Posts Tagged ‘public-private partnership’

Government eyes PPP to implement 11 new projects

Business Mirror, 15 April 2014

By Cai U. Ordinario

 

The national government is in the process of conceptualizing 11 projects to be implemented under the public- private partnership (PPP) scheme, according to a first quarter 2014 report recently released by the PPP Center.

The list includes three projects to be undertaken by the Department of Public Works and Highways (DPWH) and two projects to be implemented by the Department of Transportation and Communications (DOTC).

Further, PPP Center documents showed that one project each will be implemented by the Philippine Statistics Authority-Santa Mesa (formerly the National Statistics Office), Freeport Area of Bataan (FAB), Bases Conversion and Development Authority and National Irrigation Administration (NIA).

The document also showed that one project will be implemented jointly by the Philippine Health Insurance Corp. (PhilHealth) and the Department of Health and another will be implemented by the DOTC and the Department of Finance.

The projects are Civil Registration System— Information Technology Project Phase II; Ferry Passenger Terminal Buidlings Development; C-6 Expressway (Southeast, East, and North Section); PhilHealth Information TBD PhilHealth/ Technology Project; Manila Heritage and Urban Renewal Project; and North Luzon Expressway (Nlex) East Expressway.

Other projects are the FAB Barging Facility/ Port Project; Busuanga Airport Development Project; Clark Green City Food Processing Terminal; NIA Irrigation Project; and the Camarines Sur Expressway Project.

Of the projects, only the Nlex East Expressway has a description. The DPWH project aims to form an important transport access in the eastern area of Region 3. This will further spur economic development in said areas.

Once completed, the Nlex East Expressway will provide travelers with an alternate route in going to and from Cabanatuan City which connects to major roads leading to Region 2 and Cordillera Administrative Region.

The Nlex East Expressway project is a four-lane, 6.8-kilometer road that will run parallel to the Maharlika Highway (Pan Philippine Highway) starting off at La Mesa Parkway and/or junction of C-6 in San Jose del Monte, Bulacan, passing through Norzagaray, Angat, San Ildefonso, San Miguel, Gapan, Santa Rosa, and ending at Cabanatuan in Nueva Ecija.

The project will be implemented in two phases and bridges will also be constructed to cross the rivers of Angat, Panaranda and Pampanga.

It will serve the growing areas of Bulacan and Nueva Ecija provinces. The project starts at Don Mariano Marcos Avenue in Quezon City, traverses almost parallel to Daang Maharlika, serving the areas of San Miguel, Gapan and Cabanatuan City.

The PPP Center was created through Executive Order 8 Series of 2010 and mandated to facilitate the implementation of the country’s PPP program and projects.

It provides technical assistance to national government agencies, government-owned and -controlled corporations, state universities and colleges, and local government agencies, as well as to the private sector to help develop and implement critical infrastructure and other development projects.

The PPP program of the Aquino administration is a primary strategy for national development aimed at accelerating infrastructure and other development services, in order to sustain national economic growth.

 

SMC revises Skyway alignment

The Philippine Star, 14 April 2014

By Lawrence Agcaoili

 

MANILA, Philippines – Diversified conglomerate San Miguel Corp. (SMC) has changed the alignment of the proposed P15.86 billion Ninoy Aquino International Airport (NAIA) expressway Phase 2 to minimize traffic congestion around the area.

Skyway O&M Corp. president Manuel Bonoan told participants of the 2014 Business Journalism Seminar organized by SMC and the Economic Journalists Association of the Philippines (EJAP) that the alignment of the proposed expressway has been diverted along Estero Tripa de Gallina to decongest traffic around the NAIA Road, Domestic Road, and Airport Road.

The NAIA Expressway starts at the existing Skyway then follows the existing road alignments over Sales Ave., Andrews Ave., Domestic Road, and NAIA Road.

Under the revised alignment, Bonoan said the proposed expressway would pass through along the Estero Tripa de Gallina instead of the congested Domestic Road.

