Posts Tagged ‘PPP’

$11.6-B PPP Projects To Roll Out In Philippines By 2015

Infrabuddy.com, 14 October 2014

 
Almost 16 public-private partnership PPP deals amounting to $11.6 billion to roll out in 2015,

Bidding process for $2.54 billion worth contracts of operations and maintenance of some of Bohol, Laguindingan, Puerto Princesa, Davao, Bacolod and Iloilo airport projects would commence next year. This will also include construction and rehabilitation of the current aviation hubs as well.

One of the biggest project among these 16 projects is $180 million San Fernando Airport project, which includes the construction of an airport terminal with a mall complex in Barangay Poro, San Fernando City.

The construction and the modernization of the Davao Sasa port, (an international-standard container port with modrn facilities) project worth $388 million is under transport agency is also about to take off and will ultimately benefit the import and export industry of the country, more specifically the island of Mindanao.

The projects like $428.89-million Motor Vehicle Inspection System; the $3.70-billion North-South Railway Project-South Line; the $3-billion Mass Transit System Loop; the Manila Bay-Pasig River-Laguna Lake Ferry System; and the Light Rail Transit Line 1 Dasmariñas Extension. Are under the secretary of Transportation.

Other PPP deals P1.12-billion Regional Prison Facilities; the $416-million Metropolitan the New Centennial Water Supply Project, the Batangas-Manila (BatMan) Natural Gas Pipeline Project (approximately 110-kilometers natural-gas transmission and distribution).

The government has awarded eight PPP contracts since the flagship infrastructure program was launched in late 2010 and 15 more contracts are to be awarded till 2016.
 

Japan investors urged to fill gap in PH infra funding

Philippine Inquirer, 11 October 2014
By Ben O. de Vera
 
Philippine economic managers have urged Japanese investors to pour money into the country’s infrastructure in order to sustain the growing economy.

“The [Philippine] government is working to step up investments in infrastructure to be at par with other competing economies and to meet the country’s future growth requirements,” Socioeconomic Planning Secretary Arsenio M. Balisacan said during the Philippine Economic Briefing in Tokyo on Wednesday.

The Aquino administration aims to jack up infrastructure spending to at least 5 percent of the gross domestic product (GDP) by 2016, from a mere 2.2-percent share in 2012.

In a statement Friday, the Investor Relations Office reported that Philippine officials encouraged the more than 400 Japanese businessmen and government representatives at the Tokyo road show to look into the opportunities being presented by the public-private partnership (PPP) infrastructure projects to be rolled out within a year’s time, on top of prospects in the capital markets, tourism and power sectors.

The PPP projects are worth $12.28 billion.

To improve the country’s infrastructure, 16 PPP projects will be rolled out in the next 12 months. The projects include the operation and maintenance of the airports in Bacolod (worth $450.2 million), Davao ($901.6 million), Iloilo ($675.6 million), Panglao in Bohol ($52 million), Puerto Princesa City ($116.2 million), and Laguindingan ($353.8 million), according to PPP Center Executive Director Cosette V. Canilao.

The Japanese investors were also urged to study the $3.927-billion south line of the North-South Commuter Railway, the $3-billion Mass Transit System Loop, the $1.115-billion Regional Prison Facilities, the $464-million San Fernando Airport, the $428.9-million Motor Vehicle Inspection System, the $416-million New Centennial Water Supply Source project, the $377.8-million Davao Sasa Port, as well as the Batangas-Manila Natural Gas Pipeline, the Light Rail Transit Line 1 Dasmariñas Extension and the Manila Bay-Pasig River-Laguna Lake Ferry System projects.

About 17 percent of the country’s 32,000-kilometer national road network also remains unpaved. This is where Japanese firms may partner with the Philippine government in the areas of construction, consultancy as well as technical support services, Public Works and Highways Secretary Rogelio L. Singson noted.

Philippine economic managers pitch PPP projects in Tokyo roadshow

InterAksyon, 10 October 2014
By Darwin G. Amojelar
 
MANILA – Philippine economic managers have offered to Japanese investors a string of public-private partnership (PPP) projects that the Aquino administration will roll out next year.

“There are 16 projects that we are planning to roll out by next year,” said PPP Center executive director Cosette V. Canilao, who has joined a Philippine delegation in a roadshow in Japan.

