The Philippine PPP Program. Attracting Local & Foreign Investment through Public- Private Partnership

Transcription

1 The Philippine PPP Program Attracting Local & Foreign Investment through Public- Private Partnership 23 rd Annual CREBA National Convention October 17, 2014 Diversion 21 Hotel, Iloilo City

2 The Philippine PPP Program PPP Program is geared towards INCLUSIVE GROWTH PPP as one of the strategies to accelerate INFRASTRUCTURE DEVELOPMENT Private sector as PARTNER IN DEVELOPMENT PPP Center as the CHAMPION FOR PUBLIC-PRIVATE PARTNERSHIPS 2 2 2

3 INFRASTRUCTURE SPENDING Government- Funded Public-Private Partnerships The Philippine Government aims to increase infrastructure spending to 5% of the country's GDP by *Total infrastructure spending for amounts to PHP 1.8 Trillion or 55% of the public investment program. Official Development Assistance Aside from public spending, PPPs will bring in private sector capital and expertise to address the infrastructure gap

4 Infrascope 2011: PHL as the Most PPP-Ready in Southeast Asia Analysis of a benchmark index and learning tool that assesses the readiness and capacity of countries in the Asia-Pacific Region to carry out sustainable, long term PPPs Result: Overall Index Ranking Criteria: Legal and regulatory framework (25%) Institutional framework (20%) Operational maturity (15%) Investment climate (15%) Financial facilities (15%) Sub-national adjustment factor (10%) The Philippines 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) 4 4

5 What we want to achieve by Robust pipeline of PPP projects at least 50 projects in the pipeline in various stages of the project cycle at least 15 PPP contracts signed at least 5 projects completed at least 10 infrastructure projects handed over to the private sector for Operation & Maintenance (O&M) 2. Solid PPP legal and policy framework 3. Transparent, predictable and tested procedures 4. Standard contract agreements that uphold reasonable returns and fair risk allocation to the private sector while safeguarding public interest 5 5

6 The PPP Center: Its Evolving Roles and Mandate 6

7 The PPP Center jjjjj Per Executive Order No. 8, s. 2010, as amended by Executive Order No. 136 signed last 28 May 2013: BOT Center renamed as PPP Center PPP Center Services: o o o o o o Provide advisory services Facilitate development of PPP projects Manage the Project Development and Monitoring Facility Capacitate national implementing agencies and LGUs Advocate policy reforms Monitor implementation of PPP projects Expanded mandate: o o o BOT Law Joint Venture arrangements Other PPP arrangements PPP Center to directly report to the PPP Governing Board 7 7

8 The Roles of PPP Center PROJECT PREPARATION AND DEVELOPMENT Capacity Development Pre-investment financing (PDMF) PROJECT PREPARATION AND DEVELOPMENT Advisory services (legal, technical, financial matters) PROJECT REVIEW & APPROVAL/ PREPARATION OF BID DOCUMENTS Preparation of PPP transaction documents (bid documents, draft contract, etc) PQ & BID EVALUATION Participate as non-voting observer of BAC Provide advice during procurement process CONTRACT AWARD AND IMPLEMENTATIO N PPP Center is involved in every part of the project cycle, ensuring that projects are bankable, transparent and advancing public interest. PROJECT REVIEW AND APPROVAL CONTRACT AWARD & IMPLEMENTATION Monitor project implementation and contract compliance PQ & BID EVALUATION PREPARATION OF BID DOCUMENTS 8

9 Robust PPP Pipeline of Projects 9

10 LIST OF PPP PROJECTS (as of 22 September 2014) Status Projects under Implementation No. of Projects Estimated Cost (US$) Awarded B Other projects for implementation B Sub-total B PPP PIPELINE Projects for awarding M Projects under procurement B Projects approved for roll-out M For approval of relevant government bodies B Projects with ongoing studies B For procurement of consultants 10 TBD Under conceptualization or development 10 TBD Unsolicited Project 1 TBD Sub-total B* TOTAL B* *This does not include 27 projects with no estimated costs yet

