Posts Tagged ‘public-private partnership’

Aquino: More PPP projects awarded than past 3 admins

Rappler, 28 July 2014

 

President Aquino says they’ve awarded more PPP projects than the past 3 administrations

MANILA, Philippines – The Aquino administration has awarded 7 public-private partnership projects (PPPs) versus the 6 solicited PPPs implemented by the previous 3 administrations.

President Benigno Aquino III boasted of this accomplishment in his 5th State of the Nation Address on Monday, July 28.

He stressed that sound infrastructure is needed for the Philippine economy to continue moving forward, be more competitive, accelerate the flow of goods and services, and attract attract more investors.

The President reported a significant increase in infrastructure budget to P404.3 billion ($9.31 billion*) from P200.3 billion ($4.61 billion) in 2011.

He said such increase did not require hike in taxes, except for the Sin Tax Reform Law.

7 PPP projects awarded

To date, the Aquino administration has awarded 7 PPP projects worth about P62.6 billion ($1.44 billion). These include:

The bidding for the most expensive PPP project to date – the National Economic and Development Authority (NEDA) Board-approved, P123-billion ($2.84 billion) Laguna Lakeshore Expressway Dike – will also be opened before 2014 ends. The project will be bid out under the Build-Operate-Transfer and is expected to reduce traffic and flooding in southern Metro Manila and Laguna with the construction of a 47-kilometer flood control dike on top of a 6-lane expressway.

There are more companies now willing to invest in the country through the PPP program, easing the burden on government expenditures, Aquino said.

He attributed this interest in shortened application procedures and decreasing opportunities for bribery in project biddings.

He said the Department of Public Works and Highways (DPWH) saved P28 billion ($646 million) after hastening the implementation of projects.

More infra projects nearing completion

Aquino also mentioned that the Puerto Princesa and Busuanga airports are underway.

He said the government was also able to get good offers for the Mactan-Cebu International Airport expansion project worth P14 billion ($322.92 million), and the NAIA Expressway Project Phase 2 worth P11 billion ($253.63 million).

Also, the DPWH has completed 12,184 kilometers of roads – fixed, paved, or widened – the same length as 4 national roads connecting Laoag and Zamboanga City.

The Tarlac-Pangasinan Expressway project is now facilitating traffic from Tarlac to Rosales, Pangasinan. The Urdaneta portion is expected to be completed before 2014 ends, while the expressway will reach La Union by next year.

Projects that took decades to complete are now seeing completion, Aquino said. They include:

NEDA board-approved projects

Once the C-6 road connecting to San Jose Del Monte, Bulacan is finished, it is expected to decongest traffic in EDSA.

To address the water shortage in Metro Manila by 2021, the Aquino administration approved the Kaliwa Dam Project in General Nakar, Quezon, and the repair of the lines of Angat Dam. The Water District Development Sector Project, under the Local Water Utilities Administration, has also been approved.

Other NEDA board-approved projects in the pipeline include the Laoag City Bypass Link Road project, the Cebu Bus Rapid Transit project, and the Light Rail Transit (LRT) Line 1 South Extension and Line 2 East Extension projects.

The modern Clark Green City in Capas, Tarlac has also been approved. The project is expected to boost commerce in Central Luzon and the rest of the country. This once desolated vast piece of land is seen to be the next, if not better than, Bonifacio Global City, the President said.

“These are only of the few infrastructure projects that we have no plans to pass to the next administration as problems, instead, they are now started to being enjoyed by our bosses, the Filipino people,” Aquino stressed in Filipino. – With a report from Lynda C. Corpuz/Rappler.com

 

*($1 = P43.37)

 

 

PNoy cites infrastructure deals under PPP program

GMA News, 28 July 2014

By Xianne Arcangel

 

President Benigno Aquino III on Monday extolled the numerous infrastructure projects the government was able to start and finish under the Public-Private Partnership (PPP) program as proof that his administration’s good governance yields prosperity.

In his State of the Nation Address, Aquino said his administration was able to sign and award seven PPP projects worth P62.6 billion from December 2011 to June 2014, which is more than the six solicited PPP initiatives inked in the past three administrations.

