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___________________________________________________________________________
2015/SFOM13/030 Session: 6
The Philippine PPP Experience
Purpose: Information Submitted by: Philippines
13th Senior Finance Officials’ Meeting Bagac, Philippines
11-12 June 2015
Eleazar E. RicoteDeputy Executive Director
PPP Center of the Philippines
APEC Senior Finance Officials Meeting
Bagac, Bataan
12 June 2015
2
PPP Program is geared towards
INCLUSIVE GROWTH
PPP as one of the strategies
to accelerate
INFRASTRUCTURE
DEVELOPMENT
2
Private sector as
PARTNER IN
DEVELOPMENT
PPP Center as the
CHAMPION FOR
PUBLIC-PRIVATE
PARTNERSHIPS
33
Aside from public spending,
PPPs will bring in private
sector capital and expertise to
address the infrastructure gap.
The Philippine Government
aims to increase infrastructure
spending to 5% of the country's
GDP by 2016. Public-Private Partnerships
Official Development Assistance
Government-Funded
*Total infrastructure spending for 2013-2016 amounts to
PHP 1.8 Trillion or 55% of the public investment program.
4
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
Expanded mandate:o BOT Law
o Joint Venture arrangements
o Other PPP arrangements
PPP Center to directly report to the PPP Governing Board
PPP Center Services: o Provide advisory services
o Facilitate development of PPP projects
o Manage the Project Development and Monitoring Facility
o Capacitate national implementing agencies and LGUs
o Advocate policy reforms
o Monitor implementation of PPP projectso Establish a repository of database on PPPs
Creation of the Project Development and Monitoring Facility (PDMF)
5
PROJECT PREPARATION
AND DEVELOPMENT
PROJECT REVIEW AND APPROVAL
PREPARATION OF BID
DOCUMENTS
PQ & BID EVALUATION
CONTRACT AWARD AND
IMPLEMENTATION
Capacity Development
Pre-investment financing (PDMF)
Advisory services (legal, technical,
financial matters)
Preparation of PPP
transaction documents
(bid documents, draft
contract, etc)
Monitor project
implementation and
contract compliance
Participate as non-voting
observer of BAC
Provide advice during
procurement process
PPP Center is involved in
every part of the project cycle,
ensuring that projects are
bankable, transparent and
advancing public interest.
PROJECT PREPARATION
AND DEVELOPMENT
PROJECT REVEW & APPROVAL/
PREPARATION OF BID DOCUMENTS
PQ & BID EVALUATION
CONTRACT AWARD &
IMPLEMENTATION
7
Enhanced Legal & Regulatory Framework
Revised BOT Law Implementing Rules and Regulations
EO 78 mandating the inclusion of Alternative Dispute Resolution
mechanisms in PPP contracts
Revised Joint Venture Guidelines
PPP Code for Local Government Units
Establishment of the Contingent Liability Fund in the annual
General Appropriations Act (GAA)
Next Steps
Enactment of the PPP Act
Issuance of Policy Circular and Guidelines on Pipeline
Development, Termination Payments, Viability Gap Funding,
Material Adverse Government Actions, and PPP Best Practices
Institutionalization of the Contingent Liability Fund into the PPP Act
8
Developed Robust PPP Pipeline
10 awarded projects with a total value of USD 4.2 Billion
44 projects in the pipeline in various stages of development amounting to over USD 18 Billion
40 Projects with Project Development and Monitoring Facility (PDMF) support
22 renowned PDMF panel of consulting firms
Next Steps
Hiring of independent consultants through the PDMF
Probity advisory for big-ticket projects
Contract Standardization
LGU PDMF Conceptualization
9
Building Capacities
PPP Manual for LGUs and NGAs
PPP Capacity Building Program for national implementing and
oversight agencies, LGUs, government corporations, and SUCs
Implementation of the LGU PPP Strategy
Next Steps
Development of PPP Knowledge Management Portal
Establishment of Project Monitoring and Evaluation Protocols
Institutional Partnerships with Infrastructure New South Wales
Australia and Japan International Cooperation Agency
Review of the PH PPP Program conducted by OECD to determine
key success points and lessons that can be learned
10
Improvements in the PPP Process
New PPP Appraisal Process
Conduct of Market Sounding
Conduct of One-on-One meetings with Prequalified
Bidders
Next Steps
Strengthening framework, processes, and inter-agency
coordination in implementation of awarded projects
Enhancing the PPP monitoring framework
11
Participation and involvement in regional PPP
initiatives through the APEC PPP Experts Advisory
Panel
Hosting of the Third Asia Pacific Infrastructure
Partnership (APIP) Dialogue and support to
upcoming collaborative discussion
Collaboration with APEC member-economies for
PPP knowledge sharing, capacity building, and
consolidation of resources, development partners’
support, and country initiatives towards a regional
PPP strategy in pursuit of regional connectivity
12
Status No. of
Projects
Estimated Cost
(in billion USD)
PROJECTS UNDER IMPLEMENTATION
Awarded 10 4.20
Other projects for implementation 2 2.13
Sub-total 12 6.33
PPP PIPELINE
Projects under procurement 13 7.85
Projects approved for roll-out 3 4.24
For approval of relevant government bodies 6 4.62
Projects with ongoing studies 5 1.50*
For procurement of consultants 6 TBD
Under conceptualization or development 10 TBD
Sub-total 43 18.21*
TOTAL 55 24.54*
*This does not include projects with no estimated costs yet.
