health issues and disaster risk reduction and management.

He said Aquino will also have bilateral meetings with Prime Minister Manuel Valls and “topics such as the Filipino community in France and developments in the Philippine economy will be discussed.”

In Belgium, Aquino told businessmen the  government has leveled the playing field for all players in the Philippines, making the country a good investment destination, citing the $1.3 billion worth of public-private partnership projects that have been implemented.

“There is indeed a wealth of opportunity in the Philippines, and we hope to forge new partnerships or even broaden the existing ones in the near future—partnerships where all parties involved will benefit and will contribute to the rise of Asia’s new tiger,” Aquino said.

He said the Gross Domestic Product (GDP) as of the second quarter of 2014 was 6.4 percent, and the government predicts the economy to hit its target of 6.5 percent to 7.5 percent GDP growth by the end of the year.

“As it turns out all investors needed to see was a government dedicated to integrity and public service. We do not have to look beyond the area of public-private partnerships in order to see the transformation that has taken place in industry,” Aquino said.

He said the public-private partnerships were ideal ventures because all parties benefit: private enterprise profit by putting their expertise and knowledge and other resources to good use; government is able to complete large projects for the benefit of the people.

“From a mere promise of reform that we gave businessmen back in 2010, today, the results of our good governance agenda have allowed us to come so far, as we stand in front of so many potential partners,” Aquino said.

 

 

Higher airport fees await Cebuanos

Inquirer Visayas, 18 September 2014

By  Carmel Loise Matus

 

LAPU-LAPU CITY—It could soon be more expensive for passengers to use the Mactan Cebu International Airport (MCIA), the second busiest airport in the country.

Terminal fee for international flights would increase from P550 to P750 and domestic flights from P200 to P300.

If approved by Transportation Secretary Joseph Emilio Abaya, an MCIA board resolution issued on July 1 and which seeks the fee increase, would take effect on Oct. 1, or a month before the consortium GMR Megawide Cebu Airport Corp. takes over airport operations and management.

Nigel Paul Villarete, MCIA general manager, said the MCIA hopes to collect the increased fees by Oct. 1 because there are facilities in the airport that would have to be improved but are not covered by the concession agreement with GMR.

He said the airport revenue now is enough only for salaries of personnel after it dropped from P1.5 billion to P500 million yearly as a result of the concession agreement, which leaves to the MCIA the task of maintaining the runway.

GMR handles terminal operation and management.

Villarete said there are several infrastructure projects that would have to be financed by the MCIA. One of these is runway improvement, which would cost P350 million, he added.

Villarete said raising funds for MCIA projects through terminal fees would be a more reliable endeavor than relying on funds from the national government.

“Our experience shows us the disadvantages of (waiting for funds from the national government), resulting in delays and congestion in many of our airports,” Villarete said.

At a recent public hearing, lawyer Jose Bernas asked if the increase was included in the concession agreement between GMR and the Department of Transportation and Communication (DOTC).

Bernas’ law office represented Sen. Sergio Osmeña who filed a case against DOTC to stop the award of the MCIA contract to GMR.

Villarete said the increase was in compliance with the agreement. Under the agreement, GMR is allowed to seek an increase in terminal fees every five years.

During the public hearing, Villarete said portions of the increase being sought by MCIA would go to GMR.

At least P181 of the P300 being sought by MCIA as terminal fee for domestic flights would be for GMR. MCIA would get P76.40.

In the proposed P750 in international terminal fee, P353 would go to GMR Megawide and P143.80 to MCIA.

 

Calax delay sends wrong signal to PPP investors–McQuarie

Business Mirror, 17 September 2014

By Cai U. Ordinario

 

The delay in the implementation of the Cavite-Laguna Expressway (Calax) would send a negative message to international investors who would like to invest in the country’s various public-private partnership (PPP) projects.

At the sidelines of the second day of the Asian Development Bank (ADB) Transport Forum on Tuesday, McQuarie Capital Infrastructure, Utilities & Renewables Asia Executive Chairman John Walker said this is despite the Philippines still being regarded as the “darling” in PPPs in Asia.