One of the 16 projects is the Metropolitan Waterworks and Sewerage System’s (MWSS) P18.72 billion New Centennial Water Supply Project.

A Japanese conglomerate, Marubeni Corp, is already participating in the Philippine water sector, after taking a stake in Maynilad Water Services Inc, the private concessionaire for the east zone of MWSS.

“The New Centennial Water Supply Project will ensure water security for the residents of Metro Manila,” Canilao said.

MWSS has begun soliciting bids for the project, the deadline for which falls on November 17.

Also offered to the Japanese business community are the operations and maintenance (O&M) contracts of several airports in Bohol, Laguindingan, Puerto Princesa, Davao, Bacolod and Iloilo.

“These airport projects have an estimated cost of around $2,549.33 million in total and they are also included in our list of possible investment opportunities”, Canilao said.

The Philippine delegation also pitched the San Fernando Airport Project, which involves construction of an airport terminal with a mall complex in Barangay Poro, San Fernando City in La Union. The project has a $180 million budget.

The $388-million construction and modernization of the Davao Sasa port is also one of the PPP projects that was showcased in the forum.

“This project will ultimately benefit the import and export industry of the country, specifically the island of Mindanao through transforming its facilities into a modern, international-standard container port”, Canilao said.

Other PPP projects that were presented in Tokyo are as follows:

$1.115.11-billion Regional Prison Facilities project;
$428.89-million Motor Vehicle Inspection System;
$3.702 billion North-South Railway Project-South Line;
$3-billion Mass Transit System Loop;
Manila Bay-Pasig River – Laguna Lake Ferry System; and
LRT1 Dasmarinas Extension, which will extend the train service by approximately 15 kilometers.

Canilao said the government also is pursuing the Batangas-Manila (BatMan) Natural Gas Pipeline project, which involves construction of an approximately 110-kilometer natural gas transmission and distribution pipeline from the province of Batangas to transport and supply natural gas to Batangas, Laguna, Cavite and Metro Manila.

“The government assured the Japanese companies that significant reforms in the implementation of the country’s PPP program have already been put in place. And the Philippines has been consistent in rolling out PPP projects through transparent, credible and accountable processes,” Canilao said.
 

Economic team dangles $12.28-billion projects in Tokyo road show

Business Mirror, 10 October 2014
By David Cagahastian
 
The government’s economic officials invited Japanese businessmen to invest in over $12.28 billion worth of public-private partnership (PPP) infrastructure projects to be rolled out within the next 12 months.

In the economic road show hosted by the Philippines in Tokyo on Wednesday, the government invited Japanese fund managers and investors to tap the Philippines’s comparative advantages as an investment destination.

“The Philippines is looking north to Japan, and hopes that Japan will look south to the Philippines,” Finance Secretary Cesar V. Purisima said in his statement to open the road show at the Shangri-La Hotel in Tokyo.

“The Japanese and Filipino economies are heavily complementary. Japan has an abundance of investible capital and manufacturing prowess, while the Philippines has a young and talented labor force,” he said.

Aside from the Philippines’s work force, Purisima said the country’s large population provides a huge market for Japanese investments. He said the strategic geographical location of the Philippines and its role in the Asean Economic Community also makes the Philippines an attractive investment destination.

Socioeconomic Planning Secretary Arsenio M. Balisacan said investing in the Philippines would be a prudent move because of its favorable economic prospects. The National Economic and Development Authority expects gross domestic product to grow by at least 6.5 percent this year, between 7 percent and 8 percent next year, and between 7.5 and 8.5 percent in 2016.

PPP Center Executive Director Cosette Canilao said the $12.28 billion worth of PPP deals consist of 13 infrastructure projects to be rolled out within the year. There would be three more PPP projects to be rolled out within the short term, but the costs of these deals have yet to be determined.

The PPP projects are the following: New Centennial Water Supply Source ($416 million); Enhanced Operation and Maintenance of Panglao Airport in Bohol ($52 million); O&M of Laguindingan Airport ($353.8 million); O&M of Puerto Princesa Airport ($116.2 million); O&M of Davao Airport ($901.6 million); O&M of Bacolod Airport ($450.2 million); O&M of Iloilo Airport ($675.6 million); Davao Sasa Port ($377.8 million); Regional Prison Facilities ($1.115 billion); Motor Vehicle Inspection System ($428.9 million); North-South Railway Project-South Line ($3.927 billion); Mass Transit System Loop ($3 billion); San Fernando Airport ($464 million). Energy Undersecretary Raul Aguilos also presented investment opportunities in the Philippines’s indigenous energy resources, such as hydroelectric and natural oil and gas development.

