Malaya Business Insights, 23 July 2012 00:00
Angela Celis
The Aquino administration may roll out 21 Public Private Partnership (PPP) projects this year almost three times the number announced earlier.
According to the agency’s latest status report as of last Tuesday, July 17 there are 21 projects in the PPP pipeline with an indicative cost of $4.965 billion.
The government is keen to approve as many projects as it can to spur growth. An earlier study showed that the projects can jack up gross domestic product growth by as much as two percentage points per year.
The timing, could not be better inasmuch as investors have noted the economy’s strong growth and credit rating has been upgraded making it easier for proponents to borrow at lower rate.
Conglomerates keen to cash in on the projects have been shoring up funds, filling up coffers to bid for the projects. An example is Ayala Corp. wjich last week sold P6.45 billion worth of treasury shares. Last year, the government promised that 10 PPP projects will be rolled out, however only the $46.6 million Daang Hari-SLEX Link Road project has been successfully awarded to Ayala Corp in 2011.
More than 20 companies have also expressed interest to participate in the bidding for the $1.4 billion LRT Line 1 Cavite Extension and O&M, such as San Miguel Infra, Macquarie Group, Mitsubishi Corp., and D.M. Consunji Inc., among others.
Mall giants, such as Ayala Land Sales Inc. and SM Prime Holdings, expressed strong interest to support local PPP projects, such as Talisay City’s Plaza Complex Heritage Restoration and Redevelopment Project.
The investors’ optimism towards President Benigno Aquino III’s PPP program this year is also supported by the Philippines’ strong economic growth in the first quarter at 6.4 percent, faster than the growth experienced by other Asean countries during the said period.
Government officials said that the Aquino administration’s efforts towards good governance and reducing the cost of doing business, which needs to be worked on for the long-term, has also boosted investor confidence.
Of the 21 projects listed in the updated pipeline, the cost of three projects, the operation of maintenance (O&M) of LRT Line 2; the O&M of Puerto Princesa Airport; and the Integrated Transport System, are yet to be determined (TBD).
Two PPP projects have been rolled out in the first half of the year.
These are the $239 million PPP for School Infrastructure Project Phase I, and the $1.4 billion LRT Line 1 Cavite Extension and O&M.
Next on the bidding block is the $377.6 million NAIA Expressway Phase II project and the $480.5 million NLEX-SLEX Connector Project, with the invitation to pre-qualify and bid advertisement expected to be published this month and next month, respectively.
The PPP status report also showed that the government plans to roll out four more projects within the third quarter of the year.
These are the $42.9 million Automatic Fare Collection System; the $190.5 million New Bohol Panglao Airport; the $241.7 million Mactan Cebu International Airport Passenger Terminal Building; and the $38.1 million O&M of the Angat Hydro-Electric Powerplant Turbines 4&5.
Another PPP project is expected to be rolled out in the fourth quarter of the year: the O&M of the Puerto Princesa Airport (cost TBD).
That makes nine PPP projects seen to be rolled out within 2012.
PPP Center Executive Director Cosette Canilao earlier expressed her confidence that the target of eight PPP projects to be rolled out this year will be met.
The PPP Center is also awaiting the National Economic and Development Authority (NEDA) Board’s Approval for three PPP projects.
These are the $128.3 million Modernization of the Philippine Orthopedic Center; the $11.3 million Vaccine Self-Sufficiency Project Phase II; and the $468.8 million Cavite-Laguna Expressway Project.
Meanwhile the finalization of the project structure of other PPP projects is on-going, such as the $42.9 million O&M of Laguindingan Airport; the $29.8 million Grains Central Project; the $121.2 million Establishment of Cold Chain Systems; and the O&M of LRT Line 2 (cost TBD).
The business case study of the $476.2 million Balara Waterhub Project; the Integrated Transport System (cost TBD); the $595.2 million New Centennial Water Supply; and the $34.9 million Logistics Support on the Agri-fishery Products Supply Chain, are on-going.
The PPP Center removed the Cebu Bus Rapid Transportation Project which was earlier included in the pipeline, but the agency said that this does not mean that the project will no longer be considered for PPP, but only that it needs to be further studied.