“I think it will have a global negative impact if that due process and the properly arrived at result is [not] respected: It will have a lot of consequences,” Walker told reporters.

“At the moment, the Philippines is the darling of PPPs in Asia but, if there’s some interruption to the process that’s being followed, from the perspective of international investors, [it will send a negative message],” he added.

Walker said, however, that their company is still keen on undertaking PPPs in the Philippines. The company is currently involved in a number of PPPs, including the P64.9-billion LRT Line 1 Cavite Extension Project, as well as the Philippine Investment Alliance for Infrastructure (PINAI) fund.

The $625 million worth PINAI fund, launched in 2012, aims to finance various infrastructure projects in the country. The fund is managed by Macquarie Infrastructure and Real Assets (Mira).

The biggest chunk of the fund, around $400 million, was put in by the GSIS, while Manila-based ADB put up $25 million. The rest was put up by APG and the Mcquarie Group.

“We’re really excited about this market. Its just been a wonderful experience for ourselves the last couple of years. We’re very committed to growing here because there’s obviously a big need for new infrastructure and we just hope that government decision-making remain consistent. Consistency, as you’re hearing, is very, very important,” Walker said.

On June 30 President Aquino issued a stay order on the decision of the Department of Public Works and Highways to bar the Optimal Infrastructure Development Inc. from bidding on Calax.

The stay order was the President’s reaction to the appeal of the Optimal Infrastructure Development Inc. to reconsider its bid for the expressway.

The project is a 47-kilometer thoroughfare that would start from the Manila-Cavite Expressway in Kawit, Cavite, and end at the South Luzon Expressway (Slex)-Mamplasan Interchange in Biñan, Laguna. It consists of nine interchanges and a toll barrier before the Slex.

The third PPP project under the public works agency, the expressway is seen to decongest traffic along the Cavite-Laguna road network. Construction of the multibillion-peso expressway is expected to start by October next year and completed by September 2017.

 

President plays salesman for ‘Asia’s next tiger’

Philippine Daily Inquirer, 18 September 2014

By Christian V. Esguerra

 

BRUSSELS—President Aquino played salesman on Tuesday and invited European businessmen to invest in various private-public partnership (PPP) projects underway, urging them to “contribute to the rise of Asia’s next tiger.”

In a gathering of potential investors at the Sofitel Hotel here, the President described a new business climate under his watch, one that claims to offer a “clear potential for profitability” and “a level playing field.”

“Today, I am confident in telling you: Take a look at what we have to offer,” he said.

“There is indeed a wealth of opportunity in the Philippines, and we hope to forge partnerships with you in the near future—partnerships where all parties involved will benefit, and will contribute to the rise of Asia’s next tiger.”

The President’s sales pitch came with a glossy booklet detailing investment opportunities in the Philippines and with the words, “Now is the best time to invest” there.

Robust pipeline

“Under the hallmark of good governance, the Philippine government guarantees that the private sector will be able to do business in an environment that nurtures fair and transparent transactions,” it said.

It outlines a “robust pipeline of PPP projects” such as the P122.8-billion Laguna Lakeshore Expressway Dike Project, the P35.4-billion Cavite Laguna Expressway Project, and the P64.9-billion Light Rail Transit Line 1 Cavite Extension Project.

“Under our administration, we get the infrastructure we need quicker than if we remained reliant on our budget process,” Aquino said.

“On top of that, investors can see a clear potential for profitability, so much so that they provide incentives for government in the form of premiums. The state is thus afforded the best possible bid because of a level playing field, which engenders fair competition among interested parties.”

Easy to set up shop

Aquino said business permits could now be obtained in three days, compared to the three-month, 10-step process before he took office.

“Streamlining the process of setting up shop in the Philippines eliminated opportunities for corruption and redounded to savings in the time and energy of companies,” he said.

“Unfortunately, for the past three administrations, the scales were unbalanced: Every incentive was seemingly put on the table just to be able to attract investors—from commercial development rights, to subsidies. Not to mention the fact that only six solicited projects were awarded in the 18 years before we entered office in 2010.”