He said the Department of Energy aims to nearly triple the country’s installed renewable-energy capacity from the current 5,438 MW to 15,304.30 MW by 2030.

On oil and natural gas, he said there are 16 sedimentary basins all over the Philippines with combined potential of 4,777 million barrels of fuel oil equivalent of oil and gas reserves. Moreover, he said, there are 13 coal basins in the country with a total resource potential of 2.4 billion metric tons.

Tourism Secretary Ramon R. Jimenez Jr. also promoted the tourism industry, saying the increasing tourist arrivals in the country will result in a room gap in hotels by about 50,000 by 2016.

On the regulation side of business, Internal Revenue Deputy Commissioner Nelson Aspe and Securities and Exchange Commission Chairman Teresita Herbosa talked about tax-related matters and securities registration in the Philippines, respectively, to assure the government’s support to make it easier for foreigners to invest in the Philippines.

BSP Assistant Governor Johnny Noe E. Ravalo presented the favorable inflation and banking-sector outlook for the Philippines for the medium term. He cited growing resources of the Philippine banking sector that will help fund the economy’s investment requirements.

The law liberalizing entry of foreign banks, which was passed earlier this year, is expected to further boost the ability of the country’s banking sector to service the growing credit requirements as economic activities rise. Purisima said more foreign banks in the country should also bode well for attracting foreign direct investments because they can serve as good channels of information about the Philippine economy.

The latest road show was organized with assistance from Japanese banks, including Bank of Tokyo Mitsubishi, Daiwa Securities Group Inc., Mitsubishi UFJ Morgan Securities Co. Ltd., Mizuho Bank Ltd., Mizuho Securities, Nomura Holdings Inc., SMBC Nikko Securities Inc. and Sumitomo Mitsui Banking Corp.

The following Japanese government agencies, likewise, helped organize the event: Ministry of Finance, Japan Bank for International Cooperation, Japan International Cooperation Agency and Japan External Trade Organization.
 

PPP pitched to Japanese investors

The Philippine Star, 10 October 2014

By Ted P. Torres

 
MANILA, Philippines – Socioeconomic Planning Secretary and National Economic and Development Authority (NEDA) director general Arsenio M. Balisacan is pitching Philippine infrastructure and power projects, particularly those under Public-Private Partnership (PPP) program, to investors in Japan.

In an economic briefing on Philippine infrastructure and investment plans in Tokyo, Balisacan told Japanese investors that there are hundreds of infrastructure-related projects worth billions of dollars in need of private investors.

For 2013-2016, the priority programs and projects for the infrastructure sector consist of 952 projects with total investment requirements amounting to about $46.69 billion, including capital infrastructure projects, both ongoing and proposed.

“Investment requirements for infrastructure development remain huge despite increased public infrastructure spending. Therefore, this will be supplemented by private sector investments through PPPs,” said Balisacan.

He told Japanese investors that the Philippine government is reviewing and outlining policies and legal framework involving private sector participation to make it easier to start and maintain business.

These include the build-operate-transfer (BOT) law and the joint venture (JV) guidelines. Likewise, reforms in the energy sector, particularly the approval of the feed-in-tariff (FiT) rates, also aim to increase private sector participation by encouraging investments in renewable energy (RE) projects.

The Updated Philippine Development Plan identified six key sectors that generate high quality employment for Filipinos and huge private sector investment. These are manufacturing, agribusiness, tourism, information technology-business process management, logistics, and construction.

Balisacan also told investors that the Philippine government targets gross domestic product (GDP) to grow 6.5 to 7.5 percent in 2014. It grew 7.2 percent in 2013.

For 2015, the growth rate is targeted at seven to eight percent, and 7.5 to 8.5 percent in 2016.

The industry sector is projected to grow the fastest, while the services sector is expected to remain robust during the period.

“Given all these, the government is working to step up investments in infrastructure to be at par with other competing economies and to meet the country’s future growth requirements,” the chief economic planner said.

 

Gov’t pitches P550-B PPP projects to Japanese investors

ABS-CBN News, 10 October 2014
 

MANILA – The Philippine government showcased infrastructure projects with an estimated worth of P550 billion ($12.28 billion) to Japanese investors in Tokyo.