“To avoid putting structure at Domestic Road and Airport Road,  we might be at the back of Park ‘N Fly,” he added.

Bonoan said the revision in the alignment of the proposed expressway would entail a change in the total project cost.

However, he said the revised project cost would still have to be finalized.

In July last year, the Department of Public Works and Highways (DPWH) inked a concession agreement with SMC’s Optimal Infrastructure for the proposed expressway under the Aquino administration’s public-private partnership (PPP) scheme.

It would be recalled that the P11 billion bid of the SMC unit edged the P305 million submitted by Manila North Tollways Luzon Corp. (MNTC) of publicly-held infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) in April last year.

The 7.15 kilometer four-lane NAIA Expressway project is a strategic part of the envisioned Metro Manila Urban Expressway System to be built around a network of expressways serving Metro Manila.

The project valued at P15.86 billion would provide access to NAIA Terminals 1, 2, and 3 linking the Skyway in the South Luzon expressway (SLEX) and the Manila-Cavite Toll Expressway (Cavitex).

It would also support the development of the Philippine Amusement Gaming Corp. (PAGCOR) Entertainment City located along the Manila Bay reclamation area. It will well connect all three terminals of the NAIA Complex and ease the flow of traffic to and from the airport.

The project involves the improvement of Phase 1, the construction of Phase 2, the construction of at-grade feeder roads leading to and from PAGCOR Entertainment City , and the operation and maintenance.

The first phase of the road project was completed by SMC’s Citra Metro Manila Tollways Corp. through the construction of an off-ramp that leads to the front of the NAIA Terminal 3.

Bonoan said the civil works for Phase II-A between the Entertainment City and NAIA Terminals 1 and 2 would be on full blast in either in May or June this year.

On the other hand, Phase II-B covers Domestic Road to NAIA Terminal 3 at Sales Street.

 

BCDA to bid out first phase of Clark Green City project by mid-year

InterAksyon, 14 April 2014

By Darwin G. Amojelar

 

BAGUIO, Philippines – State-owned Bases Conversion and Development Authority (BCDA) will bid out the first phase of the Clark Green City Project by the middle of this year.

During the Economic Journalists Association of the Philippines-San Miguel Corp Business Journalism Seminar held in this city, BCDA president Arnel Paciano Casanova said the first phase of the project would be “offered to the market by mid of 2014.”

The project would involve transforming the Clark Special Economic Zone into a “green city” patterned after South Korea’s New Songdo business district. At the heart of the Clark Green City is a 9,450-hectare metropolis.

The project would play a major role in decongesting Metro Manila. Under the first phase, some 1,321 hectares would be developed.

The first five years of the project would cost P59 billion, and would be undertaken through the public-private partnership (PPP) scheme.

Once completed, the Clark Green City would generate approximately P1.57 trillion per year to the economy and create 925,000 jobs, Casanova said.

He said the project would be presented to the National Economic and Development Authority (NEDA) for approval.

Earlier, BCDA signed a memorandum of understanding with Incheon Free Economic Zone Authority (IFEZA) for the transformation of Clark into a smart and green city. IFEZA operates the Songdo business district.

 

Banks ready to fund PPP projects

The Philippine Star, 14 April 2014

By Neil Jerome C. Morales

 

BAGUIO CITY , Philippines   – Philippine banks are ready and capable of funding capital-intensive public-private partnership (PPP) projects, the flagship project of the Aquino administration.

Adequate financial muscle of lenders and numerous funding options for PPP proponents will support the rollout of more big-ticket infrastructure projects until 2016, an official of the country’s largest bank said.

“Philippine banks are well-positioned and are stronger with increasing capital. Banks are ever ready to support PPPs and the private sector,” Jonathan Ravelas, chief market strategist of BDO Unibank Inc. said, during the 2014 SMC-Economic Journalists Association of the Philippines’ Journalism Seminar.