According to an earlier report, the seven PPP deals awarded by the Aquino administration are:

  • Daang Reyna-Daang Hari connector road to the South Luzon Expressway
  • 9,300 school buildings under Phase-1 PPP for School Infrastructure Project
  • 10,679 school buildings under Phase-2 PPP for School Infrastructure Project
  • Philippine Orthopedic Center modernization
  • Elevated expressway access to Ninoy Aquino International Airport Terminals I, II and III
  • Metro Rail automated, integrated ticketing
  • Three inter-modal mass transportation terminals at the outskirts of Metro Manila.

The PPP program was launched by the Aquino administration in 2010 as a way to boost the Philippines’ decrepit infrastructure, considered a major bottleneck in attracting foreign direct investments.

Aquino said that if before, the government had to offer corporations incentives to invest in the country, now businesses compete with each other for the chance to build infrastructure projects.

Proof that the country had developed a favorable investment climate for infrastructure, Aquino said, were the billions of pesos in premiums paid by the companies that secured the rights to build the Mactan-Cebu International Airport and the NAIA Expressway 2. The premium for the new Cebu airport was P14 billion while that for the new expressway was P11 billion.

The other major infrastructure projects the Aquino administration was able to complete since 2010 include the Tarlac-Pangasinan-La Union Expressway (TPLEX), Aluling Bridge in Ilocos Sur and the Ternate-Nasugbu Road connecting Cavite and Batangas. — JDS, GMA News

 

GANTT CHART | At halftime, here’s PNoy’s score on the PPP Program

InterAksyon, 27 July 2014

By Darwin G. Amojelar

 

MANILA – When President Benigno Aquino III delivers his fifth State of the Nation Address (SONA) tomorrow, he can claim to have awarded 7 infrastructure projects under the Public-Private Partnership (PPP) Program launched 4 years ago.

Barring last-minute hitches, another 2 projects — the P64.9 billion LRT Line 1 Cavite Extension and the P34.5 billion Cavite Laguna Expressway (Calax) — could be awarded within the next few months.

But midway through the Aquino administration’s term, the number of projects awarded to private sector partners comprises only 17 percent of the 54 lined up for the PPP Program (see chart below).

As of July 10, a number of projects of the Department of Transportation and Communications (DOTC) were moving towards formal bidding. Other projects were still in the preparation stage, with the implementing agency still drafting feasibility studies.

The government is banking on the PPP to plug the country’s infrastructure gap and create jobs in the process.

The National Economic and Development Authority (NEDA) had said the PPP initiative would require up to P739.78 billion in investments through 2016 to boost the country’s investment rate and by extension the Philippine economy.

Under its medium-term development plan, the government expects the economy to grow between 7-8 percent through 2016. The Aquino administration also aims to raise its investment rate to 18 percent of gross domestic product by the end of its term from 14 percent at present.

 

PPP program: Of 54 deals, 7 awarded; 20 more at P900B

Philippine Daily Inquirer, 24 July 2014

By Miguel R. Camus

 

MANILA, Philippines–It has been battered and bruised but the Aquino administration’s public-private partnership (PPP) program, whose implementers admit is still a work in progress, remains committed to getting crucial infrastructure projects off the ground.

PPP projects have continuously drawn the spotlight given the crucial roles they play in driving economic growth today and in the decades to come. Reassuring the public and investors in President Aquino’s State of the Nation Address (Sona) on Monday, as the administration had done in the past, would help the program.

This reassurance is critical as the program has its fair share of critics—from impatient bidders to those who feel the process favors certain personalities—but the PPP Center that oversees the massive infrastructure drive says the criticism has not dampened investors’ interest thus far, according to its executive director, Cosette Canilao.

She said the lessons learned and reforms implemented over the last three-and-a-half years meant that the PPP deals could be ramped up until President Aquino steps down in 2016.

Going faster

“We are going faster now,” Canilao said. “We have a healthy pipeline of projects and everything is now moving.”

Canilao said a total of five PPP projects would be completed in two years.