Thirteen infrastructure projects are being targeted by government to be rolled out in the next 12 months under the public-private partnership (PPP) program.

These projects include the New Centennial Water Supply Source ($416 million); Enhanced Operation & Maintenance (O&M) of Panglao Airport in Bohol ($52 million); O&M of Laguindingan Airport ($353.8 million); O&M of Puerto Princesa Airport ($116.2 million); O&M of Davao Airport ($901.6 million); O&M of Bacolod Airport ($450.2 million); O&M of Ilo-Ilo Airport ($675.6 million);

Davao Sasa Port ($377.8 million); Regional Prison Facilities ($1.115 billion); Motor Vehicle Inspection System ($428.9 million); North-South Railway Project – South Line ($3.927 billion); Mass Transit System Loop ($3 billion); San Fernando Airport ($464 million);

Three more PPP projects–Manila Bay-Pasig River-Laguna Lake Ferry System; Batangas-Manila Natural Gas Pipeline; and LRT Line 1 Dasmariñas Extension–are also expected to be rolled out within the short term.

“The Philippines is looking north to Japan, and hopes that Japan will look south to the Philippines,” Finance Sec. Cesar Purisima said in a statement.

“The Japanese and Filipino economies are heavily complementary; Japan has an abundance of investible capital and manufacturing prowess while the Philippines has a young and talented labor force,” he added.

The government also presented to Japanese investors energy-exploration opportunities, income potentials in tourism, and financial instruments offered by the Philippine Stock Exchange.

The roadshow, which was held at the Shangri-La Hotel in Tokyo, was attended by over 400 Japanese fund managers, investors, and government representatives.

The Philippine delegation was composed of top economic officials, including Purisima, Socioeconomic Planning Secretary Arsenio Balisacan, PPP Center Executive Director Cosette Canilao, Public Works and Highways Secretary Rogelio Singson, Tourism Secretary Ramon Jimenez Jr., BSP Assistant Governor Johnny Noe Ravalo, and Energy Undersecretary Raul Aguilos.
 

Govt to tap private sector in P29.14-B Clex project

Business Mirror, 05 October 2014

THE government is partnering with the private sector in pursuing the P29.14-billion Central Luzon Expressway (Clex), which will facilitate the movement of goods and services in Central Luzon, a document from the Department of Public Works and Highways (DPWH) showed.

The first phase of the proposed Clex will involve the construction of a thoroughfare that will connect Tarlac and Cabanatuan in Nueva Ecija. The state has earmarked P14.94 billion for this phase.

“It will be funded through a loan, an official development assistance fund. The road will connect the Subic-Clark-Tarlac and the Tarlac-Pangasinan-La Union Expressways to Cabanatuan City,” Public Works Undersecretary
Rafael C. Yabut said, when asked for comment.

The first phase will be funded by a loan from the Japan International Cooperation Authority. The contract for the additional 30 kilometers of road, which will be auctioned off by the end of the year, is expected to be completed by 2018.

“By mid-2015 we will start the construction of the first phase,” Yabut noted, adding that the deal has been approved by the National Economic and Development  Authority (Neda) Board, which is chaired by President Aquino.

The second phase of the thoroughfare, meanwhile, involves the construction of another expressway that will interconnect Cabanatuan to San Jose City. It carries a P14.20-billion price tag.

Yabut explained that the second phase will be added to the pipeline of public-private partnership (PPP) projects under his agency.

“Phase II will also involve the operations and maintenance contract for the expressway. It will be auctioned off under the PPP program of the Aquino government,” the state official added.

The second phase of the proposed expressway is still being studied for feasibility. The 35.7-km road is expected to be auctioned off by the first half of next year.

The proposed Clex is part of the 386.18 km of road that the DPWH aims to construct, 170.79 km of which are currently being built.

The public works department has a number of key infrastructure deals that aim to improve the road network around the Philippines. It has so far awarded two PPP projects: the P1.96-billion Daang Hari-South Luzon Expressway bagged by Ayala Corp. in 2011; and the P15.68-billion Ninoy Aquino International Airport expressway, given to San Miguel Corp. (SMC) unit Vertex Tollways Development Inc. in 2013.

The awarding of the P35.2-billion Cavite-Laguna Expressway, meanwhile, is being stalled by a petition of a disqualified bidder before Malacañang. Team Orion of the Ayala Corp. and Aboitiz Equity Ventures Inc. has seen three months of delay in the awarding due to the motion for reconsideration of SMC.