Ravelas said local banks are now capable of servicing PPP needs as they have already developed the expertise to do cash flow lending and project finance, giving PPP proponents more leeway to raise funds.

For instance, half a decade ago, tenors go as far as five years with a maximum loan of P3 billion. But so far, loans can go up to P80 billion with 15-year maturity.

In terms of options, PPP proponents can take advantage of non-recourse project finance as opposed to plain vanilla corporate loans while single-borrowing limit is already at P40 billion from the previous P1 billion, Ravelas said.

So far, the Aquino administration has awarded six PPP projects worth P45.1 billion, including the P17.5-billion Mactan-Cebu International Airport project and the P1.72-billion Automated Fare Collection System.

Thirteen more projects worth P367.9 billion are in the pipeline. Of these, nine projects worth P187 billion are seen to be awarded before 2016, Ravelas said.

Other big-ticket infrastructure projects to be auctioned off by the government include the P64.9-billion Light Rail Transit Line 1 Cavite extension, the P62.7-billion Metro Rail Transit 7 and the P24.4-billion Bulacan Bulk Water Supply Project of the Metropolitan Water and Sewerage System.

So far, Philippine banks are involved in advisory, funding and other services for PPP projects, Ravelas said. Banks do due diligence and risk assessment, allowing them to advise the government and potential bidders.

For PPP project proponents starting from scratch, Ravelas said a private placement of debt or equity will allow them to raise cash.

Companies with existing businesses can attract investors through initial public offering, follow-on offering or bonds given their track record, Ravelas said.

PPP, the flagship program of the Aquino administration that involves railroad, tollroad and airport ventures was launched in 2010 to address the country’s infrastructure backlog. It has since attracted the attention of top conglomerates like San Miguel Corp., Ayala Corp., SM Investments Corp., Metro Pacific Investments Corp. and JG Summit Holdings Inc.

However, issues like updated feasibility studies are causing delays in the bidding of PPP projects, Ravelas said, adding that companies should take advantage of the low interest rate environment.

 

Funding secured for MCIA premium

Business World, 09 April 2014

By Claire-Ann Marie C. Feliciano

 

“We have financing from local and foreign financial institutions led by BDO [Unibank, Inc.],” said Manuel Louie B. Ferrer, Megawide chief marketing officer.

The project was awarded to the consortium last Friday. Megawide and GMR offered a P14.4-billion premium, the highest among the seven bidders during the auction last November.

Mr. Ferrer said debt financing represented 70% of the premium. The balance will come from equity, of which 60% will come from Megawide and 40% from GMR.

“Payment will be within 20 days from notice of award so until April 25,” he added.

The MCIA project — the first public-private partnership (PPP) deal to be awarded this year — involves the modernization of the country’s second-busiest airport under a 25-year concession agreement.

The consortium of Filinvest Development Corp. and Changi Airports Mena Pte. Ltd. — the second highest bidder with an offer of P13.99 billion — has questioned Megawide and GMR’s capability to complete the project.

Cebuano Senator Sergio R. Osmeña III, who has also questioned the conduct of the auction, asked the Supreme last Thursday for an injunction.

 

PPP helps meet target to halt malaria spread

The Philippine Star, 10 April 2014

 

MANILA, Philippines – An overlooked area of potential for harnessing public-private partnerships (PPP) in the Philippines is healthcare. Proof of success and sustainability of PPPs in this sector is the current National Malaria Control Program (NMCP), a concerted effort of the Department of Health and local government units (LGUs), together with private enterprises, non-profit organizations and benefactors.

The NMCP has successfully reduced sickness and deaths due to malaria by 83 percent and 93 percent, respectively, as of end-2013 compared to 2005 figures.

These reductions were achieved ahead of the 2015 deadline set by the sixth UN Millennium Development Goal (MDG), which is to halt and reverse the spread of malaria by 50 percent.

