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The Philippine Public-Private-Partnership (PPP) Program

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Presentation on theme: "The Philippine Public-Private-Partnership (PPP) Program"— Presentation transcript:

1 The Philippine Public-Private-Partnership (PPP) Program
International Infrastructure Investment & Cooperation Forum China International Contractors Association (CHINCA) 25-29 May , Beijing, China The Philippine Public-Private-Partnership (PPP) Program COSETTE V. CANILAO Deputy Executive Director, Philippine PPP Center

2 Outline of Presentation
The Aquino Administration’s PPP Program Private Sector Role in Phil Socio-Economic Development The Expanding Scope of Private Sector Role Legal Framework Institutional and Regulatory Set-Up The PPP Center and its Services PPP Process PPP Developments Priority Projects for 2011 Prospects for Chinese Partners Summary

3 The Aquino Administration’s PPP Agenda
A Social Contract with the Filipino People Commitment that all transactions are transparent & above board Consultative view on private sector areas of concern, i.e. policy issues, market sounding, etc. Protection of interest of the public as facility users and payers “We are working to develop profitable partnerships with private companies both domestic and international. We have the resources. We have the human capital. Filipino citizens, invigorated by a shared sense of professionalism, integrity, and quality, are working with their leaders to build policy formulations for growth…” Pres. Benigno S. Aquino, III President Benigno S. Aquino III’s Social Contract with the Filipino People envisions a country that has achieved inclusive growth and is characterized by rapid, sustained, and broad-based economic growth that is focused on creating more jobs and new opportunities to achieve full employment, and on significantly reducing poverty. In order to attain this vision, the development strategies will be directed towards attaining a high and sustained economic growth, providing equal access to development opportunities while formulating effective social safety nets. To help achieve the high and sustained economic growth needed to generate productive employment opportunities, the Government commits to provide an enabling environment for private sector investment through a stable macroeconomic environment and sound and consistent public policies.

4 Private Sector Role in Economic Development
Indispensable role of the private sector recognized by the Philippine constitution – “private sector as partner in development” Private sector participation most prominent in infrastructure and development projects traditionally provided by government Policy environment supports private sector’s critical role structural adjustments policies - privatization, deregulation and liberalization market-based tariff setting; broad range of government support; various mechanisms for public-private partnerships economic agenda to harness private sector financing and efficiency The Philippine Government recognizes the essential role of the private sector as the main engine for national growth and development. Private sector investors will be selected through open competition under fair and transparent terms. All interested investors will be given a level playing field with reasonable returns and appropriate sharing of risks without compromising the protection of public interests. Through this program, end-users will be provided with adequate, safe, efficient, reliable, and reasonably-priced infrastructure services.

5 Expanding Private Sector Role
“Three Waves” of Private Sector Participation Disposition/Sale of Assets through the Asset Privatization Trust (APT) and the Committee on Privatization Late 80s to Early 90s – Energy Act (Power Purchase Agreements); Philippine BOT Law (RA 6957); 1994 Amended BOT Law (RA 7718) Present and Onwards – The Public-Private-Partnership (PPP) Phase The PPP Phase Expanded range of private sector engagements – Management Contracts, Lease, BOTs, JVs, Concessions, other variants PPPs in traditional (transportation, water, etc) and non-traditional infrastructure (ICT, health, education, etc) sectors Mixed financing structure; project bundling/unbundling, etc. The Philippines boasts of a long experience of public-private partnership (PPP) initiatives, which serves as a rich basis for future investments. With its aggressive PPP promotion, the government was and is able to attract private partners to invest not only in traditional infrastructure projects, such as power, transportation, and water sectors, but also in non-traditional infrastructure and development sectors, such as information and communications technology, health, and property development. Through the partnerships with private sector, the power crisis in the early 1990s was addressed. The partnership likewise helped improve road network quality, transport linkages and social services. To date, approximately US$ 19.5 billion in investment has already been generated since its inception. Today, PPP can be credited in helping realize various development projects both at the national and local levels across various infrastructure sectors.

