Posts Tagged ‘public-private partnership’

Gov’t trims PPP completion estimate

Business World, 22 May 2014

By Alden M. Monzon

 

THE GOVERNMENT has dialed down its expected number of Public-Private Partnership (PPP) projects completed before the end of the Aquino administration in mid-2016.

PPP Center Executive Director Cosette V. Canilao said that the government has trimmed its initial estimate due to unforeseen delays in the bidding and the awarding of some projects.

Kasi na-delay tayo (It’s because we were delayed) in awarding the Orthopedic center as well as the Mactan airport,” Ms. Canilao toldBusinessWorld yesterday.

The P5.6-billion contract to modernize the Philippine Orthopedic Center hit a road block when activist groups composed of health workers and partylist organizations filed a petition against the project due to its supposed “privatization”.

The P17.5-billion Mactan-Cebu International Airport (MCIA) project, meanwhile, faced delays when losing bidder Filinvest-Changi Consortium filed a complaint against winning bidder GMR-Megawide Consortium, alleging conflict of interest.

According to Ms. Canilao, the government now expects these PPPs by mid-2016:

• the P20.1-billion Phases I and II of the PPP for School Infrastructure Project (PSIP);

• the P15.5-billion Ninoy Aquino International Airport Expressway;

• the P2-billion Daang Hari — South Luzon Expressway Link; and

• the P1.7-billion Automatic Fare Collection System (AFCS).

She added that the orthopedic center and MCIA projects would likely be halfway done before the next President steps in.

 

PPP scheme crucial to meeting infra targets, says NEDA

InterAksyon, 27 May 2014

By Darwin G. Amojelar

 

MANILA – The National Economic and Development Authority (NEDA) said the government’s public private partnership (PPP) program is important to meet the country’s infrastructure target by 2016.

“The success of PPPs will ease the burden of the government providing infrastructure that will subsequently lower the costs of logistics, transportation, and doing business, in general,” Economic Planning Secretary and NEDA Director-General Arsenio Balisacan said in a statement.

The NEDA statement comes after several participants to last week’s World Economic Forum on East Asia said PPP alone may not hold the key to addressing the Philippines’ infrastructure bottlenecks.

Under the Philippine Development Plan 2011-2016 Midterm Update, the country is pursuing comprehensive and long-term strategies to bolster the country’s investment climate and competitiveness which include increasing infrastructure spending targeted at five percent of the GDP by 2016.

Since launching its PPP Program in 2010, the Aquino administration has awarded the following projects:

 

  • P2.01 billion Daang Hari-SLEX Link Road;
  • P15.52 billion NAIA Expressway;
  • P16.42 billion PPP for School Infrastructure Phase 1 and P8.80 billion Phase 2;
  • P5.69 billion Modernization of Philippine Orthopedic Center;
  • P17.52 billion Mactan-Cebu International AIrport Passenger Terminal Building; and
  • P1.72 billion Automatic Fare Collection System (AFCS).

 

The following projects are up for bidding:

 

  • P2.2 billion Integrated Transport System Project – Southwest Terminal Project;
  • P64.9 billion LRT Line 1 Cavite Extension Operation and Maintenance; and
  • P35.42 billion Cavite Laguna Expressway.

 

The PPP Program had suffered delays, with the government pushing back timetables because these were found to be financially unviable.

The NEDA had said the PPP initiative would require up to P739.78 billion in investments through 2016 to boost the economy and the country’s investment rate.

 

Dipolog to adopt public-private partnership

Manila Bulletin / Yahoo!, 25 May 2014

By Nonoy E. Lacson

 

Dipolog City – The Public-Private Partnership (PPP) Center recently conducted an Orientation-Workshop on PPP and Initial Project Structuring for the local government units (LGUs) here, aiming to update the feasibility study of the Galas Port Project in this city.

The two-day orientation workshop was facilitated by the Region 9 office of the National Economic and Development Authority (NEDA-9), and was hosted by the city government here.

The local government had requested the NEDA-9 to provide an update on the feasibility study of the Galas Port Project, and to determine the appropriate PPP scheme – should a private investor gets interested to partner with the LGU in completing and operating the port.

City Mayor Evelyn T. Uy said the PPPC staff, led by Director Eleazar Ricote of the Capacity Building and Knowledge Management Service, provided the necessary technical inputs.

Local government officials, including some members of the City Council here attended the forum.

NEDA-9 Director Teresita Socorro C. Ramos said the workshop started with a presentation of the Galas Port project, highlighting its contribution to regional development, followed by a discussion of the fundamentals of the PPP and the various issues confronting the LGU regarding the PPP scheme.

