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5 groups passed airport PPP projects pre-qualification evaluation

T

h e D e p a r t m e n t o f Tr a n s p o r t a t i o n a n d Communications (DOTC) has finished evaluating the pre-qualification (PQ) documents submitted by companies interested in participating in the bundled airports Public-Private Partnership (PPP) projects. According to the Transportation department the 5 qualified bidders for the airport projects are the following:  Filinvest-JATCO-Sojitz Consortium (composed of Filinvest Development Corporation; Filinvest Land, Inc.; Filinvest Alabang, Inc.; Japan Airport Terminal Co., Ltd; Cyberzone Properties, Inc.)  GMR Infrastructure & Megawide Consortium (composed of Megawide Construction Corporation; GMR Airport Developers Limited; GMR Hyderabad International Airport Limited; Delhi International Airport (P) Limited);  Maya Consortium (Aboitiz Equity Ventures, Inc; VINCI Airports SAS; ANA-Aeroportos de Portugal, SA; VINCI Construction Grands Projets SAS; Therma South, Inc.; Hedcor Sibulan, Inc.);  Philippine Airports Consortium (Metro Pacific Investments Corporation; Aeroports de Paris; ADP Ingenierie); and  SMHC-IIAC Airport Consortium (San Miguel Holdings Corporation; Incheon International Airport Corporation; Star Infrastructure Development Corporation; Citra Metro Manila Tollways Corporation). The DOTC divided the 5 regional airport projects into 2 bundles. The first bundle includes Iloilo and BacolodSilay airports while the second bundle covers Davao, Laguindingan, and New Bohol (Panglao) airports (Bundle 2).

Philippine

ANALYST

The PPP projects have a total indicative cost of P108.19 billion. The PPP Center said the private partner will undertake the operation and maintenance of the airport as well as provide additional facilities and other necessary improvements to enhance passenger safety, security, access, passenger and cargo movement efficiency, and operational efficiency under a defined concession period. Completion of the airport projects is crucial given that the Philippines remains at the bottom among its ASEAN-5 peers in terms of air transport infrastructure, ranking 98th out of the 140 economies surveyed in the World Economic Forum’s Global Competitiveness Report for 2015-2016. The result underscores the wide gap in air transport infrastructure that still exists between the Philippines and the rest of the ASEAN-5.

INFRASTRUCTURE

August 2015

INFRASTRUCTURE

Table: PH Ranking in World Economic Forum Survey (in terms of air transport infrastructure) COUNTRY (selected ASEAN countries)

2010 (out of 139)

2011 (out of 142)

2012 (out of 144)

2013 (out of 148)

2014 (out of 144)

2015 (out of 140)

Singapore

2

1

1

1

1

1

Malaysia

29

20

24

20

19

21

Thailand

28

32

33

34

37

38

Indonesia

69

80

89

68

64

66

Philippines

112 (81%)

115 (81%)

112 (78%)

113 (76%)

108 (75%)

98 (70%)

Source: World Economic Forum *Goal is to be part of top 1/3 (33%)

Source: PPP Center http://ppp.gov.ph/?infographics=the-ppp-project-pipeline

Philippine

ANALYST

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Presidentiables on Public Private Partnership (PPP) Program ISSUE

PPP

BINAY

POE

Pro

Pro

Believes in strong partnership between business and government esp. in power, telecoms, and farm-to-market roads.

National government spending for infrastructure and capital outlay (CO) in July 2015 almost doubled compared to expenditures a year ago. Total government spending for the period under review grew by a quarter as a result of the implementation of ‘catch-up measures’ so national government agencies could accelerate their disbursements. The Department of Budget and Management (DBM) attributed the increase in infrastructure and CO disbursements to the ongoing implementation of road work projects under the Department of Public Works and Highways (DPWH). “Earlier this year, the Aquino administration through the DBM established catch-up measures so our departments could accelerate their disbursements. We’re pleased to see that our major spending agencies are responding very well. In July, for example, spending for infrastructure and capital outlay have gunned ahead to expand by almost 100% year-on-year. “What this really means is that our leading agencies for infrastructure programs are making better use of their budgets. As a result, more goods and services are being rolled out to the public, and in better time,” Budget and Management Secretary Florencio “Butch” Abad said. ANALYST

DUTERTE Pro

Seeks more PPPs especially for agriculture

July spending for infrastructure, capital outlay up 93%

Philippine

ROXAS

He’s likely to continue PNoy’s flagship infra program But it suffered delays under his leadership as Secretary of DOTC