From December 2011 until this month, he said his administration had either awarded or signed off on eight solicited PPP projects worth P62.6 billion.

In a speech on Tuesday at a forum organized by Egmont Institute, a think tank based in Brussels, Aquino declared, “I am proud to say to all of you: The Philippines is well and truly back in business.”

The President said the Philippines, with its economic resurgence, was now playing an “increasingly prominent role” as Southeast Asia builds a community working to achieve “security, peace and prosperity for its peoples.”

“I invite all like-minded people, communities and nations to join us,” he said. “Let us combine our strengths with yours; let us share lessons with one another, and together, accelerate our pursuit of the goal of improving everyone’s lives.”

Just getting started

Aquino said the Philippines, one of Asia’s fastest-growing economies, was just getting started.

“This is only the beginning,” said Aquino, who trumpeted government investments in health, education and other social services.

“These programs were designed with the long term in mind. They pave the way to a populace that is healthier, more educated and more equipped to take advantage of the opportunities that are becoming increasingly available,” he added.

“These are only a few of our accomplishments, but from these alone, it is clear: Good governance is making waves across the archipelago.”

In parading the gains of his administration, the President assailed his predecessor, former President Gloria Macapagal-Arroyo, before his international audience at the Château of Val-Duchesse.

Aquino described his election in 2010 as a “resounding statement” of voters that the “systemic pillaging of state coffers must end, and government must go back to serving its true bosses—the Filipino people.”

He made as exhibits of his anticorruption campaign the plunder case filed against Arroyo, the removal of former Chief Justice Renato Corona, and the impeachment of then Ombudsman Merceditas Gutierrez.

“My predecessor… is under hospital arrest as she faces two serious unbailable charges, with another one still being reviewed by the Ombudsman,” he said.

Investment driven

The 6.3-percent average economic growth from 2006 to 2009, the final years of Arroyo, was driven mainly by consumer spending with a bulk of the money coming from remittances from abroad.

“This meant that our economy was highly vulnerable to shocks not just in our own country, but in the host and receiving countries as well,” he said.

“This is why, over the course of our administration, we have worked to regain control of our economic destiny. We have made early strides in making Philippine growth more investment-driven, which is more sustainable,” he added, noting that the economy grew by an average of 6.3 percent from 2010 to 2013.

Prior to his term, Mr. Aquino said the Philippines was “mired in a vicious cycle of corruption, deceit and negativism.” He described Arroyo’s term as a “lost decade,” a period where “massive opportunity [was] squandered by a government that, instead of laying foundations for growth, focused on political self-preservation.”

“Some people had grown so apathetic that it seemed that the only ambition for them was to leave the country to look for better opportunities,” he said.

“Despite this, the previous administration had the temerity to claim credit for continued growth, which was actually fueled by Filipinos who were working abroad.”

Mr. Aquino said the Philippines was now enjoying “newfound vitality” that “can be felt in the optimism of the common Filipino.”

Originally posted at 6:39 pm | Wednesday, September 17, 2014

DOTC taps HK firm for MRT 3 expansion

The Philippine Star, 18 September 2014

By Lawrence Agcaoili

 

MANILA, Philippines – The Department of Transportation and Communications (DOTC) has tapped a Hong Kong-based consultant for the ongoing P3.8-billion capacity expansion project involving the acquisition of 48 brand-new trains for the Metro Rail Transit Line 3 (MRT-3) along EDSA.

The DOTC awarded the P2.73-million contract for the engagement of a highly technical consultant for rolling stock and depot equipment for the MRT-3 capacity expansion program to Neil Heaton.

Based on his LinkedIn profile, Heaton is general manager of Asia United Group Limited Rail and owner of ReRail Consultants. He has a 40 years of experience in the rail industry with expertise on rolling stock, maintenance and depot infrastructure projects.

The contract is valid for two months but is renewable at the option of the DOTC. DOTC Undersecretary Rene Limcaoco approved the awarding of the contract upon the recommendation of DOTC assistant secretary Sherielysse Bonifacio.