They also discussed the initial PPP structuring project preparation, and the viability indicators under the project study, Ramos said.

It was also learned that the PPPC staff facilitated a workshop on the templates that may be used by the city government here in pursuing its proposed PPP project.

 

Public-private partnerships crucial to infra program

The Manila Times, 26 May 2014

By Mayvelin Caraballo

 

The National Economic and Development Authority (NEDA) on Monday stressed the crucial role of public-private partnerships (PPP) in the success of the government’s infrastructure program, citing the need to raise infrastructure spending in order to boost the investment climate and improve the country’s competitiveness.

“The success of PPPs will ease the burden of the government in providing infrastructure that will subsequently lower the costs of logistics, transportation, and doing business in general,” NEDA Director General Arsenio Balisacan said.

Balisacan was speaking during the Kick-Off Meeting on the Capacity Development Technical Assistance (CDTA) for “Strengthening Public-Private Partnerships (PPPs) in the Philippines” held at the National Statistical Coordination Board in Makati City on May 22.

The CDTA is part of the current Joint Asian Development Bank (ADB)-Australia-Canada Review Mission in the country.

The group discussed ways to strengthen PPPs in terms of capacity building, project development and monitoring facility, coordination with development partners, and support for PPP reforms of the government.

Under the Philippine Development Plan 2011-2016 Midterm Update, the country is pursuing comprehensive and long-term strategies to bolster the country’s investment climate and competitiveness, which include increasing infrastructure spending targeted at 5 percent of GDP by 2016.

“This review exercise and subsequent third-party evaluation of the CDTA is crucial in our attempt to deepen our understanding of the PPP Program. We need to have a critical assessment of the program’s implementation and outcomes just to be sure that we create accountabilities, meet expectations and increase its impact,” Balisacan said.

Meanwhile, the PPP Center of the Philippines has partnered with various academic institutions nationwide in its effort to reach out to more local governments units (LGUs) that are considering the PPP option for their infrastructure and development projects.

In a statement, the PPP Center said it tapped state universities and colleges (SUCs) and private higher educational institutions (HEIs) to be their partners in providing PPP capacity building interventions at the local level.

The PPP Center noted that the partnership is part of the agency’s LGU-PPP Strategy following its mandated capacity building program, which started with the regional PPP briefings and workshops in 2011 and the development of an LGU PPP Manual in 2012.

PPP Center executive director Cosette Canilao stressed that this is consistent with the PPP Center’s commitment to expand its reach and to share its resources to facilitate properly prepared projects at the local level.

“We wanted to engage these credible and apolitical academic institutions given their inherent potential to assist LGUs and their understanding of local conditions and realities. This will also establish the presence of PPP resource institutions all over the country,” Canilao said.

The PPP Governing Board noted the increasing demand for local governments to be given project-focused assistance in the light of various local project initiatives that could have been better pursued as PPP.

Several SUCs and HEIs nationwide have been selected based on their institutional capacity and resources to deliver technical assistance to local governments in their respective jurisdictions, the PPP Center said.

To date, the PPP Center has already formalized said partnerships through memoranda of agreement with the University of the Philippines (UP)-Planning and Development Research Foundation Inc. of the UP School of Urban and Regional Planning, and the Dela Salle University’s Jesse M. Robredo Institute of Governance.

Both have identified faculty lineup who will be trained and capacitated by the PPP Center on the provision of PPP competency-building interventions to selected local governments, it said.

The PPP Center said there are 57 infrastructure projects under the PPP program that are in various stages of implementation.

So far, contracts have already been awarded for seven PPP projects that have a combined cost of P62.6 billion. These projects are: Daang Hari-SLEX Link Road Project, PPP for School Infrastructure Project Phase 1, NAIA Expressway Project, PPP for School Infrastructure Project Phase 2, Modernization of the Philippine Orthopedic Center, Automatic Fare Collection System, and the Mactan-Cebu International Airport Passenger Terminal.

 

PPPs crucial in attaining gov’t infra spending target by 2016 – NEDA

NEDA, 26 May 2014

 

MANILA—The National Economic and Development Authority (NEDA) stressed the crucial role of public-private partnerships (PPPs) in the success of the Philippine government’s infrastructure program.

This statement was made during the Kick-Off Meeting on the Capacity Development Technical Assistance (CDTA) for “Strengthening Public-Private Partnerships (PPPs) in the Philippines” at the National Statistical Coordination Board, Makati City in May 22, 2014.

