THE PHILIPPINE

PPP PROGRAM
COSETTE V. CANILAO
PPP Center Executive Director

Outline of Presentation
The Philippine Investment Climate Infrastructure Sector The Philippine PPP Agenda PPP Achievements Government Support for PPPs

2012 Thrusts & Priorities Pipeline & Status of PPP Projects

www.ppp.gov.ph

The Philippine Investment Climate

Rapid and sustained economic growth is set to continue

Active debt management and solid track record of inflation management

More effective tax administration measures Business confidence is rising (through good governance reforms); surge in investments expected Infrastructure spending dramatically increased
9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0

GDP Growth (YoY)

6.7 5.0 4.8

Real GDP Growth (%)

6.6
5.2 4.2

7.6 6.4 Average: 4.7% 3.7 1.1

3.6
2.9

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012Q1

www.ppp.gov.ph

Source: NSCB data as cited in BSP Presentation to Moodys Investors Service, June 2012

Infrastructure Sector
Infrastructure/ other capital outlays spending grew by 58.8% in Q12012

DPWH has slated P63.5bn for its Infrastructure Program, and 86% of total infrastructure projects in 2012 are already bid out (as of April 2012)
Savings of P6.1bn in 2011 achieved by DPWH from addressing collusion in infrastructure bidding Several airport projects are being implemented and are under construction Government is tapping various mechanisms to accelerate infrastructure development in the countrynational budget, official development assistance (ODA), and public-private partnerships (PPPs)

In the ASEAN region, Philippines ranked highest in terms of PPP readiness

--Infrascope 2011 Study
(By the Economist Intelligence Unit as commissioned by the Asian Development Bank)

www.ppp.gov.ph

Sources: Infrascope 2011, BSP Presentation for Moodys (June 2012)

The Philippine PPP Agenda

Private sector as partner in development

PPP as a strategy to accelerate infrastructure development

The PPP Center as the main facilitator of the PPP Program

www.ppp.gov.ph

Legal Framework
RA 7718: The Amended Build-Operate-Transfer (BOT) Law

BOT-IRR: BOT Laws Implementing Rules and Regulations

RA 7160: The Local Government Code of the Philippines 1991 Other Related Laws o Charters of Government Owned and Controlled Corporations (Republic Acts and Executive Issuances) o Legal Mandates of Implementing Agencies (Republic Acts) o Sectoral Regulatory Agencies (Republic Acts and Executive Issuances)

www.ppp.gov.ph

Institutional Set-up
Contracting Parties/Implementing Agencies Line Agencies (national agencies) Government Corporations Local Government Units Other National Agencies Concerned Line Agencies/ Departments (policymaking) National Regulatory Bodies Sectoral Regulators (e.g. toll regulatory board) Review and Approving Bodies Inter-Agency Investment Coordination Committee Local Government Councils Coordinating and Monitoring Agency Public-Private Partnership Center
www.ppp.gov.ph

The PPP Center

Executive Order No. 8 signed on September 9, 2010:

BOT Center renamed as PPP Center

Expanded mandate:
BOT Law Joint Venture arrangements Other PPP arrangements

PPP Center to: o Provide advisory services o Facilitate development of PPP projects o Advocate policy reforms o Monitor implementation of PPP projects

www.ppp.gov.ph

PPP Achievements
INSTITUTIONAL STRENGTHENING
Reorganization of the PPP Center Capacity Building of PPP Units of Implementing Agencies Improved inter-agency coordination and involvement

ENHANCED LEGAL AND REGULATORY FRAMEWORKS

Proposed amendments to the BOT Law and its Implementing Rules and Regulations Reviewed and streamlined processes in evaluation and approval of projects

CONSULTATIVE AND SYSTEMATIZED PARTNERSHIPS

Dialogues and consultative meetings with foreign and local private investors, banks, development partners, foreign trade missions, and other stakeholders
www.ppp.gov.ph

PPP Achievements
PPP-ENABLED IMPLEMENTING AGENCIES AND LOCAL GOVERNMENT UNITS
Capacitated over 350 IAs and LGUs in PPP project preparation in less than a year Successful launch of the LGU PPP Manual Vols. 1-3; regional training roll-out ongoing DILG-PPP Center Memorandum of Agreement on PPP Capacity Building for local government units Partnerships with various institutions to conduct relevant capacity building interventions on PPP