Last January, the DOTC awarded the MRT-3 capacity expansion project to CNR Dalian Locomotive and Rolling Stock Co. of China for the acquisition of 48 brand-new light rail vehicles.

Transportation Secretary Joseph Emilio Abaya said the new train cars are the crucial solution to long lines by increasing passenger capacity by 66 percent to 800,000 per day from the current 350,000.

This means the current three-car configuration would be made into four-car sets arriving at 2.5-minute intervals instead of the current three-minute intervals.

Abaya said the prototype unit of the new train cars would be tested on the system by August next year and three to four brand-new trains would be delivered every month thereafter.

The entire fleet of 48 trains, he added, would be delivered in December 2016.

The DOTC said a total of 11 projects worth close to P10 billion are being undertaken to improve the operations and decongest the MRT-3 that caters to about 550,000 passengers per day, way above its design capacity of 350,000 per day.

It is bidding out a three-year maintenance contract worth P2.2 billion replacing the current operator Autre Potre Technique (APT) Global to make sure that the mass transit system operates under safe running conditions and to maintain cost at a minimum level.

Meanwhile, another P1.15 billion has been earmarked for the rehabilitation of 28 aging trains of MRT-3 while the AF Consortium led by infrastructure giant Metro Pacific Investments Corp. (MPIC) and conglomerate Ayala Corp. is spending P1.09 billion to establish the automated fare collection system (AFCS) to be fully operational by September next year.

Building a subway will solve congestion at MRT3, says Japanese expert

InterAksyon, 17 September 2014

Darwin G. Amojelar

 

MANILA – A subway can do more to decongest the MRT3 than an expansion of the existing train system’s capacity, according to a Japanese transport expert.

“MRT3 is a small capacity from the very beginning compared to the demand. So, it was the wrong choice. You can only expand the capacity by 20 percent and that is why we’ve proposed a subway, north-south subway along EDSA,” Shizuo Iwata, project manager of Japan International Cooperation Agency (JICA), today told reporters on the sidelines of a forum organized by the Asian Development Bank (ADB).

Iwata said a subway along EDSA would cost about $700 million and “it is not expensive for the Philippine economy, if the current economic growth continues.”

The Philippine economy last year grew by 7.2 percent and expects to grow at least 8 percent in the coming years.

Construction of a subway would take between 3-5 years from the time that the government awards the contract, Iwata said.

The Department of Transportation and Communications (DOTC) has commissioned JICA to undertake a study on how to improve the Philippines’ transport system, including the establishment of the country’s first subway system.

“It’s very unfortunate [that] people have to wait for long. The waiting time is much longer than traveling time,” Iwata said.

DOTC is procuring 48 new train cars at a cost of P3.8 billion to decongest passenger traffic at MRT3. The Philippines earlier awarded to China’s Dalian Locomotive the contract to procure the additional train cars.

DOTC expects to test the prototype car in August next year. Delivery of the initial 3-4 light rail vehicles (LRVs) would start September next year and would be completed by end-2016.

The additional trains would boost capacity by 66 percent and improve headway to 2.5 minutes.

The acquisition of new train cars is one of the measures the government is pursuing to decongest MRT3. Other measures include repair of the existing LRVs, upgrade of ancillary systems, signaling and computer software and maintenance.

Costing P9.7 billion, the Aquino administration’s three-year plan for MRT3 comes several weeks after theworst accident involving the train system. While DOTC blamed its personnel for the accident, the agency has fined the maintenance provider for the intermittent glitches in the service.

Running from North Avenue in Quezon City to Taft Avenue in Pasay City, MRT3 is operating at nearly 500,000 passengers per day, or way beyond its rated capacity of 350,000. Capacity expansion has eluded the MRT3 amid disputes between the government, which operates the service, and Metro Rail Transit Corp (MRTC), which owns the system under a build-lease transfer (BLT) agreement signed in 1996.

At present, the rail system has a fleet of 73 Czech-made air-conditioned rail cars, of which up to 60 three-car trains operate daily. The trains run at a maximum speed of 65 kilometers per hour to cover the rail system’s 13 stations in about 30 minutes, including short dwell times of about 25 to 35 seconds in each station.