These include the 4-kilometer Daang Hari-SLEx Road project, 7-km Ninoy Aquino International Airport (Naia) Expressway project, a smart-card system for Metro Manila’s railways and deals for the construction of new classrooms, she said.

The number of projects may seem small relative to the program’s overall scale and the administration has refrained from mentioning targets, preferring instead to mention specific projects and how they would benefit the public, based on last year’s Sona of the President.

Aquino’s previous address noted key airport deals like the P17.5-billion Mactan-Cebu International Airport, which has been awarded to a Filipino-Indian consortium, Megawide Construction Corp. and GMR Infrastructure.

The government got a P14.4-billion premium payment for this project, meaning Aquino was expected to highlight this PPP deal in his Sona on July 28.

While bagging a significant premium payment was noteworthy, the government may also highlight the robust participation for the PPP by other groups, both local conglomerates and global airport operators.

Sanctity of contracts

This is also to underscore the growing investors’ confidence in a country, where there is still some concern over the sanctity of contracts.

The President made reference to this in last year’s Sona, when he said the public “seemed to have lost confidence in the contracts the government undertook.”

He assured the public that transparency was observed in awarding contracts to PPP projects.

“We have no plans of entering into questionable contracts today just to bequeath problems to the next administration. Each project has to go through the correct process to ensure that our taxpayers’ hard-earned money will be spent the right way,” Aquino said.

Despite the heavy criticism on the slow pace, some in the private sector said the seeds sowed in the current administration were important for future projects.

Roman Azanza III, Aboitiz Equity Ventures first vice president for business development, said the recent successful projects under the program signaled that the Philippines was a safe place to invest and he “hoped” this could be sustained even under future administrations.

“This administration and the people that devised the BOT [build-operate-transfer] law made real efforts, deal by deal, and project by project, to get to a state where a process can be run that attracts the confidence of not just local investors but foreign players,” Azanza said.

More PPP projects, meanwhile, were on the way.

Canilao noted that getting a steady pipeline was the key in ensuring the program’s sustainability and keeping investors interested.

Indeed, the sheer scale of the program highlights how much work still needs to be done for government and on the other side of the fence, for investors, the pool of potential opportunities.

7 deals so far

As of July 10, the government had awarded seven deals out of a total of 54 identified projects. Those seven, including a P17.5-billion contract to expand and operate Cebu’s main international airport, have a combined value of over P60 billion.

The amount, however, is relatively small compared with about 20 more projects valued at P900 billion ready for awarding or to be rolled out.

Part of these are a P135-billion “subway” project in Metro Manila, a P271-billion commuter rail in Luzon, both of which are under study, and a P24-billion bulk water project for Bulacan province.

The remaining 28 projects, which include more seaports, expressways and a natural gas pipeline, are in various stages of development, the agency’s data showed.

Canilao said the list did not include new projects being considered, including the privatization of the operations of Manila’s Naia, the country’s busiest air gateway.

15 more contracts by 2016

All told, she said the government was still aiming to have 15 PPP contracts signed by the end of Aquino’s term, with 10 turned over to the private sector. Over the next 12 months, the PPP Center is planning to roll out another 20 projects, she said.

“We are now at this sweet spot in the next 12 months,” she said.

Most of the deals are being implemented by the Department of Transportation and Communications and the Department of Public Works and Highways.

Strengthening the capabilities of the two agencies is important to the program’s success, according to Canilao. Timing is also an issue and as the 2016 deadline looms, the PPP Center is keen on what happens beyond Aquino’s term amid concerns the future administration would take a different direction from what was started.

Amend BOT law

“What we need now is to institutionalize the changes that we have started. Part of this is amending the BOT (build-operate-transfer) law to reflect these changes to make the program more sustainable,” Canilao said as she hoped lawmakers would approve these revisions within the year.

She said recent reforms included beefing up its project development and monitoring facility, crucial in ensuring “a steady deal flow.”

Government units and agencies are now more used to dealing with PPPs and processes have been “streamlined,” while measures have been taken to address risks through the creation of a contingent liability fund, Canilao said.

“All of that creates a good environment to attract investor participation,” she said.