PIPELINE BUILD-UP AND ROLLOUT OF PROPERLY PREPARED PROJECTS

12 PPP projects approved for PDMF support (total of USD 13M earmarked for pre-investment and other transaction advisory support) Successful tender of the DPWHs Daang Hari-SLEX Link Road project; bidding for DepEds PPP for School Infrastructure Project and LRT Line 1 Cavite Extension Project ongoing

www.ppp.gov.ph

Government Support for PPPs

Project Development Monitoring Facility (PDMF)
IDCA Panel of Firms
CPCS Transcom Ltd. Deloitte Touche Tohmatsu India Pvt. Ltd. Ernst & Young Australia Infrastructure Advisory Hill International SA ICRA Management Consulting Services Ltd. Manabat Sanagustin & Co., CPAs PricewaterhouseCoopers Services LLP Singapore Rebel Group International BV SMEC International Pty Ltd. (SMEC), Australia

PDMF FUNDS AVAILABLE: USD 7M initial contribution from the Philippine Government USD 6M contribution from the Australian Government (administered by ADB) USD 9M additional contribution from the Australian Government (administered by ADB) USD 11.5M counterpart contribution of the Philippine Government

Right of way acquisition (ROWA) and related costs (including resettlement)

Costs of designing, building and otherwise delivering any part of the project
www.ppp.gov.ph

Strategic Support Fund (SSF)

2012 Thrusts & Priorities

Legal and Policy Framework Enhancements
PPP Law BOT Law amendments under Congress deliberations (both Houses) Amendments to E.O. No. 8 Endorsed to the Office of the President Executive Order: Rules on Arbitration and Dispute Resolution submitted to the OES for review JV Guidelines for GOCCs Policy briefs (project selection, identification, and prioritization; viability gap funding; unsolicited proposals; etc.) being developed

Establishment of Template LGU Assistance on PPP

Standard technical assistance (TA) for LGUs being developed through two live PPP projects TA on LGU project screening being considered
www.ppp.gov.ph

2012 Thrusts & Priorities

Contract Management/ Performance Management
Policy Briefs on monitoring and evaluation & contract management being prepared through ADB TA

Capacity Building for IAs and LGUs

Ongoing arrangements with DAP National Government Career Executive Service Development Program (NGCESDP) and Graduate School for Public Management and Development for the creation of a PPP sub module/ course in their respective curricula

Ongoing discussion with DILG on capacity development interventions for LGUs (e.g. Trainers Training for designated PPP officers)
PPP Training Program on water districts being developed PPP Training Program on SUCs being developed
www.ppp.gov.ph

2012 Thrusts & Priorities

Creation of the PPP Knowledge Portal

Planned/proposed content being finalized under the ADB TA Website content currently being improved

PPP Pipeline Build-up

At least 8 PPP projects in the pipeline may be rolled out this year

www.ppp.gov.ph

Pipeline of PPP Projects

LGU PROJECTS EDUCATION
1 project | USD 233M 2 projects | TBD

TRANSPORTATION
8 projects | USD 1.88B

AGRICULTURE
3 projects | USD 186.9M

HEALTH SECTOR
2 projects | USD 126M

WATER SECTOR
3 projects | USD 1.08B

ROAD NETWORK
3 projects | USD 1.29B

TOTAL PROJECT COST: USD 4.80B*

*Project Costs of O&M of LRT-2, O&M of Puerto Princesa, ITS= TBD

www.ppp.gov.ph

STATUS OF PPP PROJECTS as of July 17

PROJECT
Awarded Project Daang-Hari SLEx Link Road
INDICATIVE COST (USD)

STATUS
Toll Concession Agreement signed last 3 April 2012 Deadline for submission of Technical and Financial Proposals is on 18 July 2012 Deadline for submission of Pre-qualification Documents is on 22 August 12 ITPB to be published within July ITPB to be published within August

46.6M

Bidder Due Diligence Ongoing

PPP for School Infrastructure Project Phase I* LRT Line 1 Cavite Extension and O&M

239.0M 1.4B

For Publication of ITPB

NAIA Expressway Phase II NLEx-SLEx Connector

377.6M 480.5M

For ICC/ NEDA Board Approval

Modernization of Philippine Orthopedic Center* Vaccine Self-Sufficiency Project Phase II* Cavite-Laguna Expressway