ProjectProject Cost
(US$ billion)Private Partner Status
1. Daang Hari-Slex
Link Road Project
0.045 Ayala Corporation Construction ongoing, 96%
complete as of 25 May
2015
2. PPP for School
Infrastructure
Project (PSIP)
Phase I
0.37 Contract Package A: Bright Future
Educational Facilities Inc.
Contract Package B & C: Citicore –
Megawide Consortium Inc.
8,870 classrooms (95.36%)
completed and delivered
as of 15 May 2015
3. NAIA
Expressway
Phase II
0.35 Vertex Tollways Development Inc.
(a wholly owned subsidiary of San
Miguel Corp.)
Construction ongoing,
43.1% complete as of 24
May 2015
4. PSIP Phase II 0.09 Contract Package A: Megawide
Construction Corporation
Contract Package E: Consortium of
BSP & Co., Inc. and Vicente T. Lao
Construction
1,020 classrooms (23 %)
completed/substantially
completed as of 30 April
2015
5. Modernization of
the Philippine
Orthopedic
Center
0.19 Megawide-World Citi Consortium
Inc.
Ongoing pre-construction
activities
ProjectProject Cost
(US$ billion)Private Partner Status
6. Automatic Fare
Collection System
Project
0.04 AF Payments Inc. (formerly Automated
Fare Collection Services, Inc.)
Members: Ayala Corp. (BPI Card Finance Corp., AC Infrastructure Holdings, Globe telecom, Inc.); and Metro Pacific Holdings, Inc. (MeralcoFinancial Services Corp., Metro Pacific Investments Corp., and Smart Communications, Inc.)
Ongoing
pre-operation
activities
7. Mactan-Cebu
International
Airport Passenger
Terminal Building
0.39 GMR-Megawide Cebu Airport Corp.
(GMCAC)
Members: GMR Infrastructure Ltd., and MegawideConstruction Corp
Ongoing
pre-operation
activities
8. LRT Line 1 Cavite
Extension and O&M
1.44 Light Rail Manila
Corporation (LRMC)
Members: AC Infrastructure Holdings, Metro Pacific Light Rail Corporation, Macquarie Infrastructure Holdings
Ongoing
pre-construction
activities
9. Integrated
Transport System –
Southwest Terminal
Project
0.056 MWM Terminals
Members: Megawide Construction Corp., and WM Property Management, Inc.