From 46,342 confirmed cases recorded in 2005, malaria cases were down to only 7,720 in 2013. Over the past four years, five more provinces have been declared malaria-free: Camarines Sur, Batanes, Dinagat Islands, Romblon, and Batangas, bringing the total to 27.

There are 10 other provinces that have not registered any malaria case for three or more consecutive years, and are now primary candidates for attaining a malaria-free status.

While malaria continues to be a health burden in 53 provinces across the country, putting an estimated six million Filipinos at most risk for contracting the infection, especially children, indigenous peoples, and residents of far-flung areas, the strides that the NMCP has achieved are nothing less than remarkable and impactful. The program’s underlying PPP framework is considered pivotal to its enduring success.

The Movement Against Malaria (MAM) is the country’s current campaign toward malaria elimination. It showcases the viability of PPP in healthcare, and is supported by the grant for malaria of the Global Fund to Fight AIDS, TB, and Malaria.

Pilipinas Shell Foundation Inc. (PSFI) – the social development arm of the Shell companies in the Philippines (SciP) – is the principal recipient of the Global Fund grant, which manages MAM in partnership with the DOH, LGUs, community health workers, and volunteers.

The DOH provides technical expertise and overall direction to MAM, while LGUs have been tapped to provide additional resources for the program, including human resources, coordination, transportation, allowances for health workers, and other logistics.

Shell’s involvement in malaria control could be traced back in Palawan as far back as 1999. While the construction of the Malampaya gas-to-power project was underway, Shell Philippines Exploration B.V. (SPEX) and its joint venture partners, the Philippine National Oil Co.–Exploration Corp. and Chevron Malampaya Llc., simultaneously launched a grassroots campaign called Kilusan Ligtas Malaria (KLM).

KLM was the product of a broad stakeholder consultation led by the SPEX joint venture partners, PSFI, and the provincial government of Palawan. Local leaders and residents had identified malaria as a major burden in their community, causing almost 80,000 Palaweños to become sick, and hundreds to perish.

The success and effectiveness of KLM did not escape the attention of the Global Fund, which provided PSFI its first grant for a malaria control program covering five provinces (Palawan, Apayao, Quirino, Sulu, and Tawi-Tawi) from 2006 to 2009.

In 2010, PSFI received recognition for its outstanding management of the program, which also led to another grant by the Global Fund, expanding its coverage to 40 of the 53 malaria-endemic provinces in the country.

“Just as Shell has found its own unique role in the Philippines’ Malaria Control Program, I am certain other enterprises, big or small, have roles to play in malaria as well, not only in the Philippines but across the Asia-Pacific,” said SciP country chairman Edgar Chua to private sector players in support of malaria elimination during the Sixth Regional Meeting of the Asia-Pacific Malaria Elimination Network held recently in Makati City.

Shell has committed to MAM its expertise in community engagement, partnership building, financial management, and procurement and distribution of supplies and logistics, which include long-lasting insecticidal nets and malarial drugs. Religious use of the mosquito nets lined with insecticide remains to be the best way to prevent malaria.

 

‘Teka-teka’

The Philippine Star, 09 April 2014

By Marichu A. Villanueva

 

For more than three years now, heads of government offices have seemingly adopted “teka-teka” mode. This has sort of become the order of the day for those running the various government agencies in the “Tuwid na Daan” of President Benigno “Noy” Aquino III. Typical of Filipino words that are loosely repeated, “teka-teka” means literally “wait, wait.”

The term, however, has taken a pejorative meaning to refer to government policies, programs, and projects that take an interminably long time to get off the ground.

As used, “teka-teka” refers to putting things on “wait” mode by sending proposals or initiatives on hold for further study or review. This has become the trick employed by government officials who want to play it safe. They simply resort to “teka-teka” for any reason because they could not make hard decisions.

Thus “teka-teka” has become a national malaise among many Aquino administration officials. In fact, if there is any sign of brewing trouble, they just let P-Noy to take the hit for them.