This was very different from how the program started out, Aquino said in last year’s Sona as he shared that “studies on which the projects were based were outdated; and the bureaucracy lacked the sufficient knowledge to implement them.”

Controversy

The projects, given their large size and potentially lucrative nature, have also attracted some controversy.

Recently, the awarding of the 45-km Cavite Laguna Expressway deal has stalled after San Miguel Corp. sought the intervention of Malacañang last month to reverse its disqualification, which it said was due to a typographical error.

The front-runner for the project is a tandem between Ayala Corp. and Aboitiz Equity Ventures.

Canilao said that despite these issues, investors’ interest had not waned.

Local conglomerates like Ayala Corp., Metro Pacific Investments and San Miguel are PPP regulars. They said they would continue to bid for projects they found attractive.

Larger projects

But Canilao noted that drawing foreign groups would be crucial in the months and years to come as the PPP Center introduced ever larger projects like the planned subway and commuter railway.

Foreign participation, which also comes with expertise, has been limited, thus far.

Apart from the foreign groups that participated in the P17.5-billion Mactan-Cebu International Airport, only Malaysia’s MTD Group has consistently shown interest in Philippine PPPs. But this has not deterred the agency.

Marketing abroad

“We’re putting forward a system to deliver marketing abroad on our PPP projects,” Canilao said, adding that she was optimistic more international groups would participate.

“We have done our homework in making the process transparent. With the big projects we have conducted, those call the attention of foreign bidders. It says we are open for business,” she said.–With a report from Inquirer Research

 

Philippines Facing the Global Trade Challenges – ASEAN Integration 2015

Stock Market Trading Strategy For New Filipino Investors, 22 July 2014

By Josef Panerio

 

The Philippine economy cannot compete with China, United States and Europe market. But the Philippine market is brewing something bigger to be able to put a flag in the global trade.

One very striking quote that hit me during the PLDT SME Nation FutureTalks about the ASEAN Integration 2015 last July 18, 2014 at Solaire Resort and Casino was

“Big fish is coming to the small ponds, scary right? Yes it is very scary, especially for the small businesses (Small-Medium Enterprises) in the country (Philippines). However the dam is broken.”

The Philippines need our ally countries to join together as one nation and that is what we call the ASEAN Integration 2015 also known as ASEAN Economic Community (AEC). This vision will start next year December 2015 and no matter what, whether we (Philippines) are ready or not it will happen next year.

Philippines may not be ready yet to compete in the global market especially the small and medium enterprises but with the ASEAN integration it helps prepare the small and medium enterprises how to get ready and how to make it happen to enter in the global market.

And according to Joey Concepcion III President and CEO, RFM Corporation for us to make it happen the Philippines government needs to award all the Public-Private Partnership (PPP) to give way and gear-up of the upcoming change.

Once the Public-Private Partnership projects are awarded, many companies stock prices will appreciate higher as this is the much awaited event to happen. Like for the infrastructure improvement and development many companies will benefit from it like EEI, SM, SMC, Ayala Corp, SM Holdings, Megaworld.

We (Philippines) cannot compete to the challenges of the global trade, the global market is too scary for the Philippines to face, we are too small and too vulnerable if we do it alone. With the ASEAN nations united as one, challenges in the global market can be addressed with great and perfect solution, because we are not alone.

The Philippines may face great challenges ahead, but we are not alone in facing those challenges in the global market. We only just have to be educated of the upcoming events and financially educated. Everything starts with awareness and the nation will take action.

 

Allow me to share this story I got from the web, which perfectly fit why the ASEAN is necessary to happen and it goes like this.

There once was a farmer who grew award winning corn. Each year he entered his corn in the state fair where it won a blue ribbon.

One year a newspaper reporter interviewed him and learned something interesting about how he grew it. The reporter discovered that the farmer shared his seed corn with his neighbors.

“How can you afford to share your best seed corn with your neighbors when they are entering corn in competition with yours each year?” the reporter asked.

“Why sir,” said the farmer, “didn’t you know? The wind picks up pollen from the ripening corn and swirls it from field to field. If my neighbors grow inferior corn, cross-pollination will steadily degrade the quality of my corn. If I am to grow good corn, I must help my neighbors grow good corn.”