Issued PPP ordinance to hasten implementation of projects in Davao city

The surge in spending was also due to the acquisition of aircraft units under the Armed Forces of the Philippines (AFP) Modernization Program of the Department of National Defense (DND), as well as the implementation of local infrastructure projects in theAutonomous Region in Muslim Mindanao (ARMM). Sec. Abad noted that Maintenance Expenditures rose to P36.6 billion in July this year from P21.5 billion in July 2014. The budget secretary said that spending for this sector was made primarily under the Administration’s social protection, education, and health care programs. “The social welfare component of the National Budget has always been a keystone in our growth agenda. If our social development agencies continue to spend as vigorously, not only can we confidently support the continuing expansion of our economy. We can also make sure that the poorest Filipinos get the education, aid, and healthcare services that are urgently due them,” the budget secretary said. The DBM noted that bulk of the disbursements under Maintenance Expenditures were made by the Department of Social Welfare and Development (DSWD) to expand the implementation of theAquino administration’s flagship poverty alleviation program, the Conditional Cash Transfer (CCT) program, as well as to support Emergency Shelter Assistance (ESA) for calamity victims. The Department of Interior and Local Government’s (DILG) spending during the period also bolstered Maintenance Expenditures via locally funded projects, including those for poverty reduction—specifically through the Bottom-Up

INFRASTRUCTURE

August 2015

INFRASTRUCTURE

Expenditure Class

July

Increase/Decrease

2014

2015

Amount

%

Personnel Services

42.8

46.5

3.8

8.8

Maintenance Expenditures

21.5

36.6

15.1

70.1

Infrastructure and Other CO

19.9

38.3

18.5

92.9

Allotment to LGUs

28.5

33.2

4.6

16.3

Support to GOCCs

6.8

2.3

(4.5)

(66.1)

Interest Payments

48.2

53.1

4.9

10.1

Tax Expenditures

0.3

0.3

0.1

27.0

Net Lending

0.5

0.3

(0.2)

(44.8)

168.5

210.7

42.2

25.0

TOTAL DISBURSEMENT Source: Department of Budget and Management

Budgeting (BUB) program—as well as for peace-building, reconstruction, and development projects in conflict-affected areas. “We are optimistic that public spending will continue its upward trajectory in the succeeding months. As budget reforms gain further traction—and as our agencies find appropriate means to optimize their budgets—we can likewise bring the real and lasting benefits of good governance to our citizenry. No Filipino should be left behind,” Sec. Abad said. With more funds channeled to implementing agencies, the challenge now is to expand their “absorptive capacities” and improve their evaluation and monitoring systems. The World Bank, in its Philippine Quarterly Update (PQU) report, said the government must address the following factors that constrict the absorptive capacity of national agencies: 1. Frequent and unpredictable changes in agency policy regarding program implementation; 2. Cumbersome procurement processes exacerbated by lack of forward planning; and 3. Complexity of inter-agency coordination, which at times is exacerbated by avoidable internal administrative errors in some cases. T h e Wo r l d B a n k a l s o p r e s e n t e d m e a s u r e s on how government agencies can improve their absorptive capacities. These measures include:  Timely and consistent passage of the national budget;  Timely release of budget allocations to line agencies;  More effective preparation of spending programs and projects; and  Further improvement of the government procurement process.

Philippine

ANALYST

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INFRASTRUCTURE STATUS OF BIG TICKET INFRASTRUCTURE PROJECTS IN THE PIPELINE AS OF AUGUST 2015 IMPLEMENTING AGENCY

FUNDING SOURCE

Davao City Bypass Construction Project

DPWH

ODA (JICA)

2018-2021

P8.7 billion

ODA agreement signed by NG and the government of Japan.

Metro Manila Priority Bridges Seismic Improvement Project

DPWH

ODA (JICA)

TBD

P3.6 billion

ODA agreement signed by NG and the government of Japan. Preparatory survey for the project is on-going.

Central Luzon Link Expressway (CLLEX) Phase 2

DPWH

PPP

TBD

TBD

Plaridel Bypass Toll Road

DPWH

PPP

TBD

P9.4 billion

PROJECT TITLE

CIVIL WORKS TIMEFRAME

PROJECT COST

STATUS / ISSUES

ROADS AND BRIDGES

DPWH is currently undertaking a business-case for the project through an outsourced consultant. For NEDA Investment Coordination Committee approval.

RAILWAYS North-South Railway Project (South Line)

DOTC

PPP

2017-2021

P170.7 billion

More than 30 companies attended the PQ conference for the project on August 20; San Miguel Corp. was the first company to purchase the bid documents; Interested companies have until October 15 to buy and submit PQ documents.

LRT Line 4

DOTC

PPP

TBD

P50.2 billion

For final NEDA Board approval.

LRT Line 6

DOTC

PPP

TBD

P64 billion

For final NEDA Board approval.

LRT-2 O&M

DOTC

PPP

TBD

No capex

NAIA Development Project

DOTC

PPP

TBD

P74.6 billion

Development, Operations and Maintenance of Bohol Airport

DOTC and CAAP

PPP

TBD

P2.3 billion

Development, Operations and Maintenance of Laguindingan Airport

DOTC

PPP

TBD

P14.6 billion

Development, Operations and Maintenance of Davao Airport

DOTC

PPP

TBD

P40.6 billion

Development, Operations and Maintenance of Bacolod Airport

DOTC

PPP

TBD

P20.3 billion

Development, Operations and Maintenance of Iloilo Airport

DOTC

PPP

TBD

P30.4 billion

Deadline for submission of bids extended for the second time to December; Original schedule for the submission of bids was in June.