Contract signed on
24 April 2015;
Ongoing IC
procurement
10. Cavite-Laguna
Expressway
1.23 MPCALA Holdings NOA issued on 08
June 2015
TOTAL 4.20
15
NLEX-SLEX Connector
O&M of New
Bohol Airport
O&M of Puerto Princesa Airport
Regional Prison
Facilities thru PPP
Bulacan Bulk Water
SupplyITS-South Terminal
O&M of LRT Line 2
Laguna Lakeshore
Expressway Dike
New Centennial
Water Source
O&M of Laguindingan Airport
O&M of Davao Airport
O&M of Iloilo Airport
O&M of Bacolod Airport
Davao Sasa Port Modernization
North-South Railway
CRS-ITP Phase II
Motor Vehicle Inspection System
San Fernando Airport
LRT 1 Dasmarinas Extension
Batangas-Manila Natural Gas Pipeline
Manila Bay-Pasig River-Laguna Lake Ferry System
C5 Transport Service
Clark International Airport
NAIA Development Project
16
Projects under Procurement (13) Integrated Transport System – South
Terminal ProjectBulacan Bulk Water Supply Project
LRT Line 2 O&M Laguna Lakeshore Expressway Dike
Project New Centennial Water Source – Kaliwa
Dam Airport O&M and Development Projects
(Panglao, Laguindingan, Davao, Bacolod, Iloilo, Puerto Princesa)
Regional Prison Facilities through PPP Davao Sasa Port Modernization Project
Projects for Rollout (3) North-South Railway Project – South Line NLEX-SLEX Connector Road Road Transport IT Infrastructure Project
(Phase II)
Projects for Approval (6) LRT Line 6 Project C5 Modern Bus Transit System Civil Registry System-IT Project Phase II Batangas-Manila Natural Gas Pipeline NAIA Development Project
Ortigas Taytay LRT Line 4 Project
www.trevi.com.ph
http://www.flickr.com/photos/nowell1011/6053113570/
http://www.untvweb.com/
Projects with F/S nearing completion (5) Manila Bay-Pasig River-Laguna Lake Ferry
System Project Clark International Airport Plaridel Bypass Road Project San Fernando Airport Project ITS-North Terminal Project
17
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 Internationally-
renowned consulting firms
PDMF Funds | USD 69.47 million USD 18 million from AusAID through ADB
USD 51.47 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).
Seven (7) of the ten (10)
awarded projects were
supported by the PDMF
18
PPP Center awarded as
“Asia-Pacific Grantor of the
Year”
PPP CENTER recognized as
“Best Central Government
PPP Promoter”
1919
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
Ranking Criteria: Legal and regulatory framework (25%)
Institutional framework (20%)
Operational maturity (15%)
Investment climate (15%)
Financial facilities (15%)
Sub-national adjustment factor (10%)
OVERALL SCORERank ScoreΔ
1 Australia 91.8
2 United Kingdom 88.1
3 Republic of Korea 78.8
4 Japan 75.8
5 India 70.3
6 India - Gujarat state 68.0
7 Philippines 64.6
8 People's Republic of China 55.9
9 Indonesia 53.5
10 Thailand 50.4
11 Pakistan - Sindh province 49.9
12 Bangladesh 49.3
13 Kazakhstan 41.4
14 Pakistan 41.0
15 Mongolia 39.7
16 Armenia 38.0
17 Papua New Guinea 33.5
18 Viet Nam 33.1
19 Kyrgyz Republic 29.5
20 Tajikistan 28.7
21 Georgia 26.2
Overall IndexRegulatory
Framework
Institutional
Framework
Operational
Maturity
Investment
Climate
Financial
Facilities
Sub-national
Adjustment
Score 64.6 68.8 66.7 54.5 75.3 63.9 50.0
Rank 7 4 4 9 7 8 6
“The Philippines moves up to join the developed group of countries… By finishing in seventh
position, it is among those which have improved the most.”-- Infrascope 2014 Study
21
Initiative Deliverables Timelines
PPP Knowledge
Management
Portal
Collaborate with Global Infrastructure Hub
to establish website housing the PPP
Knowledge Management Portal,
containing:
a. Best Practices on PPP;
b. PPP infrastructure projects undertaken
by APEC economies; and
c. Directory of private firms, managers,
consultants, and experts involved in
PPP projects
2015
Link the PPP Knowledge Portal with other
existing PPP portals
2015
Contract
Standardization
Collaborate with G20 Global Infrastructure
Hub in developing a compendium of
templates/standard PPP Terms and
Practices among APEC economies
2015
22
BACKGROUND
Serves as a central database for the PPP Program (e.g.
contracts, project documents, policies, issuances, references,
knowledge products, etc.)
Serve as primary source of reliable PPP information
Provides venues for information sharing, dialogue and
consultation with public/private/ local/national and
international PPP stakeholders
Helps provide fast and reliable systems to facilitate
timely/efficient report generation
Supports the full range of knowledge requirements of all its
internal and external users
23
KM Portal Information Systems
Developed Under Development
PPP Center Website
Virtual Data Room Web-based facility for
information dissemination
during bidding process
Intended Users:
Prospective investor,
Implementing Agencies’
Project Officers, and PPP
Center’s Project Officers
Will utilize Secure Socket
Layer (SSL) Certificate
from trusted Certificate
Authority (CA)
Project Information and
Management System
Consultants Management
System
Document Management
and Tracking System
E-Library
Intranet
Repository of PPP-related information:
Policies;
legal and regulatory framework;
tender process; sample contracts;
PPP best practices;
list of private firms, consultants, and experts
involved in PPP projects; and
list of PPP projects undertaken by APEC economies.