11 AWARDED PROJECTS (1/2) PROJECT BRIEF DESCRIPTION ESTIMATED COST STATUS (USD) 1 Daang Hari-SLEX Link Road Project Construction of a 4-km toll road connecting the cities of Las Piñas and Bacoor to the South Luzon Expressway M Construction on-going; 47.95% completed (as of 25 August 2014) 2 PPP for School Infrastructure Project (Phase I) Construction of 9,300 classrooms in various sites in Regions I, III and IV-A M 6,180 classrooms completed; 2,578 classrooms under construction (as of 31 August 2014) 3 NAIA Expressway Phase II Construction of an expressway & a feeder road that will connect NAIA Terminals, Skyway, and Manila-Cavite Toll Expressway M Construction on-going; 8.34% complete (as of 25 August 2014) 4 PPP for School Infrastructure Project (Phase 2) Construction of 4,370 classrooms in various sites in Regions, I, II, III, X, CAR, and CARAGA M On-going construction of 276 sub-projects; On-going review of Detailed Engineering Design 11 11

12 AWARDED PROJECTS (2/2) PROJECT BRIEF DESCRIPTION ESTIMATED COST (USD) STATUS 5 Modernization of the Philippine Orthopedic Center Construction of a 700-bed capacity super-specialty tertiary orthopedic hospital M On-going pre-construction activities; On-going procurement of Independent Consultant (IC) 6 Automatic Fare Collection System Replacement of the old magnetic-based ticketing system with contactless-based smart card technology for LRT Lines 1 & 2 and MRT Line M On-going pre-operation activities 7 Mactan-Cebu International Airport (MCIA) New Passenger Terminal Building Construction of a new passenger terminal building with a capacity of 8 million passengers per year; and O&M of old and new facilities M On-going pre-construction activities; On-going procurement of Independent Consultant (IC) 8 LRT Line 1 Cavite Extension and Operation & Maintenance Extension of the current 11.7-km LRT Line 1 to Bacoor, Cavite; and O&M of the 32.4-km integrated LRT Line 1 system 1.44 B Contract signed on October 2, 2014 TOTAL COST OF Projects under procurement: 2.83 B 12 12

13 PHILIPPINE PPP Investment Opportunities 13

14 INVESTMENT OPPORTUNITIES Projects Under Procurement PROJECT STATUS IMPLEMENTING AGENCY EST. COST (US$) 1 Bulacan Bulk Water Supply Project On-going pre-qualification; Submission of Prequalification (PQ) Documents: 20 October 2014 MWSS 542 M 2 Integrated Transport System Project South Terminal On-going pre-qualification; Submission of PQ Documents: 31 October 2014 DOTC 100 M 3 Laguna Lakeshore Expressway Dike Project On-going pre-qualification; Submission of PQ Documents: January 2015 DPWH 2.73 B 4 Operation & Maintenance of LRT Line 2 Request for Qualification/ Invitation to Prequalify to Bid published 13 September 2014 DOTC No CAPEX 5 Integrated Transport System Project Southwest Terminal 6 New Centennial Water Supply Source Submission of Bid DOTC 56 M Request for Pre-Qualification / Invitation to Prequalify to Bid. Published on Oct. 3, 2014 MWSS 416 M TOTAL COST OF Projects under procurement: 3.43 B 14 4

15 INVESTMENT OPPORTUNITIES PROJECTS LIKELY TO BE ROLLED-OUT BY JUNE 2015 (1/2) PROJECT STATUS Implementing Agency EST. COST (US$) 1 Enhanced O&M of Bohol (Panglao) Airport For roll-out. Awaiting NEDA Board approval of 4 other airports for bundling DOTC 2 O&M of Laguindingan Airport DOTC M 3 Davao Sasa Port DOTC 7 O&M of Iloilo Airport For NEDA Board approval DOTC M 52 M M 4 O&M of Puerto Princesa DOTC M 5 O&M of Davao Airport DOTC M 6 O&M of Bacolod Airport DOTC M 8 Motor Vehicle Inspection System DOTC M 9 Regional Prison Facilities through PPP DOJ 1, M

16 INVESTMENT OPPORTUNITIES PROJECTS LIKELY TO BE ROLLED-OUT BY JUNE 2015 (2/2) PROJECT STATUS Implementing Agency EST. COST (US$) 10 LRT Line 1 Dasmariñas Extension Draft F/S under review DOTC TBD 11 North-South Railway Project F/S nearing completion DOTC 3.93 B 12 Mass Transit System Loop F/S nearing completion DOTC 3.0 B 13 San Fernando Airport F/S nearing completion BCDA M 14 Batangas-Manila 1 Natural Gas Pipeline Project F/S nearing completion PNOC TBD 15 Manila Bay-Pasig River-Laguna Lake Ferry System F/S nearing completion DOTC TBD TOTAL INDICATIVE COST OF PROJECTS LIKELY TO BE ROLLED-OUT: B* *This does not include 3 projects with no indicative cost yet 16 16

