HOPEFUL. This was our state of mind when we welcomed 2014. After successfully closing a challenging year, the Center’s optimism was on high gear propelled by a robust pipeline of projects. Our aspiration was to translate these to more investment opportunities. Our aspiration was to contribute in realizing the country’s infrastructure agenda and make a difference. We started 2014 with five awarded projects under our belt and six others ready for rollout; two were supposed to be awarded at the beginning of the year. The bases were loaded and we were eager for a home run. Then the curve balls came. It was a challenge that we faced head on. Optimism turned to determination, then persistence, and then endurance. In some cases, we had to do a full stop and start all over again.
We welcomed these challenges. They tested our processes. It was a testament to the nimbleness of the Center and the rest of government as we immediately worked to create policies that plugged the loopholes in our PPP framework. The reaction of the private sector to these adjustments was encouraging. Investors continue to look to the PPP program with much enthusiasm, despite the challenges and the setbacks. Their participation was resounding and categorical. It never diminished or wavered.
On the other side, our partnership with our Implementing Agencies (IAs) reached a level of maturity and confidence that was both reassuring and supportive. In the three years that we have been working with our IAs, it was as if we have perfected our dance of collaboration – with both partners more attuned on addressing the requirements and complexities of building well-structured PPP projects.
Thus, as we ended 2014, we successfully awarded three multibillion dollar PPP projects collectively worth USD 84.14 billion. The Department of Transportation and Communications (DOTC) awarded their first PPP project — the USD 1.7 Billion Automated Fare Collection System and was followed immediately by the USD 17.52 billion Mactan-Cebu International Airport Passenger Terminal Building, our very first PPP airport project. The biggest PPP project then, the USD 64.9 billion LRT Line 1 Extension, Operation and Maintenance was also awarded by the DOTC. By the end of 2014, our pipeline had reached 61 projects in various stages of the project cycle, totaling some USD 26.9 billion.
There were also three PPP projects approved by the Investment Coordination Committee – Cabinet Committee. These are the Cavite-Laguna Expressway (CALAX) Project, NLEX-SLEX Connector Road Project and Tanauan City Public Market Redevelopment Project. We worked equally hard to further support our IAs by ramping up our initiatives to build our pipeline of PPP projects and sustain its attractiveness to investors.
The PDMF ended the year with eight (8) new projects where it provided project preparation and transaction support amounting to approximately USD 20 M. Reimbursement from winning bidders amounted to USD 5.8 M for the four (4) awarded PDMF-supported projects. We also established a new panel of consulting firms consisting of 22 consortia of firms.
Our capacity-building program had a wider reach 2014. We capacitated 93 Local Government Units, 63 Government Owned and Controlled Corporations, 81 National Government Agencies, and 8 Academic Institutions. Our regular knowledge sharing sessions also gave our internal staff and that of the IAs a new perspective in approaching PPPs and its methodologies. Our twinning program with New South Wales has been instrumental in concretizing our bid to put in a Probity Advisory as part of our process. We also worked with them in our continuing efforts to strengthen our policy, legal, institutional, and regulatory framework.
Our hard work caught the eye of the PPP global community. The PPP Center won the Gold Award as Best Central Government Promoter at the 2014 Partnerships Awards by the UK-based Partnerships Bulletin. This recognition helped boost our stature with international investors as well as PPP industry experts and other countries carrying out their own PPP programs.
We are in the process of setting up a PPP knowledge management (KM) portal that will improve the information exchange between the public and government with respect to our PPP projects. Part of the infrastructure technology (IT) modules that make up the KM Portal is a Virtual Data Room (VDR) that the PPP Center itself developed to be used free of charge by IAs. The PPP Governing Board approved the use of the VDR as a best practice in bolstering transparency in the mplementation of PPP projects. We hope to institutionalize the use of the VDR for all PDMF-supported PPP projects as it has embedded in its system an IT audit trail of each transaction. This will further improve our processes and transparency as we deal with bidders.
As we enter 2015, we are simultaneously bidding out 11 projects worth USD 6.22 Billion. This is a precedent in the history of the country’s PPP program. We also hope to pass the PPP Act, which will institutionalize all the reforms that we initiated; strengthen the program and standardize the processes and mechanisms that we are doing right now.
Given all the challenges that crossed our paths, we are going into the New Year with our eyes wide open and wiser than before. We will hope for the best and prepare for the worst. More importantly, the lessons on perseverance that we have learned will help us through the roughest times.
People ask us — what is in store for the PPP program in 2015? This is our agenda — to continue building up the pipeline and get the projects tendered.
Cosette V. Canilao
Executive Director, PPP Center