6 LEGAL FRAMEWORK The Amended Build-Operate-Transfer (BOT) Law (RA 7718)
BOT Law’s Implementing Rules and Regulations (IRR) Charters of Government Owned and Controlled Corporations (Republic Acts and Executive Issuances) Legal Mandates of Implementing Agencies (Republic Acts) Sectoral Regulatory Agencies (Republic Acts and Executive Issuances) The Local Government Code (RA 7160) Procurement Reform Act (RA 9184) The government’s PPP Program is governed by the amended Build-Operate-Transfer (BOT) Law and its IRR. The BOT law and its IRR recognizes other republic acts and executive issuances of Implementing/Line Agencies including local governments, Government Owned and Controlled Corporations, sectoral regulatory agencies and other related laws such as the Procurement Reform Act.

7 INSTITUTIONAL SET-UP Contracting Parties (enters into PPP/BOT Agreement) Implementing Agencies (national agencies) Government Corporations Local Government Units (Province, City, Municipality) Other National Agencies Concerned Line Agencies/Departments (policymaking) National Regulatory Bodies (Finance, Economic Planning, Environment, Securities and Exchange, Central Bank, etc.) Sectoral Regulators (e.g. toll regulatory board) Review and Approving Bodies Inter-Agency Investment Coordination Committee Local Government Councils Coordinating and Monitoring Agency The PPP Center

8 The PPP Center Pres. Aquino signed Executive Order No. 8 (09 September 2010) BOT Center renamed PPP Center and transferred attachment from DTI to NEDA Expanded mandate covers all arrangements under the BOT Law, Joint Venture arrangements, and other PPP arrangements Promote the PPP Program Facilitate development of PPP Projects Advocate policy reforms Monitor PPP implementation By virtue of Executive Order No. 8, the Build-Operate-Transfer (BOT) Center was renamed into the Public-Private Partnership Center (PPPC) of the Philippines and its attachment was transferred from the Department of Trade and Industry (DTI) to the National Economic and Development Authority (NEDA). This move is consistent with the government's economic agenda that has PPP as a major strategy in the pursuit of critical infrastructure development. The PPP Center's transfer to NEDA gives the Center a strategic link to key infrastructure program and policy, regulatory bodies and approving agencies, and most importantly, implementing agencies and local government units (LGUs) which are ultimately the entities forging partnerships with private sector. Basically, the functions of the PPP Center include the following: Provide advisory services and technical assistance to agencies/LGUs in project preparation and development Recommend plans and policies related to PPP in consultation with appropriate agencies/LGUs Manage and administer the Project Development and Monitoring Facility (PDMF Fund) Monitor and facilitate implementation of priority PPP projects of agencies/LGUs To meet the mandate given to the PPP Center, it has been reorganized and the new structure’s focus on project development, capacity building and monitoring of contract compliance is consistent with the President’s vision for the PPP Center to be the lead coordinator and monitoring agent of the country’s PPP Program. Further, under EO 8, approximately USD 6 million (300 million pesos) was allocated to the PPP Center to fund the preparation of business cases, pre-feasibility and feasibility studies for potential PPP projects.

9 PPP Process Start Process Responsible Party PPP Center Intervention
Project Preparation IAs/LGUs Fund pre-investment activities through the PDMF Provide Training & Capacity Development Provide technical assistance in the review of the Project’s financial and economic viabilities Provide legal advice during formulation of the contract Project Submission to NEDA-ICC (Complete and qualified documentation) The Government is committed to facilitating the approval and implementation process for PPP projects. In accordance with this, solicited proposals will be processed within six (6) months upon submission of all required documents to the NEDA-ICC. Qualified PPP proposals must complete all necessary documents to facilitate the approval process. While the BOT Law allows for the government to process unsolicited proposals, solicited proposals will be actively promoted. IAs/LGUs Project Review & Evaluation NEDA Secretariat/LGUs Assist IAs/LGUs in complying with requirements during the Project & Contract evaluation

10 PPP Process Process Responsible Party PPP Center Intervention
LGU/ICC Approval ICC Technical Board ICC Cabinet Committee NEDA Board Investment Coordination Committee (ICC) NEDA Board Preparation of Request for Proposals (RFP) Assist in the preparation of bid Documents Invitation & Pre-qualification IAs / LGUs Per BOT Law IRR, non-voting observer of PBAC for national projects Provide advice during procurement process Preparation and Submission of Bids Private Sector Evaluation of Bids IAs / LGUs Assist in the evaluation of bids Award & commencement of Implementation IAs / LGUs Monitor implementation