The CDTA is part of the current Joint Asian Development Bank (ADB)-Australia-Canada Review Mission in the country. The group discussed ways to strengthen PPPs in terms of capacity building, Project Development and Monitoring Facility, coordination with development partners and support for PPP reforms of the government.

“This review exercise and subsequent third-party evaluation of the CDTA is crucial in our attempt to deepen our understanding of the PPP Program. We need to have a critical assessment of the Program’s implementation and outcomes just to be sure that we create accountabilities, meet expectations and increase its impact,” Balisacan said.

Under the Philippine Development Plan 2011-2016 Midterm Update, the country is pursuing comprehensive and long-term strategies to bolster the country’s investment climate and competitiveness which include increasing infrastructure spending targeted at 5.0 percent of the GDP by 2016.

“The success of PPPs will ease the burden of the government providing infrastructure that will subsequently lower the costs of logistics, transportation, and doing business, in general,” Balisacan said.

Officials in the meeting were NEDA Deputy Director-General Rolando Tungpalan, PPP Center Executive Director Cossette Canilao, Asian Development Bank (ADB) Country Director Richard Bolt, ADB PPP Specialist Aziz Haydarov, SEPF/ADB Director Shigeko Hattori, Australia’s Department of Foreign Affairs and Trade representative Daniel Featherstone, and Canada’s Department of Foreign Affairs, Trade and Development representative Luke Myers.

 

 

 

Schools tapped to help LGUs with PPPs

Business World, 25 May 2014

By Alden M. Monzon

 

THE PHILIPPINE government has tapped higher educational institutions to help boost the capacity of local government units (LGUs) to handle public-private partnership (PPP) projects.

“We wanted to engage these credible and apolitical academic institutions, given their inherent potential to assist LGUs and their understanding of local conditions and realities. This will also establish the presence of PPP resource institutions all over the country,” Undersecretary Cosette V. Canilao, Executive director of the PPP Center, said in a statement dated May 22.

The PPP Center said that it has entered into a formal agreement with the University of the Philippines Planning and Development Research Foundation (UP-Planades) and the Jesse M. Robredo Institute of the De La Salle University to help conduct the capacity building program.

LGUs as well as national agencies have called for more capacity building as the PPP model has increasingly become the favored option to fund infrastructure and development projects, according to the PPP Center.

Ms. Canilao said that the agency has arranged for the necessary personnel from both UP-Planades and the Jesse M. Robredo Institute to undergo appropriate briefing and training next month.

“I think the schedule will be this June,” Ms. Canilao told BusinessWorld via telephone.

She also mentioned that a PPP manual for national line agencies is in the works and will be published soon.

“By second or third quarter — June or July,” she said, when asked when the manual would be ready.

As of last week, there are a total of 57 PPP projects in the government’s pipeline.

 

Independent body needed to regulate PPP

Business World, 21 May 2014

By AJMS and Alden M. Monzon

 

WORLD Economic Forum (WEF) experts noted that the Public-Private Partnership (PPP) program of President Benigno S. C. Aquino III — touted by his administration as an efficient solution to completing infrastructure projects — is far from perfect.

“The government should actively pursue establishing a robust legal and institutional PPP framework, with an independent regulatory function and a trusted dispute-resolution process to enhance regulatory commitment,” Pedro De Almeida, head of Infrastructure and Urban Development Industries, World Economic Forum, told BusinessWorld in an e-mail.

Mr. De Almeida added that PPP is “not a panacea to all the infrastructure challenges,” and that the government should select the best delivery model for infrastructure projects after considering “key criteria” such as funding basis, popular perception, and market competition.

Hanseul Kim, Associate Director and Head of Engineering and Construction Industry of the World Economic Forum, said that the ideal setup would be to separate the functions of the agencies involved in PPP projects.

“The point here is to establish entities with separate authorities (i.e. policy-making, contracting, monitoring, and dispute resolution) with a clear governance structure in order to avoid any conflict of interests, and to have clear responsibilities and competencies,” Mr. Kim said in a separate e-mail.

“This way, authorities can be independent from the political influence or other externalities, and be able to carry out long-term infrastructure plans, often over 10-20 years, that generally exceeds more volatile political duration,” he added.

In the Philippine context, the contracting, implementation and policy-making functions reside with several different national line agencies and government departments.

The reviewing and approving bodies, depending on the costing of the project, are the National Economic and Development Authority (NEDA) Board, the Investment Coordination Committee (ICC) and the Local Development Council.