128.3M 11.3M 468.8M

For NEDA Board approval For NEDA Board approval For NEDA Board approval

*Approved PDMF Support

STATUS OF PPP PROJECTS as of July 17

PROJECT
Automatic Fare Collection System* O&M of Laguindingan Airport* New Bohol Panglao Airport* Mactan Cebu International Airport Passenger Terminal Building*
INDICATIVE COST (USD)

STATUS
For roll-out within 3rd quarter of 2012 Finalization of project structure on-going For roll-out within 3rd quarter of 2012 For roll-out within 3rd quarter of 2012 For roll-out within 3rd quarter of 2012 Finalization of project structure on-going Finalization of project structure on-going Finalization of project structure on-going For roll-out within 4th quarter of 2012 On-going business case study On-going business case study On-going business case study On-going business case study

42.9M 42.9M 190.5M 241.7M 38.1M 29.8M 121.2M TBD TBD 476.2M TBD 595.2M 34.9M

Ongoing Business Case/ Feasibility Study Preparation

O&M of Angat Hydro-Electric Powerplant Turbines 4&5* Grains Central Project Establishment of Cold Chain Systems* O&M of LRT Line 2 O&M of Puerto Princesa Airport Balara Waterhub Integrated Transport System* New Centennial Water Supply* Logistics Support on the Agri-fishery Products Supply Chain*

*Approved PDMF Support

THE PHILIPPINE

PPP PROGRAM
THANK YOU!

Why Invest in the PPP Program?

The PPP Program is anchored in Good Governance.
Government reforms driven by sound fiscal management are starting to bear fruits. Legal and regulatory frameworks are continuously being improved. Infrastructure funds are increasingly available to finance PPP projects in the Philippines. Bigger projects covering wider range of sectors to be offered in 2013.
www.ppp.gov.ph

READY FOR BUSINESS.

PROJECT

INDICATIVE COST (USD)

DESCRIPTION The proposed alignment for the LRT 1 South Extension has an approximate length of 11.7 km from its tie in point at the terminus of LRT Line 1 at the Baclaran Terminal, to the Niyog Station at Bacoor, Cavite, of which approximately 10.5 km will be elevated and 1.2 km will be at-grade. The total length of the integrated LRT Line 1 will be approximately 32.4 km.

LRT Line 1 South Extension

1.37B

LRT Line 2 Operation & Maintenance

TBD

Operation and Maintenance of the existing LRT Line 2 and the proposed 4 km extension from Santolan, Pasig to Masinag, Antipolo. The existing 13.8 km Line 2 runs along the Recto Station in Manila to the Santolan Station in Pasig, along Recto Avenue, Magsaysay Boulevard and Marcos Highway.

Operation & Maintenance of the Laguindingan Airport

41.71M

Operation and maintenance of the newly constructed international-standard airport in Laguindingan, Misamis Oriental.

New Bohol (Panglao) Airport

185.38M

Construction of an international-standard airport to replace the existing Tagbilaran Airport within a 230-hectare spread.

Mactan Cebu International Airport Passenger Terminal Building

235.20M

Construction of a new world-class passenger terminal building in Mactan, Cebu International Airport with a capacity of about 8 million passengers/year.

PROJECT

INDICATIVE COST (USD)

DESCRIPTION The project involves the privatization of the operation and maintenance of the airport. The existing Puerto Princesa Airport will be upgraded/ improved into an international gateway meeting standards of the International Civil Aviation Organization (ICAO). Decommissioning of the old magnetic-based ticketing system and replacing the same with contactless-based smart card technology on LRT Lines 1 and 2 and MRT 3, with the introduction of a centralized back office that will perform apportionment of revenues.

Operation and Maintenance of the Puerto Princesa Airport

TBD

Automatic Fare Collection System

41.71M

Integrated Transport System (ITS) Project

TBD

The project will establish three (3) mass intermodal terminals at the outskirts of Metro Manila one in the north (of EDSA) serving passengers to and from northern Luzon, and two in the south serving passengers to and from Laguna/ Batangas side and those to and from the Cavite side. The terminals will connect passengers from the province to other urban transport systems railway, city bus, taxi, PUV-serving inner Metro Manila.

Cebu Bus Rapid Transit Demonstration Project

TBD

The project will restructure the main urban transport corridor from Bulacao to Ayala in Cebu City. This includes a 16km BRT route designed and built following international best practices and quality standards, two mixed traffic lanes per direction, integration of the drainage system installed along the restructured corridor, and BRT terminals.