17 Bulacan Bulk Water Supply Project Construction and operation of bulk water distribution system facilities including water treatment and conveyance structures to the water districts Implementing Agency Metropolitan Waterworks and Sewerage System (MWSS) Expected Output 475 million liters per day (mld) Estimated Project Cost US$ 542 M PPP Structure Build-Operate-Transfer (BOT) Cooperation Period 32 years (inclusive of a 2-year construction period) Status On-going pre-qualification; Submission of Prequalification (PQ) documents: 20 Oct

18 Integrated Transport System Project South Terminal Construction of a central transport terminal which will connect passengers from Southern Luzon to various modes of transport serving inner Metro Manila Implementing Agency Department of Transport and Communications (DOTC) Estimated Project Cost US$ 100 M PPP Structure Build-Transfer-and-Operate (BTO) Cooperation Period 35 years inclusive of construction period Status On-going pre-qualification; Submission of PQ documents: 03 November

19 Laguna Lakeshore Expressway Dike Project Construction of a 47-km expressway dike with two sections: Laguna Lakeshore Expressway Dike and Calamba-Los Baños Toll Expressway; and a flood control system; with a 700-has reclamation component (optional) Implementing Agency Department of Public Works and Highways (DPWH) Estimated Project Cost US$ 2.73 B PPP Structure BTO: Dike Build-Transfer: Reclamation Cooperation Period 37 years (including 7 years construction) Status On-going pre-qualification; Submission of PQ Documents: January

20 O&M of LRT Line 2 Operation and maintenance of the existing 13.8-km LRT Line 2, the approved 4.19-km east extension to Masinag, Antipolo, and any other future expansion Average daily ridership is 197,924pax/day; passes through cities of Manila, San Juan, Quezon City, Marikina, Pasig, and runs over several major thoroughfares of Metro Manila Implementing Agency Department of Transportation and Communications (DOTC) Estimated Project Cost (no CAPEX) Cooperation Period years PPP Structure Operation and Maintenance Status Request for Qualification issued 13 September

21 New Centennial Water Supply Source Financing, design, and construction of the Kaliwa Dam, intake facilities & other appurtenant facilities, and a water conveyance tunnel Implementing Agency MWSS Expected Output Capacity to store 600mld and convey up to 2,400mld of water Estimated Project Cost US$ 416 M PPP Structure Build-Transfer (BT) Cooperation Period 30 years (inclusive of construction) Status Request for Qualification. Published on Oct. 03,

22 O&M of New Bohol (Panglao) Airport Operation and maintenance of the airside and landside facilities of the existing airport until completion of new facilities; O&M of the new facility, management of all sub-concessions, commercial development, and future expansion of the airport. Implementing Agency DOTC and Civil Aviation Authority of the Philippines (CAAP) Estimated Project Cost US$ 52 M (excluding future expansion estimates) PPP Structure Operate-Add-and-Transfer Cooperation Period Status 30 years For issuance of Request for Qualification Passenger traffic is forecasted to reach apx 2.7 M domestic and international passengers in

23 O&M of Laguindingan Airport Operation and maintenance of the existing facilities of the Laguindingan Airport; expansion/ construction of new passenger terminals; enhancement of airside facilities; and installation of required equipment and associated facilities Implementing Agency DOTC and CAAP Cooperation Period Estimated Project Cost US$ 354 M PPP Structure 30 years Operate-Add-and-Transfer Status For issuance of Request for Qualification Traffic 23 23

24 O&M of Puerto Princesa Airport Operation and maintenance of the airside and landside facilities of the existing airport until completion of new facilities; O&M of the new facility, management of all sub-concessions, commercial development, and future expansion of the airport Implementing Agency DOTC and CAAP Estimated Project Cost US$ 116 M (excluding future expansion estimates) PPP Structure Operate-Add-and-Transfer Cooperation Period Passenger Traffic Status 30 years For approval of relevant government bodies 24 24

25 O&M of Davao Airport Operation and maintenance of the existing Davao International Airport; enhancement/ development and O&M of airside facilities to meet the enhanced scale of operations at the airport Implementing Agency DOTC and CAAP Cooperation Period Estimated Project Cost US$ 902 M PPP Structure 30 years Operate-Add-and-Transfer Status For approval of relevant government bodies Traffic 25 25

26 O&M of Bacolod Airport O&M of the existing facilities of the Bacolod-Silay Airport; expansion/ construction of new passenger terminal(s); enhancement of airside facilities; and installation of all the required equipment and facilities as per applicable standards Implementing Agency DOTC and CAAP Cooperation Period Estimated Project Cost US$ 450 M PPP Structure 30 years Operate-Add-and-Transfer Status For approval of relevant government bodies Traffic 26 26