The NEDA Board is chaired by the President of the Philippines, with the Socioeconomic planning Secretary as Vice-Chairperson, and counts as members the secretaries of Agriculture; Budget and Management; Energy; Environment and Natural Resources; Finance; Interior and Local Government; Public Works and Highways; Science and Technology; Trade and Industry; and Transportation and Communications.

Other members include the Vice President of the Philippines, the governors of the Autonomous Region in Muslim Mindanao and the Bangko Sentral ng Pilipinas — the country’s central monetary authority — as well as the chairman of the Metro Manila Development Authority.

The PPP Center, established on Sept. 9, 2010 by Executive Order No. 8, is the attached agency of the NEDA that monitors projects and coordinates with implementing agencies and other concerned parties.

Its previous incarnation was the BOT Center, established by law in 1990 as an attached body of the Department of Trade and Industry.

Dispute resolution, however, is handled either by each implementing agency’s Special Bids and Awards Committee (SBAC) — in which the PPP Center has observer status — or via proper filing with the courts.

This is separate from the other bids and awards committees of agencies, which are covered by Republic Act (RA) 9184, or the Government Procurement Reform Act.

NEDA Undersecretary Cosette V. Canilao, the executive director of the PPP Center, agreed that regulatory agencies should not be a contracting party in government projects in order to preserve their independence.

She also mentioned that while there are government agencies sharing some of the functions, they are currently trying to change the system through amendments in RA 7718, or the Build-Operate-Transfer (BOT) law.

“There is an overlap for some regulatory and contracting parties. That is being proposed to be separated in the BOT law amendments,” Ms. Canilao said in an e-mail.

Ms. Canilao added that they are planning to institutionalize the role of the PPP Center as the secretariat for the ICC committee and the NEDA board to complete its role as an effective facilitator.

LEGAL CHALLENGES
“Infrastructure PPP projects face a number of challenges over their life cycle, such as regulatory failures, public budget risk, restricted control and flexibility on the assets under the government, lack of transparency in business and renegotiation of contract terms, and these challenges can significantly alter the feasibility of projects,” Mr. De Almeida said.

He added that the decades-long lifespan of some projects can compound investors’ “perceived risks” for returns, noting that in emerging markets, about 6% of PPP projects have experienced distress or cancellation, and over 50% have involved subsequent renegotiation.

Department of Transportation and Communication (DoTC) spokesman Michael Arthur C. Sagcal said that legal challenges arise from private-sector bidders’ desire to expand the scope, and that changes to aspects of bids during the auction process, such as the various terms of reference, are due to government factoring in the bidders’ expertise.

“We also learnt from LRT-1, where DoTC crafted the terms of the LRT-1 project to be more advantageous to government, and we found out that the bidders were actually being very frank when they told us we should change some of the terms,” adding that the auction failed because the financial terms made “little sense” to them.

The project, known as the Light Rail Transit Line-1 Cavite Extension, will be bid out on May 28 after a failed attempt in August 2013, where only one of four pre-qualified bidders made a conditional offer.

The government has since bundled rights to the design for a Common Railway Station at the northern end of EDSA with the project to make it palatable to bidders.

The Aquino government has so far awarded seven projects costing a total of some P62.6 billion under its flagship PPP Program, but it appears that all, save for two or three, are not foolproof legally.

Of the seven awarded, only the school building projects — bid out in two phases — and the NAIA Expressway project have been spared from protests by the losing bidders, or from legal suits.

The awarding of the P1.72-billion Automatic Fare Collection System (AFCS) was questioned both in court by a consumer group and at the DoTC level by the losing bidders.

Awarding of the P17.52 billion Mactan-Cebu International Airport (MCIA) Passenger Terminal Building project also hit snags after second highest bidder Filinvest Development Corp.-Changi Airports International MENA Pte. Ltd. (FDC-CAI) questioned top bidder’s, the tandem of GMR Infrastructure, Ltd.-Megawide Construction Corp., financial capability and raised conflict-of-interest issues.

Questions from the San Miguel-Citra group, particularly SLEx concessionaire South Luzon Tollroad Corp. (SLTC), meanwhile stalled the completion of the Daang Hari toll road, which was awarded to Ayala Corp. in 2011.

A petition, meanwhile, was filed with the Supreme Court seeking to stop the privatization of the Philippine Orthopedic Center (MPOC), also a PPP.

“If done correctly, the PPP model can offer significant advantages to the governments, as well as business and society. By better allocating capacity, risks and incentives to the stakeholders, the model can improve project selection, accelerate infrastructure provision, optimize the costs and utilities throughout the asset’s life cycle, and bring more possibility for innovation,” Mr. De Almeida noted.