AIRPORTS For final NEDA Board approval. (Bundled project) Pre-qualified bidders are: San Miguel Corp. and South Korea’s Incheon International Airport (SMHCIIAC Airport Consortium); Metro Pacific Investments Corp. with a unit of Aéroports de Paris and TAV Havalimanlari Holdings A.S. (Philippine Airports Consortium); Aboitiz Equity Ventures with VINCI Airports (Maya Consortium); Megawide Construction Corp. and India’s GMR Infrastructure (GMR Infrastructure and Megawide Consortium), and Filinvest Land Inc., Japan Airport Terminal Corp. and Sojitz Corp. (Filinvest-Jatco-Sojitz Consortium).

(Bundled project) Pre-qualified bidders are: SMHC-IIAC; Philippine Airports Consortium; Maya Consortium; GMR Infrastructure and Megawide Consortium; and FilinvestJatco-Sojitz Consortium.

OTHER TRANSPORT PROJECTS Davao Sasa Port Modernization Project

DOTC and PPA

PPP

TBD

P19 billion

NEDA seeking LGU approval of the project; Five companies have qualified to bid for the project; Submission and opening of bids scheduled in 4Q2015 while winning bid is targeted for awarding in April 2016.

Integrated Transport System (ITS) – South Terminal Project

DOTC

PPP

2016-2017

P4 billion

Results of the opening of the financial bids on August 11 showed that Ayala Land, Inc. (ALI) outbid Filinvest Land, Inc. although the project has not been awarded yet to ALI.

UTILITIES NIA

ODA (SKEDCF)

2016-2017

P11.2 billion

Court of Appeals dismissed petition to stop the implementation of the mega dam project. Construction is set to start later in February 2016.

New Centennial Water SourceKaliwa Dam Project

MWSS

PPP

TBD

P18.7 billion

Deadline of pre-qualification documents is on 16 October 2015.

Bulacan Bulk Water Supply Project

MWSS

PPP

TBD

P24.4 billion

Team Polaris-Manila Water, First Philippine Holdings Corp. and Abeima Consortium, Filinvest Agua Consortium, San Miguel Corp.-K Water Consortium, and Prime Alloy Water have pre-qualified for the bidding.

PNOC

PPP

NG aims to finish the project in 2017

P10.5 billion

For final NEDA Board approval.

DOJ

PPP

TBD

P50.2 billion

Deadline for Bid Proposals is in November 2015.

Jalaur River Multipurpose Project Phase II

OTHER PROJECTS Batangas-Manila (BatMan) Natural Gas Pipeline Regional Prison Facilities Project

Philippine

ANALYST

INFRASTRUCTURE

August 2015

INFRASTRUCTURE STATUS OF ONGOING BIG TICKET INFRASTRUCTURE PROJECTS AS OF AUGUST 2015 PROJECT TITLE

IMPLEMENTING AGENCY

FUNDING SOURCE

CIVIL WORKS TIMEFRAME

PROJECT COST

STATUS / ISSUES

ROADS NAIA Expressway Phase II

DPWH

PPP

2014-2016

P15.9 billion

PRIVATE PROPONENT: DMCI Holdings, Inc. Would not be able to meet APEC (Asia-Pacific Economic Cooperation) deadline.

Cavite-Laguna Expressway

DPWH

PPP

2016-2020

P55.5 billion

PRIVATE PROPONENT: Metro Pacific Investments Corp.’s MPCALA Holdings, Inc. Ongoing procurement of independent consultant and negotiation.

P64.9 billion

PRIVATE PROPONENT: Light Rail Manila, a consortium of Metro Pacific Investments Corp. and conglomerate Ayala Corp. Ongoing pre-handover and pre-construction activities; and ongoing procurement of independent consultant. PRIVATE PROPONENT: MWM Terminals, a consortium of Megawide Construction Corp. and WM Property Management, Inc. Ongoing pre-construction activities and procurement of independent consultant

TRANSPORT

Light Rail Transit Line 1 – Cavite Expansion

DOTC

PPP

2015-2020

Southwest Terminal of the Integrated Transport System Project

DOTC

PPP

2015-2017

P2.5 billion

Mactan- Cebu International Airport

DOTC

PPP

2015-2019

P17.52 billion

PRIVATE PROPONENT: Megawide-GMR, a consortium of Megawide Construction Corp. and GMR Infrastructure Ltd. Construction ongoing: 7%

ACRONYMS

Philippine

ANALYST

CAAP

Civil Aviation Authority of the Philippines

DOJ

Department of Justice

DOTC

Department of Transportation and Communications

DPWH

Department of Public Works and Highways

JICA

Japan International Cooperation Agency

SKEDCF

South Korea Economic Development Cooperation Fund

LGU

Local Government Unit

LRT

Light Rail Transit

MWSS

Metropolitan Waterworks and Sewerage System

NEDA

National Economic and Development Authority

NG

National Government

NIA

National Irrigation Administration

O&M

Operation and Maintenance

ODA

Official Development Assistance

PPP

Public Private Partnership

PQ

Pre-qualification

TBD

To be determined

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