27 O&M of Iloilo Airport O&M of the existing facilities of the Iloilo Airport; expansion/construction of new passenger terminal(s); enhancement of airside facilities; and installation of all the required equipment and facilities as per applicable standards. Implementing Agency DOTC and CAAP Cooperation Period Traffic Estimated Project Cost US$ 676 M PPP Structure 30 years Operate-Add-and-Transfer Status For approval of relevant government bodies 27 27

28 Davao Sasa Port Development and Operations & Maintenance of the existing Davao Sasa Port in Davao City into a modern, international-standard container terminal Implementing Agency DOTC and Philippine Ports Authority (PPA) Estimated Project Cost US$ 388 M PPP Structure BTO Cooperation Period years Status For approval of relevant government bodies 28 28

29 Regional Prison Facilities Through PPP Construction and maintenance of a prison facility with a capacity of 26,880 inmates, including staff housing and administrative buildings, areas for rehabilitation (sports, work and religious activity), and installation of high-security equipment Implementing Agency Department of Justice (Bureau of Correction) Estimated Project Cost US$ 1.12 B PPP Structure Build-Transfer-and- Maintain (BTM) Cooperation Period 23 years (inclusive of a 3-year construction period) Status For approval of relevant government bodies 29 29

30 Motor Vehicle Inspection System Development and O&M of a national network of Motor Vehicle Inspection Centers using inspection methods that will be linked to the information system of the Land Transportation Office (LTO). Implementing Agency DOTC and Land Transportation Office (LTO) Estimated Project Cost US$ 429 M PPP Structure Build-Transfer-Operate (BTO) Cooperation Period 12 years (inclusive of Design and Construction) Status For approval of relevant government bodies By 2035, the motor vehicle population in the country is estimated to reach almost 35 million 30 30

31 LRT Line-1 Dasmariñas Extension Further extension of LRT Line-1 covering approximately 15 kilometers of service line which will start at the proposed terminus of the LRT-1 Cavite extension project in Bacoor to Dasmarinas, Cavite Implementing Agency DOTC Estimated Project Cost TBD PPP Structure TBD Cooperation Period TBD Status Draft Feasibility Study under review 31 31

32 North-South Railway Project: South Line The project will entail the development and revitalization of the existing South line of the Philippine National Railway, covering the Manila-Calamba-Legaspi line and, extending to Matnog in Sorsogon. The private proponent will design, finance and rehabilitate existing structures, build new ones in the South Line as well as undertake its operation and maintenance. Implementing Agency DOTC Estimated Project Cost US 3.93 B PPP Structure BTO Cooperation Period TBD Status Feasibility Study nearing completion 32 32

33 Mass Transit System Loop Construction and O&M of a rail system to connect Bonifacio Global City, Makati Central Business District, and the Mall of Asia area in Pasay; involves construction of a 12-km new rail line which will run mostly underground with some elevated sections making it the first subway in the country. Implementing Agency DOTC Estimated Project Cost US$ 3.0 B PPP Structure TBD Cooperation Period TBD Status Feasibility Study nearing completion 33 33

34 San Fernando Airport Upgrading of the San Fernando Airport facilities to meet International Civil Aviation Organization (ICAO) requirements to cater to larger aircrafts for international flights and safety standards; also involves the construction of an airport terminal with a mall complex Implementing Agency Bases Conversion and Development Authority (BCDA) Estimated Project Cost US$ 464 M PPP Structure BOT Cooperation Period 30 years Status Feasibility Study nearing completion 34 34

35 Batangas-Manila Natural Gas Pipeline Construction of a 110-km natural gas transmission and distribution pipeline facilities from the province of Batangas to transport and supply natural gas to Batangas, Laguna, and Cavite Implementing Agency Philippine National Oil Company (PNOC) Estimated Project Cost TBD PPP Structure TBD Cooperation Period TBD Status Feasibility Study nearing completion 35 35

36 Manila Bay-Pasig River-Laguna Lake Ferry System Development of an integrated ferry system that would traverse the Manila Bay, Pasig River, Marikina River, and the Laguna Lake Implementing Agency DOTC Estimated Project Cost TBD PPP Structure TBD Cooperation Period TBD Status Feasibility Study nearing completion 36 36