11 PPP Program Updates 2011 PPP Projects in the Roll-Out launched in November 2010 and February 2011 First five (5) projects to be bid in the first half of the year Next five (5) projects to be bid in the second half of the year Projects in the roll-out are mostly transportation projects Amendment of the BOT Law and its IRR under way Public hearing ongoing Collaborative efforts with government PPP stakeholders initiated

12 PPP Program Updates Capacity development for government PPP stakeholders To ensure reliable Pre-FS/FS output To equip efficient evaluation and approval of projects Project Development and Monitoring Facility beefed up To help finance Pre-FS/FS To ensure high success rate

13 2011 PPP Projects DaangHari – SLEX Link Project
Implementing Agency: DPWH Estimated Project Cost: US$ 35.5M Proposed Scheme: Solicited BTO Expected Bidding Bid Date: First half of the year NAIA Expressway Phase 2 Project Estimated Project Cost: US$ Expected Bid Date: First half of the year The projects under the PPP Program were selected based on the following criteria: 1. Project Readiness/Preparation a. For 2011 Rollout i. Feasibility Study to be completed within 2010 to 2011, ii. Completed Feasibility Study being reconfigured for PPP, and iii. Ready to tender in 2011. b. For Medium-Term Rollout and other PPP Projects i. Included in the PPP pipeline projects of the Implementing Agencies, and ii. Initial preparation on-going, i.e., concept stage, hiring of consultants for Feasibility Study preparation. 2. Responsiveness to the sector’s needs (e.g., part of the transport network system,water supply/sewerage, electric power capacity, etc); and 3. High Implementability (bankable, no major issues).

14 2011 PPP Projects NLEX-SLEX Connector Project
Implementing Agency: DPWH Estimated Project Cost: US$ M Proposed Scheme: Unsolicited PPP Expected Bidding Bid Date: First half of the year CALA-Manila Side Expressway Project Estimated Project Cost: US$ M Proposed Scheme: Solicited PPP Expected Bid Date: Second half of the year

15 2011 PPP Projects Puerto Princesa Airport Development Project
Implementing Agency: DOTC Estimated Project Cost: US$ 97.78M Proposed Scheme: Solicited PPP Expected Bidding Bid Date: Second half of the year New Legaspi Airport Development Project Estimated Project Cost: US$ 71.11M Expected Bid Date: Second half of the year

16 2011 PPP Projects New Bohol Airport Development Project
Implementing Agency: DOTC Estimated Project Cost: US$ M Proposed Scheme: Solicited PPP Expected Bidding Bid Date: Second half of the year O&M Privatization of Laguindingan Airport Project Estimated Project Cost: US$ 33.33M Expected Bid Date: Second half of the year

17 2011 PPP Projects LRT Line 2 East Extension Project
Implementing Agency: DOTC Estimated Project Cost: US$ M Proposed Scheme: Solicited PPP Expected Bidding Bid Date: Second half of the year LRT Line 1 South Extension Project Estimated Project Cost: US$ 1,555.55M Expected Bid Date: Second half of the year

18 Prospects for Chinese Investors
Participation as project partners of Philippine PPP Projects in the following areas Engineering, Design and Construction Financing (equity shareholder, lender, insurer, etc) Operation and Maintenance

19 Features of the Philippine PPP Program
There is an established national policy on PPPs (BOT Law) PPPs are allowed in practically all development sectors PPP legal framework allows creativity in PPP financing and contractual arrangements (several PPP variants) PPP legal framework allows procurement options (solicited and unsolicited modes) Institutions (Implementing Agencies and Local Government Units) have distinct legal mandates to enter into PPPs Government support is allowed in critical projects not viable through full private sector financing There is a dedicated PPP Program coordinating agency (PPP Center) formally integrated into the government machinery

20 Information on Philippine PPPs
Overview of the PPP Program Legal Framework PPP Projects for 2011 Rollout Other PPP Projects PPP Process Flow PPP Brochure PPP Sample Contracts PPP Presentations and Speeches Frequently Asked Questions

21 THANK YOU! Public-Private Partnership (PPP) Center
National Economic and Development Authority 4/F GA Yupangco Bldg. 339 Sen.Gil J. Puyat Ave. 1200 Makati City, Philippines Tel. No: (+63 2) Fax No: (+63 2)

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