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Philippine PPP ProgramSDG-6 (Water & Sanitation)

and SDG-11 (Sustainable Cities)

Regional Event on Financing SustainableInfrastructure Development in Asia and the Pacific

UNESCAP - Bangkok6-7 December 2017

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In 2014, the Economist Intelligence Unit Infrascope categorized the Philippines

as a “developed” PPP market in terms of “PPP readiness”, an improvement

from its previous grouping in the “emerging” PPP market category in 2011.

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Accelerated Infrastructure Development

PPP Program

Financing and Implementation

Delivery Mechanisms

Government/local funds

Government borrowings

PPP

v

Our Vision, Our Ambition

Philippine Development Plan 2017-2022

Chapter 19: Accelerating Strategic

Infrastructure Development

Encourage private sector participationCognizant of the private sector’s efficiency andinnovativeness, the government will improve its PPPProgram as a vehicle for private sector participationin financing where appropriate, the construction,operation and maintenance of infrastructureprojects.

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34PROJECTS

PHP 439 Billion

* Projects started from 2010 onwards (excluding terminated MPOC) and 2 projects developed before 2010 (MRT 7 and Skyway Stage 3)

as of Nov. 2017

AwardedPHP 311 Billion / USD 6.2 Billion* 15

Under ProcurementPHP 13 Billion / USD 0.26 Billion 1

3For Evaluation & Approval

Under Development

Under Review by Implementing AgenciesPHP 116 Billion / USD 2.3 Billion 4

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(USD 9 Billion)

PPP Projects

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Water and Sanitation in the Philippines*

92%of population has

access to improved water supply

US$ 838 million per yearinvestment requirement to achieve government targets for 2025 for water supply

74%of population has

access to improved sanitation facilities

US$ 619 million per yearinvestment requirement to achieve universal coverage by 2028

*Based on 2013 Joint Monitoring Programme (JMP) of the World Health Organization (WHO) and UNICEFhttps://www.wsp.org/sites/wsp.org/files/publications/WSP-Philippines-WSS-Turning-Finance-into-Service-for-the-Future.pdf

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Water and Sanitation in the Philippines*

Institutional framework• Integrated national planning structure

• Fragmented implementing agencies:o Metro Manila: national government corporation & 2 private concessionaireso Outside Metro Manila: local government units, water districts (formed as

local government corporations) and few private sector operators

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Philippine PPP Program and Projects contributing to SDG 6

PPP Program

✓ Formulation of PPP Water Code

✓ Enhanced strategy for assistance to local PPPs with water supply and sanitation as priority sectors (project development, capacity building, bundling strategy)

PPP Projects

Frameworkso Build-Operate-Transfer (BOT) variants pursuant to

existing law (BOT Law)o Joint Ventures (JV) with local water districts

pursuant to executive guidelines o JVs with local government units pursuant to their

local ordinances*These frameworks provide for solicited and unsolicited modes

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Source: World Bank

– Beyond One-

Size-Fits-All:

Lessons Learned

from Eight Water

Utility Public-Private

Partnerships in the

Philippines

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Bulacan Bulk Water Supply Project

Bulacan Province

• Located adjacent to the north of Metro Manila

• Main water service providers in the province are 24 water districts with ground water as their main source of water supply

Picture source: ADB

66%

33%

1%

Access to Water Supply (out of 500,000 households in Bulacan)

Piped water

Standalone waterpoints

Others

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Bulacan Bulk Water Supply Project

Supply issues• water supply deficit of approx. 90 million

liters per day

• low water pressure

• depleted groundwater aquifers

• saline water intrusion

Distribution problems• aging distribution pipelines

• high non-revenue water (average of 30%)

Increasing demand

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SCOPEProvision of treated bulk water to 24 water districtsFinancing, design, construction, operations and maintenance of:

• Raw water conveyance system and interconnection pipelines• Water treatment plants and ancillary facilities• Treated water reservoirs• Pumping stations

COST & REPAYMENTProject cost: PHP 24.4 Billion / USD 480 MillionRepayment: concessionaire to collect bulk water charges from water districtsBid parameter: lowest bulk water charge

IMPLEMENTATIONConcession period: 30 years + 2-year construction periodDelivery period: 3 stages in delivery of services to water districts

(fixed periods and demand-triggered)

Bulacan Bulk Water Supply Project

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Bulacan Bulk Water Supply Project

Reduced user feesWinning bid for bulk water charge is approximately 50% less than existing average tariff

PROJECT IMPACT

StatusOngoing construction of water treatment plant and conveyance facilities

Target completion date: 2019

ReplicabilityProject now serves as model for other water supply projects

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The Philippines is a highly urbanized country with approximately 50% of its total population residing in urban areas. (Asian Development Bank, 2014)

38%

22%

19%

16%

5%

Investment Requirements (per sector)

Water supply &sanitationTransportation

Flood control

Waste management

Others

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Urban Sector in the Philippines*

US$ 57 billion

Investment requirement (2008-2025) to meet basic urban services

*Based on ADB Report (2014): Philippine National Urban Assessmenthttps://www.adb.org/sites/default/files/publication/42817/philippines-national-urban-assessment.pdf

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Philippine PPP Program and Projects contributing to SDG 11

PPP Program

✓ PPP Program adapting to sectoral master plans

PPP Projects

✓ Water supply and sanitation✓ Transportation✓ Flood control✓ Waste management

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LRT Line 1 Cavite Extension & O&M

MRT Line 7 AutomaticFareCollection System

Southwest Integrated

Transport System

South Integrated

Transport System

Mactan-Cebu International

Airport

Muntinlupa-Cavite

Expressway

NAIA Expressway

Phase (II)

Metro Manila Skyway Stage 3

Cavite-Laguna Expressway

NLEx-SLExConnector

Road

Awarded Projects

Transport-Related Projects

General principles:❖Demand risk

generally allocated to private sector

❖User-pay principle

❖Regulated fees and adjustment mechanism

❖Performance-based

❖Commercial development rights

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Clark Airport -EPC & O&M

(separate procurement)

LRT Line 2 O&M

LRT Line 6

Pipeline of Projects

Road Transport IT Infrastructure

(Phase II)

PNR South -Commuter Line

O&M

Integrated Transport System - North Terminal

San Ramon Newport

Cebu Bus Rapid Transit (BRT) O&M

Motor Vehicle Inspection

System

East-WestRail

(unsolicited)

Manila Bay(unsolicited)

Metro Manila BRT O&M

BonifacioGlobal City (BGC) BRT

New Manila International

Airport (unsolicited)

Transport-Related Projects

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www.ppp.gov.ph

PPPCenter.Philippines

@PPP_Ph

Public-private-partnership-center-of-the-philippines

PPPPinas

Thank You!

For further information, please visit:

For inquiries, kindly e-mail:

info@ppp.gov.ph

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