 

Cavite-Laguna expressway bidding set early next month

Malaya Business Insight, 21 May 2014

 

The Department of Public Works and Highway (DPWH) yesterday said it will proceed with the bidding of Cavite-Laguna Expressway (CALAX) early next month.

“We clarified some of their concerns on the alignment and we addressed  all the other concerns so we are  pushing with the June 2 bidding” Rogelio Singson DPWH secretary said.

Singson said bidders include MTD Capital Bhd, MPCALA Holdings (Metro Pacific Investments Corporation), Optimal Infrastructure Development Inc. (San Miguel Corporation ) and Team Orion (Ayala Corporation, Aboitiz Land, Inc., Macquarie Infrastructure Holdings (Philippines) Pte. Limited) are present during the meeting

After CALAX , Singson said that the next line up for bidding  will be the Central Luzon East or the Laguna Lake Expressway but it will be presented first to National Economic Development Authority (NEDA) for approval .

The Central Luzon Link Expressway (CLLEX), Phase 1 (Tarlac-Cabanatuan, Nueva Ecija) is a 4-lane expressway with a total length of 30.7 kms. It diverges from SCTEx at 2.5 km north of Luisita Interchange then ends in Cabanatuan City. The project cost stood at P 9.958 Billion

The Laguna Lakeshore Expressway Dike (LLED) is about 47 kilometers expressway dike with two (2) sections as follows: Bicutan-Calamba; Calamba-Los Baños . the project cost stood at P 122.8 billion of which P 57.89 billlion will be for reclamation and P 64.9 billion for expressway.

The CALAX 35.4 billion project will start from the CAVITEX in Kawit, Cavite and end at the SLEX-Mamplasan Interchange in Biñan, Laguna. It has interchanges in nine locations, namely: Kawit, Daang Hari, Governor’s Drive, Aguinaldo Highway, Silang, Sta. Rosa-Tagaytay, Laguna Blvd., Technopark, and a Toll Barrier before SLEX.

The project is a 4-lane, 47.02 km at-grade which will connect the Manila-Cavite Expressway (CAVITEX) and South Luzon Expressway (SLEX) through the Cavite and Laguna provinces.

 

Infra streamlining to drive growth

The Visayan Daily Star, 20 May 2014

 

The national administration is confident about the sustained growth of the domestic economy beyond its term as more social infrastructures have been bidded out and are now being implemented and more are still in the pipeline, a press release from the government said.

Finance Secretary Cesar Purisima, in his speech during the Financial Times-First Metro Investment Corp. Philippines Investment Summit yesterday, said excluding the emergency power projects put in place during the Ramos administration, the Aquino administration posted the highest number of infrastructure projects implemented so far.

There are about 54 projects listed under the public-private partnership initiative of the current administration and seven of these have been awarded.

These seven are the four-kilometer, four-lane DaangHari-SLEX Link Road; PPP for school infrastructure project phase I and II; the four-lane elevated Ninoy Aquino International Airport Expressway Project, the modernization of the Philippine Orthopedic Center, the automatic fare collection system, and the construction of the Mactan-Cebu International Airport passenger terminal building.

The national administration has ensured that needed infrastructure projects are put in place since these are the major economic growth drivers and would ensure that domestic expansion would be inclusive.

Purisima admitted that implementation of these projects cannot be done as fast as everybody wants it to be and not all the projects can be implemented under one administration.

Analysts said the slow implementation of the PPP projects is understandably okay because of the reforms put in place to ensure that the projects were property scrutinized, the press release said.*

 

‘BEST PROCUREMENT POLICY’ FOR PPP

Manila Bulletin, 19 May 2014

 

The Public Private Partnership (PPP) Center will introduce probity advisory into its procurement mechanisms to further institutionalize due diligence, transparency, and accountability in engaging private sector partners.

PPP Center executive director Cosette Canilao said the initiative is envisioned  to further build up the current confidence of local and international business community on the credibility and competitiveness of the country’s PPP procurement policy and practice, in key infrastructure and development sectors. Probity advisory is an internationally recognized best practice in PPP procurements that ensures PPP projects’ ability to stand legal and procedural scrutiny by harnessing independent review and advice at all stages of procurement decisions and processes by the concerned institutions and/or committees. For the private sector, this is an assurance of fairness under a framework of a level playing field and a competitive environment for PPP investment opportunities, said Canilao.