The agency is also auctioning off the P122.81-billion Laguna Lakeshore Expressway-Dike deal, which has attracted 22 companies, to head to the prequalification stage of the bidding. The deadline for the submission of bids is scheduled on July 6 next year. A notice of award is targeted to be issued a month after.

Public Works Secretary Rogelio L. Singson said his office aims to increase infrastructure spending by 2016. He explained the government has set its sights on spending 5 percent of the country’s gross domestic product, totaling to as high as $18 billion by 2016, from $4 billion in 2011.

“We commit that by 2016, all national roads and bridges, estimated to measure 32,000 km, will have been paved,” he said.

Forum on PPP Expressway Dike Tests Investors’ Interest

PRESS RELEASE
03 October 2014

Quezon City – More than 60 companies expressed keen interest to participate in the country’s biggest PPP project during the Investors Forum for the Laguna Lakeshore Expressway Dike (LLED) project. The PhP 122.8 Billion high standard highway cum dike drew 22 companies who bought the Pre-qualification documents and are now in the process of completing its submissions.

Speaking before the interested investors, Secretary Rogelio Singson of the Department of Public Works and Highways emphasized what it would take to make a successful bid for the LLED.

“The consortium should have experience and expertise in building dams, reclamation, property development, and running toll roads and expressways,” he said.

He also added that bidders should be able to use new technologies that will make the job easier, particularly in the aspect of dredging.

Laguna Lake Development Authority (LLDA) Secretary Nereus Acosta welcomed the construction of the LLED stating that the project will help mitigate the effects of climate change which severely affects the coastal towns along the Laguna Lake.

“The Philippines is very vulnerable to climate change. There should be flood mitigation measures in place, especially in the flood prone areas along the lake”, he said.

“There are 65 LGUs under the jurisdiction of the LLDA and all of these will benefit from the project,” Acosta added.

The LLED will help mitigate flooding along the western coast of the Laguna Lake running from Taguig to the town of Bay, in Laguna. It will also serve as an alternative transport route to the congested South Luzon Expressway and enhance the hydrology for the ecosystem of Laguna Lake.

PPP Center Executive Director Cosette V. Canilao aired her appreciation for the significant interest that local and foreign companies have shown to participate in the bidding process for the LLED and vowed that it will be a smooth one.

“Following the issuance of the Invitation to Prequalify to Bid and the Information Memo, we hope to successfully tender the project and get the best deal for both the public and private sector alike”, Canilao said.

“This is the true essence of robust PPPs after all – reasonable returns for the private sector, while ensuring the delivery of effective and high-quality infrastructure projects for the public,” she added.

“As we have done in the past, we assure all of you here today that we are working to make the bidding process as smooth as possible and look forward to seeing the day when this project comes into fruition, “the PPP Center chief said.
During the question and answer portion of the forum, Secretary Singson asked prospective bidders if there was a need to extend the period to submit their pre-qualification documents. There was a unanimous clamor from the private sector to extend its date to 90 days to allow them to produce a responsive submission. The DPWH Chief said that they are seriously considering the suggestion.

“We will seriously consider it, as long as it does not affect the submission date for the bids set for July 2015”, he said.

The 22 companies who bought the prequalification documents include the following companies:

1. Muhibbah Engineering (Phil) Corporation (Malaysia/Philippines),
2. GT Capital Holdings, Incorporated (Philippines)
3. Ayala Land (Philippines)
4. Egis Projects S.A. (France)
5. Megaworld (Philippines)
6. Metro Pacific Tollways Corporation (Philippines)
7. Minerales Industrias Corporation (Philippines)
8. Leighton Contractors (Philippines) Inc.
9. JV Power and Wealth Corporation
10. LT Group (Philippines)
11. Laguna Lakeshore Consortium (Philippines)
12. Filinvest Land (Philippines)
13. Macquarie Securities (Phil.) Inc. (Australia)
14. San Miguel Corporation (Philippines)
15. Megawide Construction Corporation (Philippines)
16. Aboitiz Equity Ventures, Inc. (Philippines)
17. JG Summit Holdings, Inc. (Philippines)
18. PT Star Line (Indonesia/Philippines)
19. State Properties Corporation (Philippines)
20. MTD-Hanshin-VistaLand Consortium (Malaysia/Philippines)
21. IL/FS Transportation Networks Ltd. (India)
22. Vinci Concessions (Malaysia)

 

 

PH Showcases PPP Projects in SG Seminar-Roadshow

PRESS RELEASE
03 October 2014

The Philippines promoted its Public-Private Partnership (PPP) projects at the recently concluded Philippine Infrastructure and PPP An Opportunities Seminar-Roadshow in Singapore. The event was co-organized by the UK Trade and Investment (Manila and Singapore) and the Philippine British Business Council (PBBC) last September 29.