Interconnectivity of KM Portals in the APEC region
Serve as platform for PPP information sharing
among APEC member countries
24
25
Provide standard contract templates for APEC member
economies
Serve as a guidance document incorporating PPP best
practices (contract provisions to include, among others,
Material Adverse Government Action, Termination
Payment Regime, and Alternative Dispute Resolution
Provision)
Aims to streamline the drafting of PPP concession
agreements and thus reduce due diligence cost
Encourage private sector participation in PPP projects
through transparent and predictable contract terms
27
Third dialogue since the establishment of APIP in 2010
Held on 04 March 2015 at the Taal Vista Hotel in Tagaytay
City
Focus on ‘urban infrastructure development and
financing’, a key agenda item in Cebu Action Plan
Attended by around 60 representatives from PH government, multilateral development institutions, ABAC
members and APIP private sector panel members
28
Aims to promote development of holistic policy planning
framework to provide guidance to APEC leaders on meeting
infrastructure challenges caused rapid urbanization
Joint initiative of Australia and China, proposed by the APEC Study
Centre and endorsed by the APEC Business Advisory Council
Areas of focus: (1) Design and Planning; (2) Infrastructure Project
and Development; and (3) Project Finance and Investment
Action plan and guidelines to be approved at second biennial
forum in 2016, and presented to APEC leaders and other
stakeholders later that year
29
From 41.9 million Filipinos currently living in urban areas,
56.3% of the population will be living in urban areas by 2030,
increasing to 65.5% in 2050
Core urban issues: overcrowding and congestion, inefficient
urban transport, safer and affordable housing, natural
disaster risks and environmental degradation, and sanitation
Philippine Development Plan to address increasing urbanization by: improving connectivity and efficiency among urban centers,
regional growth hubs
improving wastewater and solid waste management
improving coordination and planning, and streamlining
government processes
Transport
The DOTC presented PPP project timelines and noted that four
(4) out of the nine (9) PPP projects awarded in present
administration are DOTC projects
The DOTC identified the following challenges: Policy – legal readiness and project implementation; institutionalizing
new organizational structure and building capacity
Resources – encouraging participation of local and international
firms and lenders to participate; timing of tenders
People – PPP acceptance of various agencies; risk aversion of
various stakeholders; political environment and transitioning of plans
and projects; ensuring inclusive growth
30
Urban Public Works
The DPWH identified three key urban public work issues: infrastructure development for growth;
governance for institutions and social welfare; and
green traffic and pollution management
With the increase in infrastructure budget, the DPWH plans to: institutionalize good governance and Anti-Corruption reforms;
upgrade quality and safety of roads and bridges with stronger
private sector participation;
provide better access to tourism destinations, ports, and food
production areas;
continue work on Master Plan for flood management in Metro
Manila and surrounding areas; and
develop Mindanao Logistics Network Program, and undertake
resilience and disaster risk management projects
31
Energy
The DOE outlined key energy plans and programs to climate-
proof energy infrastructure and facilities, develop indigenous
sources of energy and expand use of natural gas
To continue the long-term push for sustainable fuels, private
sector assistance is needed to implement measures for 10%
energy efficiency and 10% energy savings by 2030
32
33
The ADB noted that with the high GDP growth,
increased competitiveness, stable political
environment, improved corporate governance, sound
fiscal management, and credit rating upgrades, now is
a good time to attract investments to the Philippines
34
Integrated Planning
The panel noted it may be helpful to develop and publicly
launch overall integrated infrastructure Master Plan (i.e.,
Metro Manila 2015) As internal planning framework, the Master Plan could provide
basis for consistency of decision making across all levels of
government, articulate performance targets, and quantify risks
better
It would also allow private sector time to allocate resources and
provide confidence for long term planning
35
Integrated Planning & Connectivity for Greater Manila
Panel noted growth of PH will come from greater Manila
area. The challenge is ensuring overall planning coherence
and connectivity
While greater mobility is essential, new roads not necessarily
needed to improve access. New infrastructure should be
created selectively; with greater emphasis on managing
existing transport infrastructure systems
Pipeline of Short-Term & Long-Term Projects
The private sector needs a pipeline of both short and long-
term projects to be able to allocate resources and keep
their project teams together for future bids
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