Business Mirror, 15 July 2013
By Cai U. Ordinario
THE Department of Agriculture (DA) has decided to spin off the hydropower and domestic water-supply components of the Jalaur River Multipurpose Project Stage 2 (JRMP 2) into a public private partnership (PPP) scheme.
In a phone interview with the BusinessMirror, DA Project Development Service Director Zenaida M. Villegas added the agency may seek funding from the PPP Center to conduct the feasibility study for the project.
Villegas said the two components will be connected to the dam that will be built in the original P11.21 billion-worth project that will be financed by the Export-Import Bank of Korea-Economic Development Cooperation Fund (EDCF).
“As soon as we complete the detailed engineering for the dam, we will start packaging the hydropower and domestic water-supply components as a PPP,” Villegas said.
She added that the feasibility study for the hydropower and domestic water-supply components can be funded by the Project Development and Monitoring Facility (PDMF).
The PDMF is the revolving government and multilateral agency financed fund for pre-feasibility studies and consultant procurement for PPP projects. It is funded by an $18-million grant from AusAID through the Asian Development Bank, and $23-million funding from the national government’s budget.
Villegas said other options for financing the feasibility study of the government for the project is a technical assistance to be extended by South Korea’s EDCF.
The JRMP2 was signed in August 2012 and the loan became effective in November 2012. As of March 2013, data from the National Economic and Development Authority (Neda) showed the physical accomplishment of the project is 0.03 percent.
The total loan extended by EDCF for the project amounted to P8.95 billion, while the government counterpart is P2.26 billion. The project will be implemented by the National Irrigation Administration and is targeted for completion in 2016.
Documents showed that the project aims to provide year-round irrigation water supply to 22,340 hectares from the improved five existing River Irrigation Systems (RIS) and 9,500 rain-fed areas.
The total target irrigation service area is 31,840 hectares. This covers 7,000 hectares of farmland devoted to palay and 2,500 hectares for sugarcane.
Apart from Jalaur, there are two other agriculture-related PPPs. These two projects, however, have yet to secure approval for the final PPP structure.
Agriculture Secretary Proceso J. Alcala has not approved the P400-million Grains Central Project and the P693.4-million Establishment of Cold Chain Systems Covering Strategic Areas in the Philippines Project. The projects are included in the list of more than 20 PPP projects in the pipeline.
PPP Center Executive Director Cosette Canilao said Alcala’s approval of the project is a requirement before the projects are submitted for Investment Coordination Committee evaluation and, eventually, Neda board approval.
Canilao previously said the actual construction of PPPs takes at least 18 months to begin. She said feasibility studies take the most time and account for around four to five months, as well as due diligence that is conducted between five to six months.
Without Alcala’s approval, the PPP Center could not give an assurance that the two projects can be rolled out this year, according to Canilao.
Under the PPP Center’s definition, “project rollout” means the invitation to bid for a project has been published in a paid ad by the government.