This national malaise unfortunately afflicted most of the projects under the Public-Private Partnership (PPP) that were initially launched a few months after P-Noy’s inaugural speech in 2010. Supposedly the top priority of the administration, these PPP projects were not spared from the usual problems related to government red tape, legal troubles from right-of-way to bidding wars, etc.

What is not foreseen in P-Noy’s straight path are the obstacles or roadblocks thrown along the way. What do you do when a losing bidder, or should we say sore loser — some backed by their politician-friends — questions the implementation of approved PPP projects?

President Aquino ticked off a number PPP projects, most of which involved major infrastructure. The bulk of the projects were under the Department of Transportation and Communications (DOTC); the Department of Public Works and Highways (DPWH), and the Department of Education (DepEd).

We had thought that the newly appointed economic managers then would hit the ground running and take firm and decisive steps to fast-track these various infrastructure projects, including roads, airports and railways.

Up to now, or more than halfway through P-Noy’s term, however, we can count on the fingers of one hand the number of PPP projects that have actually laid the cornerstone, or poured the first concrete on the foundation.

The government has already awarded some of these priority infrastructure projects to the biggest names in business such as the Ayalas and Metro Pacific led by Manny V. Pangilinan. But for one reason or another, many other PPP projects are suffering endless delays.

A case in point is the Mactan-Cebu International Airport (MCIA) project. The P17.8-billion project was awarded by the DOTC to the winning bidder, GMR-Megawide, only last Friday. This is more than three months after the Filipino-Indian consortium won the open competitive international bidding for this project held in December last year.

After the usual post-bidding review, the DOTC should have already issued the notice to Megawide-GMR to proceed with implementation. By this time, if the award had been made in December, GMR-Megawide’s bulldozers and other heavy equipment would have begun work on the project already.

We’re not saying that every proposed project should be immediately approved without due diligence on firms bidding for government contracts. Every bidder should satisfy all the requirements for a particular project. This is what “Tuwid na Daan” is all about.

GMR-Megawide submitted the highest bid of P14.4 billion. The winning consortium beat six other bidders which are also big-time Filipino conglomerates with their respective foreign partners. Megawide is one of the top construction firms in the Philippines while Bangalore-based GMR Infrastructure Ltd. is the world’s third largest private airport developer in terms of passenger traffic.

Immediately after winning their bid, Megawide-GMR underwent a barrage of allegations that it should be disqualified because of reported lack of financial capability, poor track record, conflict of interest, among others.

Such serious allegations naturally raised valid concerns, especially from leaders of Cebu like Sen. Sergio Osmeña III. Acting on the Resolution filed by Osmeña, the Senate committee on public services conducted at least two public hearings that looked into these allegations. Top officials and executives of the DOTC and GMA-Megawide were invited to shed light on the issues.

At the Senate hearings, both Megawide and GMR rebutted all the allegations. Apparently, they finally managed to convince also the DOTC that they were right to award the MCIA project to their consortium. But they were unable to win over Sen. Osmeña.

On the eve before the DOTC issued the notice to proceed last Friday night, Osmeña filed before the Supreme Court a petition seeking TRO to stop the DOTC from awarding the MCIA to the winning bidders. While it may have been filed too late to stop the DOTC notice, the winning bidders are not yet out of their troubles.

Despite such troubles, Megawide remains actively involved in PPP projects. In fact, they bagged three other PPP projects, namely, the P5.7-billion new Philippine Orthopedic Center; the PPP School Infrastructure Project Phase One (PSIP-1), the PSIP-2.

The MCIA project is the biggest yet that Megawide will undertake — and the most troubled one as it turned out. Its partner GMR is likewise undeterred by these challenges. GMR is reportedly bidding in six other PPP airport projects.

Many administration projects now being implemented are in catch up mode precisely due to so much delays the investors and private contractors encounter in doing business with the government.

We could only hope and wish these private local and foreign contractors would not resort to cutting corners just to fit the timetable of completion within the remaining 812 days in office of P-Noy.