37 INITIATIVES FOR A SUSTAINABLE PPP PROGRAM 37

38 Initiatives For A Sustainable PPP Program LEGAL & REGULATORY FRAMEWORK The Amended BOT Law and its Implementing Rules and Regulations (IRR) Revised Joint Venture Guidelines Executive Order on Alternative Dispute Resolution Framework on the Contingent Liability Fund OTHER POLICY ISSUANCES Executive Order creating the PPP Center Executive Order creating the PPP Governing Board Issuances related to PPP for Local Governments o Amended DILG MC o LGU PPP Code Template NEXT STEPS: PPP Act Contract Management Framework IRR on Alternative Dispute Resolution Guidelines on Project Identification, Prioritization, and Selection Sector-specific PPP Guidelines 38

39 Initiatives For A Sustainable PPP Program PIPELINE DEVELOPMENT Project Development and Monitoring Facility Revolving pool of funds made available to enhance the investment environment for PPP and to develop a robust pipeline of viable and well-prepared PPP infrastructure projects 22 consortia of Internationallyrenowned consulting firms PDMF Funds USD million USD 18 million from AusAID through ADB USD million from the Philippine Government PDMF SCOPE OF SERVICES include pre-investment activities of potential PPP projects, including but not limited to: o preparation of project pre-feasibility and feasibility studies o project structuring o preparation of bid documents and draft contracts o transaction advisory o assistance in the tendering process including bid evaluation and project award through competitive selection PDMF Consultant Procurement through PDMF is faster and more efficient (63 calendar days) compared to regular procurement (123 calendar days)

40 Initiatives For A Sustainable PPP Program CAPACITY BUILDING PPP Capacity Building Program for national implementing and oversight agencies, local government units, and government corporations NEXT STEPS: Implementation of the expanded LGU strategy which includes: LGU Internship Program Partnerships with local capacity building institutions o o o PPP 101 Training-Workshops Publication of capacity building materials such as training modules, manuals, etc. Training on advance PPP topics (project based and sector specific): o Knowledge Sharing Sessions (KSS) o PPP Learning Series (LS) Finalization of the PPP Manual for National Government Agencies Twinning Partnership with New South Wales Government Contract Management Knowledge Management and Public Communications Sectoral PPP Policy, Legal, Institutional and Regulatory Frameworks Governance of PPPs 40 40

41 Initiatives For A Sustainable PPP Program PROCUREMENT PROCESS New PPP Appraisal Process Involvement of other oversight agencies in project structuring Hiring of reputable transaction advisors to assists the government in the bidding of PPP projects Empowerment of the Bids and Awards Committee and its Technical Working Group Hiring of Independent Consultants during project implementation PPP Center NEDA DOF DENR New PPP Appraisal Process Initial project review, value for money analysis, commercial financial viability (e.g. review validity of financial models and underlying assumptions), bankability, and financing structuring. Socio-economic analysis Appraisal of risk structure and allocation; fiscal requirements and government undertakings, project s financial internal rate of return; and impact on fiscal sustainability. Environmental impact assessment NEXT STEP: Institutionalization of Probity Advisory for bigger and more complex PPP projects 41 41

42 OTHER INITIATIVES Initiatives For A Sustainable PPP Program Strategic Support Fund (SSF) Funds to finance right of way acquisition (ROWA) and other related costs including resettlement, designing, building and otherwise delivering any part of the project Viability Gap Funding Direct fiscal support to the PPP project; Contingent Liability Fund To primarily address regulatory risk; includes payment in case of government default Extension on Single Borrower s Limit (SBL) BSP Circular providing 25% increase in SBL extended up to

43 OTHER INITIATIVES Initiatives For A Sustainable PPP Program Optimal Risk Allocation Risks are allocated to the party best able to manage the specific risk/s and bear the financial consequences of uncontrollable and uninsurable risks Generally, for PPP projects, the private sector takes on the commercial risks including those related to design and construction, operation and maintenance, market/demand, and financing; while the public sector covers non-commercial ones such as regulatory risks. On the other hand, force majeure is a shared risk between the government and the private sector

44 OTHER INITIATIVES Initiatives For A Sustainable PPP Program Fiscal Incentives Projects costing more than P1 billion are entitled to incentives under the Omnibus Investments Code (OIC) upon registration with the Board of Investments Projects costing P1 billion and below can avail of incentives under OIC subject to inclusion in the current Investment Priorities Plan LGUs may provide additional tax incentives, exemptions, or reliefs, subject to the provisions of the Local Government Code and other pertinent laws 44 44

45 End of Presentation Thank you! 45