The Philippine PPP Experience

___________________________________________________________________________
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. Ricote
Deputy Executive Director
PPP Center of the Philippines
APEC Senior Finance Officials Meeting
Bagac, Bataan
12 June 2015
PPP Program is geared towards
INCLUSIVE GROWTH
PPP as one of the strategies
to accelerate
INFRASTRUCTURE
DEVELOPMENT
Private sector as
PPP Center as the
PARTNER IN
DEVELOPMENT
CHAMPION FOR
PUBLIC-PRIVATE
PARTNERSHIPS
2
2
GovernmentFunded
Public-Private
Partnerships
Official
Development
Assistance
The Philippine Government
aims to increase infrastructure
spending to 5% of the country's
GDP by 2016.
*Total infrastructure spending for 2013-2016 amounts to
PHP 1.8 Trillion or 55% of the public investment program.
Aside from public spending,
PPPs will bring in private
sector capital and expertise to
address the infrastructure gap.
3
3
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
o
o
BOT Law
Joint Venture arrangements
Other PPP arrangements

PPP Center to directly report to the PPP Governing Board

PPP Center Services:
o
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
Establish a repository of database on PPPs
Creation of the Project Development and Monitoring Facility (PDMF)
4
PROJECT PREPARATION
AND DEVELOPMENT
PROJECT
PREPARATION
AND
DEVELOPMENT
 Capacity Development
 Pre-investment financing (PDMF)
 Advisory services (legal, technical,
financial matters)
PROJECT REVEW & 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 &
IMPLEMENTATION
 Monitor project
implementation and
contract compliance
CONTRACT
AWARD AND
IMPLEMENTATION
PPP Center is involved in
every part of the project cycle,
ensuring that projects are
bankable, transparent and
advancing public interest.
PQ & BID
EVALUATION
PROJECT
REVIEW AND
APPROVAL
PREPARATION
OF BID
DOCUMENTS
5
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
7
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
8
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
9
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
10
 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
11
No. of
Projects
Status
Estimated Cost
(in billion USD)
PROJECTS UNDER IMPLEMENTATION
Awarded
10
4.20
Other projects for implementation
2
2.13
Sub-total
6.33
12
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
TOTAL
43
18.21*
55
24.54*
*This does not include projects with no estimated costs yet.
12
Project
Project 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.
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
1,020 classrooms (23 %)
completed/substantially
completed as of 30 April
2015
Contract Package B & C: Citicore –
Megawide Consortium Inc.
Contract Package E: Consortium of
BSP & Co., Inc. and Vicente T. Lao
Construction
5.
Modernization of
the Philippine
Orthopedic
Center
0.19
Megawide-World Citi Consortium
Inc.
Ongoing pre-construction
activities
Project
6.
7.
8.
Project Cost
(US$ billion)
Automatic Fare
Collection System
Project
0.04
Mactan-Cebu
International
Airport Passenger
Terminal Building
0.39
LRT Line 1 Cavite
Extension and O&M
1.44
Private Partner
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. (Meralco
Financial Services Corp., Metro Pacific
Investments Corp., and Smart Communications,
Inc.)
GMR-Megawide Cebu Airport Corp.
(GMCAC)
Members: GMR Infrastructure Ltd., and Megawide
Construction Corp
Light Rail Manila
Corporation (LRMC)
Members: AC Infrastructure Holdings, Metro
Pacific Light Rail Corporation, Macquarie
Infrastructure Holdings
9.
Integrated
Transport System –
Southwest Terminal
Project
0.056
MWM Terminals
Members: Megawide Construction Corp., and
WM Property Management, Inc.
10. Cavite-Laguna
Expressway
1.23
TOTAL
4.20
MPCALA Holdings
Status
Ongoing
pre-operation
activities
Ongoing
pre-operation
activities
Ongoing
pre-construction
activities
Contract signed on
24 April 2015;
Ongoing IC
procurement
NOA issued on 08
June 2015
CRS-ITP Phase II
NLEX-SLEX Connector
San Fernando Airport
NAIA Development Project
Regional Prison
Facilities thru PPP
C5 Transport Service
North-South Railway
Clark International Airport
O&M of LRT Line 2
Bulacan Bulk Water
Supply
ITS-South Terminal
New Centennial
Water Source
Manila Bay-Pasig River-Laguna Lake Ferry System
Motor Vehicle Inspection System
Laguna Lakeshore
Expressway Dike
LRT 1 Dasmarinas Extension
Batangas-Manila Natural Gas Pipeline
O&M of Puerto Princesa Airport
O&M of New
Bohol Airport
O&M of Iloilo Airport
O&M of Bacolod Airport
O&M of Laguindingan Airport
O&M of Davao Airport
Davao Sasa Port Modernization
15
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 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
www.trevi.com.ph
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
http://www.flickr.com/photos/nowell1011/60
53113570/
http://www.untvweb.com/ 16
 Revolving pool of funds made
available to enhance the investment
environment for PPP and to develop a
robust pipeline of viable and wellprepared PPP infrastructure projects
 22 consortia of Internationallyrenowned consulting firms
 PDMF Funds | USD 69.47 million
USD 18 million from AusAID through ADB
USD 51.47 million from the Philippine
Government
Seven (7) of the ten (10)
awarded projects were
supported by the PDMF
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).
17
PPP CENTER recognized as
“Best Central Government
PPP Promoter”
PPP Center awarded as
“Asia-Pacific Grantor of the
Year”
18
OVERALL SCORE
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
Rank
1
2
3
4
5
6
7
8
Ranking Criteria:






9
10
Legal and regulatory framework (25%)
Institutional framework (20%)
Operational maturity (15%)
Investment climate (15%)
Financial facilities (15%)
Sub-national adjustment factor (10%)
11
12
13
14
15
16
17
18
19
20
21
Score
Δ
Australia
United Kingdom
Republic of Korea
Japan
India
India - Gujarat state
Philippines
People's Republic of China
Indonesia
Thailand
Pakistan - Sindh province
Bangladesh
Kazakhstan
Pakistan
Mongolia
Armenia
Papua New Guinea
Viet Nam
Kyrgyz Republic
Tajikistan
Georgia
91.8
88.1
78.8
75.8
70.3
68.0
64.6
55.9
53.5
50.4
49.9
49.3
41.4
41.0
39.7
38.0
33.5
33.1
29.5
28.7
26.2
Overall Index
Regulatory
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
19
19
Initiative
PPP Knowledge
Management
Portal
Contract
Standardization
Deliverables
Timelines
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
Collaborate with G20 Global Infrastructure
Hub in developing a compendium of
templates/standard PPP Terms and
Practices among APEC economies
2015
21
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
22
KM Portal Information Systems
Developed
Under Development
 PPP Center Website
 Project Information and
Management System
 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)
 Consultants Management
System
 Document Management
and Tracking System
 E-Library
 Intranet
23
 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
 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
25
 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
27
 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
28
 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
29
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 climateproof 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
 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
33
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
34
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 longterm projects to be able to allocate resources and keep
their project teams together for future bids
35