PPP Center Executive Director Cosette V. Canilao presented to foreign investors at the British High Commission, Singapore the pipeline of more than fifty (50) PPP projects with an estimated cost of US $20.82 Billion.

Philippine government officials including the Department of Trade and Industry Undersecretary Ponciano Manalo Jr., Department of Public Works and Highways Secretary Rogelio Singson, Department of Transportation and Communications (DOTC) Undersecretary Rene Limcaoco, and officials from Philippine embassy in Singapore with representatives from the private sectors were also present in the roadshow.

The business seminar concentrated on high value opportunities under the PPP program and other infrastructure projects that include roads, railways, airports, water and healthcare.

Currently, the PPP projects that under procurement are Bulacan Bulk Water Supply Project, Integrated Transport System Project – South and Southwest Terminals, Laguna Lakeshore Expressway Dike Project and Operation and Maintenance of LRT Line 2. These projects have an estimated total cost of Php 154.2 billion or US $3.43 billion.

The government has already awarded eight (8) PPP projects in various infrastructure and development sectors. The LRT Line 1 Cavite Extension and Operation and Maintenance is the latest project that was awarded by the government to the winning bidder, Light Rail Manila Consortium, last September 12. Contract signing was held yesterday at EDSA Shangrila.

Why same firms are vying for PH infra projects

Rappler, 01 October 2014

By Lala Rimando

 

It’s a testament to how much these Philippine firms have grown and matured. They’re now looking for yield and more portfolio expansion opportunities.

MANILA, Philippines – Metro Pacific. Ayala. San Miguel. Megawide. Fil-Invest. DMCI. Lopez and Ty groups. These business groups associated with the Philippines’ richest families are a staple whenever road, rail, airport and other infrastructure projects are up for privatization via the public-private partnership (PPP) scheme.

It’s a testament to how much they have grown and matured. They’re now looking for yield and more portfolio expansion opportunities. It used to be that the Philippine “playground” required the deep pockets and technological muscle of foreigners, especially when it came to multibillion-dollar projects, like infrastructure and power. Some were burned and spurned.

The situation today indicates that these Filipino families have the stomach for the projects’ risks. With how things are going in the roll out of PPP projects under the Aquino government, we’ll likely see more of the same. (READ: Gov’t raises infrastructure spending)

“Money is not an issue” in big-ticket projects in the Philippines, Suraj Moraje, who manages McKinsey’s Manila office, told the audience at the Philippine Economic Briefing on Tuesday, September 30.

“Local institutions have very good balance sheets,” and therefore, can afford to finance infrastructure projects, which are inherently risky but potentially profitable. Moraje noted: “The international community has not even started getting involved.” It’s a hint that we are missing out on mega-billion long-term foreign funds that have made their way into emerging markets, including those in Asia. These are the same funds generally touted as a “vote of confidence,” thus state officials actively pursue them.

Sun Life Asia Investments managing director Michael Manuel echoed the same sentiment. “At this time when interest rates are very low, we are looking at higher yields. PPP in infrastructure and power is a natural choice for us. We [are willing] to trade liquidity for more yield.” Infrastructure projects under the PPP scheme involve long term commitment since funds and other resources are tied in it for years, even decades.

Manuel cited one of the Philippines’ golden tickets: an investment grade from the credit rating agencies. “The opportunities in the Philippines are something we’re looking at. The investment grade [rating of the country] means we have to include the Philippines in our [PPP investment] portfolio.”

Time running out

That locals’ pockets are deep and foreign investors are waiting in the wings are a recurring refrain.

We’ve heard this in other previous economic briefings, as well as other gatherings here and abroad. A handful of toll road, rail and airport projects planned and promised by the current officials way back in 2010 have made it through the PPP contracting mill, but a long list of crucial assets meant to ensure that the Philippine economy sustains its attractive growth rate have yet to get off the ground.