PROJECT

INDICATIVE COST (USD)

DESCRIPTION

NLEX-SLEX Connector

467.63M

Construction of a 13.4 km. 4-lane elevated expressway over the Philippine National Railway (PNR) right of way which starts at Caloocan City and ends in Buendia, Makati City. The project will connect North Luzon Expressway (NLEX) and South Luzon Expressway (SLEX) to decongest traffic in Metro Manila.

NAIA Expressway Phase II Project

365.44M

The proposed elevated expressway starts at the existing Skyway then generally follows the existing road alignment over Sales Avenue, Andrews Avenue, Domestic Road and NAIA Road and has entry/exit ramps at Roxas Boulevard, Macapagal Boulevard and PAGCOR City. The project provides access to NAIA Terminals I, II, and III and links two existing expressways namely the Skyway and Manila-Cavite Toll Expressway.

CALA Expressway (Cavite and Laguna Side)

456.27M

Involves the construction of two expressways. One is on the Cavite Side which is a 27.5km, 4-lane highway from the terminus of R-1 Expressway in Kawit, Cavite to Aguinaldo Highway at Silang, Cavite. For the Laguna Side, this will involve the construction of a 14.3km, 4-lane at-grade expressway. The CALA Expressway will be connected to SLEX near Sta. Rosa, Laguna.

PROJECT

INDICATIVE COST (USD)

DESCRIPTION

New Centennial Water Supply Source Project

579.32M

The project will involve the construction of a dam, a water treatment plan and an associated main pipeline to deliver water from the project location to Metro Manila. This project will provide water supply security in the metropolis.

Operation and Maintenance of Angat HydroElectric Power Plant (AHEPP) Auxiliary Turbines 4 & 5

37.08M

Rehabilitation, operation and maintenance of the MWSS-owned auxiliary turbines 4 and 5 installed in Angat Hydro-Electric Powerplant.

Balara Water Hub

463.46M

Construction and operationalization of an international center for water excellence located within the MWSS Balara Compound situated along Katipunan Avenue opposite UP Diliman Campus in Quezon City.

PROJECT

INDICATIVE COST (USD)

DESCRIPTION

Vaccine SelfSufficiency Project (Phase II)

10.50M

The project is envisioned to accelerate progress in vaccine production in the Philippines, and ensure vaccine sufficiency in the country. VSSP II is expected to reduce overall vaccine procurement costs of finished vaccines through local formulation, filling, labeling, and packaging of the following vaccines: Pentavalent (DPT-HepB-Hib, Diptheria, Pertussis, Tetanus-Hepatitis B and Hemphylus Influenza B), Tetanus Toxoid (TT), Single HepB.

Modernization of the Philippine Orthopedic Center

115.86M

Construction and upgrade of hospital buildings and facilities, purchase and supply of modern hospital equipment, furniture and fixtures and the installation of a comprehensive hospital IT system.

PPP for School Infrastructure Project

232.66M

The project will involve the design, financing and construction of about 9,300 one storey and two-storey classrooms, including furniture and fixtures, in various sites in Regions I, III, & IV-A. The project aims to supplement the current program of the Department of Education in reducing classroom backlog.

PROJECT

INDICATIVE COST (USD)

DESCRIPTION

Grains Central Project

28.97M

The project will establish grains bulk handling systems with corn grains processing centers and transshipment stations in major corn producing areas and selected sea ports by upgrading, expanding and enhancing the existing operations in at least fifteen (15) corn postharvest processing and trading centers.

Establishment of Cold Chain Systems Covering Strategic Areas in the Philippines

122.92M

Construction and operationalization of Cold Chain Centers to be located in major production and consolidation areas of agri-fishery products. The Centers will be equipped with the required facilities and machineries for minimal processing of livestock, fisheries and high value crops.

Logistics Support on the Agri-fishery Products Supply Chain: Transportation of Agri-fishery Products utilizing the South Rail Main Line

34.9M

The project will involve the (i) development of railway infrastructure (procurement of train locomotives, wagons, flatbeds, container vans) and (ii) establishment of consolidation centers, transport and storage facilities (construction of consolidation centers and loading/unloading terminals in selected project sites near train stations and rehabilitation of train cargo stations and warehouses equipped with cold rooms/storages, refrigerated transport and other equipment).