(Source: http://www.inspirationpeak.com/)

 

PPP projects and the voter map

Business World, 21 July 2014

By Agbayani P. Pingol II

 

ONE of the fundamental principles of democracy is that one person gets one vote. That makes everyone politically equal, in theory. But when voters choose to live in certain places in large concentrations, the outcomes are less equal, at least in terms of their enjoyment of the economic spoils.

A few weeks ago we published a map that showed how the government concentrated on Luzon when it came to distributing projects under its signature Public-Private Partnership (PPP) program. The private sector’s involvement means that the projects which come to the fore will tend to have strong profit potential. One of the implications of this selection process is that only the richer sections of Luzon and major cities in the Visayas and Mindanao have the ability to pay the tolls and the charges demanded by investors. It seems clear on an intuitive level that the in-built bias for potential payoffs will lead to the widening of the gap between developed areas of Luzon and the rest of the country.

Here is a second map that presents the PPP from another angle, which shows the voter-rich areas of the country getting an outsized share of the infrastructure. While it is a staple of democratic thinking that government decisions should benefit the most number of people, it is equally difficult to be a resident of a neglected area and watch other provinces corner the spoils.

Let us take a stab at the possible electoral logic behind this uneven distribution. The Philippines has 44,269,792 registered voters in more than 80 provinces, according to the 2010 Census. Nineteen of the top 20 vote-rich provinces also belong to the top classification for local government revenue, with sixteen of the top 20 vote-rich provinces to be found on Luzon. So far, so good. But it is also possible to be voter-dense while also having a small voter population in absolute terms – the top examples here are Camiguin, Tarlac and Bataan, three electorally insignificant provinces that have also not managed to attract a PPP project. Meanwhile, La Union, with a similar demographic profile, bagged a project under the PPP for reasons that have more to do with the strategic location of its airport, and should be counted as a notable exception.

It all seems quite unfair, but the reality is that, all things being equal, businessmen will go where the money is, and the politicians will go where the votes are. When their interests converge it will sometimes produce a concentration of investment in areas that already enjoy a development head start on the rest of the country. It is possible that a future government will redress the balance by implementing vitally-important projects with little consideration for electoral factors and no hope of a payoff, but that does not seem to be where the policy winds are blowing right now.

 

DOTC vows to address infra backlog in 5 to 10 years

Rappler, 21 July 2014

 

To do this, the agency says fairness, openness, and transparency in the bidding process must be maintained

MANILA, Philippines – Department of Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya said they intend to erase the backlog in transportation infrastructure in the next 5 to 10 years, to meet the country’s needs in the 10 to 20 years that will follow.

In doing this, he stressed that fairness, openness, and transparency must be upheld in bidding and procurement processes.

DOTC has cornered 28 PPP projects worth P529.41 billion ($12.19 billion*) out of 57 Public-Private Partnership (PPP) projects in the pipeline.

The government has so far awarded about P68 billion ($1.56 billion) PPPs, among them are the following:

Apart from the AFCS and Mactan airport projects, DOTC is set to award the P65-billion ($1.50 billion) LRT 1 Cavite Extension Project to the Light Rail Manila Consortium led by infrastructure giant Metro Pacific Investments Corporation and conglomerate Ayala Corporation.

Investor trust

Abaya said vital in addressing the infrastructure backlog is maintaining the trust of investors in the bidding process.

Like in a romantic relationship, he said a crack in the trust would be difficult to recover from.

“If we do any act or make any decision which would sow distrust or shake investor confidence in our processes and practices, we may lose all potential bidders for our future projects altogether,” he said.

He made this statement following a slew of cases filed by losing and disqualified bidders for PPP projects.

The secretary also expressed gratitude that despite the controversies arising from project biddings, numerous companies – both foreign and local – continue to participate in the government infrastructure projects.

“We take this as a vote of confidence in our work, both in terms of structuring projects, as well as in ensuring fairness, openness, and transparency in our bids.” – Rappler.com

 

(*$1 = P43.50)