With just months to go before the Aquino administration turns over the reins of the government to its successor, Socioeconomic Planning Secretary Arsenio Balisacan said there are still about 950 infrastructure projects in the pipeline.

While more taxpayers’ money will be spent on infrastructure — from 2.2% of GDP in 2012 to at least 5% by 2016 — “the private sector is expected to participate” in these projects worth about US$46.7 billion, Balisacan told the audience at the Philippine International Convention Center.

Time is running out, admitted Cabinet Secretary Rene Almendras, who stressed: “It’s now all about execution. We’re passed the planning stage. All agencies have roadmap to 2016.”

Yet, the gap between these must-do’s and what-is-happening remains wide. The Aquino government has previously explained they wanted to rid the system of corruption and wrongdoing, resulting in the delays in packaging and bidding of projects.

There are reasons beyond their control, including the Constitution’s foreign ownership limit at only 40%. Investors committing billions-worth of resources at such lengthy period would naturally want more control over or influence in the project. This limitation was brought up again by investors during the Filipino officials’ recent trip and meetings in Europe, according to Transportation Secretary Emilio “Jun” Abaya. “Clearly, it is an issue we need to address if we want more investments in infrastructure,” he said, though also noting difficulties in changing the Charter now that 2016 is near.

Public Works Secretary Rogelio Singson also talked about right-of-way issues, which delay road and other projects. Government takes on the responsibility of buying the proposed site and relocating and compensating the affected residents, before passing it to the private firm. He’s up against the legislative mill, which also needs time, an elusive luxury. “We have been pushing for the changing of the provisions on the BOT (Build-Operate-Transfer) Law to make it easier to have right-of-way.”

Risky and costly

There are, however, bottlenecks and issues that are of the government’s own doing.

A classic case is how the economic managers handled the much-needed tollroad meant to connect the main north and south Luzon expressways (NLEx and SLEx), and designed to ease road congestion leading into and out of the crucial Manila port.

The P18-billion toll road was further delayed for another year after the justice department ruled that the public works and transportation agency officials’ decision on how to move the project forward was illegal. Wanting to expedite the process, the team of Transportation Secretary Abaya pushed for a joint venture deal between local infrastructure giant Metro Pacific Investment Corporation (MPIC) and the state-run Philippine National Construction Corp. (PNCC), a move that the National Economic and Development Authority (NEDA) Board, led by President Benigno Aquino III, endorsed.

Justice Secretary Leila de Lima said Singson’s public works department should just proceed with the project’s original design and conduct a Swiss challenge to the unsolicited proposal of MPIC, instead of evading it via a joint venture scheme. Under the process, MPIC would have the right to match the highest bid, an option Aquino was not comfortable with. This NLEx-SLEx connector project was originally submitted to the DPWH in May 2010, and would have been finished by 2016.

These and other issues in the design and permitting process are what turn off foreign investors, noted Moraje of McKinsey. The risk-return profile of the Philippines remains a concern and often compared to other peer countries, like Indonesia and Malaysia, he noted, citing a World Bank study.

Another issue that keeps the Philippines’ risk profile uncompetitive is the ability of the government to be consistent with the application of laws and processes. Transportation Secretary Abaya said the Cabinet officials are fully aware of this stigma and that “consistency of policy is on the top consciousness of the economic development cluster.”

“We cannot turn a blind eye on previous contracts. In DOTC, we are in arbitration proceedings with regards to two major projects,” he said. He was referring to the cases filed by German firm Fraport against the Philippine government in a Washington court for its investments in the scandal-ridden Ninoy Aquino International Airport Terminal 3 (NAIA-3), as well as by the Filipino consortium involved in the rail project, MRT-3. The latter’s case is ongoing in a Singapore court.

These two cases have been often cited as reasons why transportation officials are careful and deliberate — thus, slow — in processing much-needed rail and airport projects.

That puts us, the consumers and taxpayers, at the losing end. Risks are costly, and unfortunately, we’ll have to bear that burden through higher fares or fees just to have access to the infrastructure we deserve.- Rappler.com

Lala Rimando was former business editor of Rappler. She specializes in stories on political economy, boardroom dramas, infrastructure and energy issues, and corporate governance. She is currently doing strategic consulting for multilateral agencies and foreign groups keen on investing in the Philippines.