Presentation on theme: "The Philippine Public-Private-Partnership (PPP) Program"— Presentation transcript:
1 The Philippine Public-Private-Partnership (PPP) Program International Infrastructure Investment & Cooperation ForumChina International Contractors Association (CHINCA)25-29 May , Beijing, ChinaThe Philippine Public-Private-Partnership (PPP) ProgramCOSETTE V. CANILAODeputy Executive Director, Philippine PPP Center
2 Outline of Presentation The Aquino Administration’s PPP ProgramPrivate Sector Role in Phil Socio-Economic DevelopmentThe Expanding Scope of Private Sector RoleLegal FrameworkInstitutional and Regulatory Set-UpThe PPP Center and its ServicesPPP ProcessPPP DevelopmentsPriority Projects for 2011Prospects for Chinese PartnersSummary
3 The Aquino Administration’s PPP Agenda A Social Contract with the Filipino PeopleCommitment that all transactions are transparent & above boardConsultative 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, IIIPresident 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 governmentPolicy environment supports private sector’s critical rolestructural adjustments policies - privatization, deregulation and liberalizationmarket-based tariff setting; broad range of government support; various mechanisms for public-private partnershipseconomic agenda to harness private sector financing and efficiencyThe 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 ParticipationDisposition/Sale of Assets through the Asset Privatization Trust (APT) and the Committee on PrivatizationLate 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) PhaseThe PPP PhaseExpanded range of private sector engagements – Management Contracts, Lease, BOTs, JVs, Concessions, other variantsPPPs in traditional (transportation, water, etc) and non-traditional infrastructure (ICT, health, education, etc) sectorsMixed 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-UPContracting Parties (enters into PPP/BOT Agreement)Implementing Agencies (national agencies)Government CorporationsLocal Government Units (Province, City, Municipality)Other National Agencies ConcernedLine 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 BodiesInter-Agency Investment Coordination CommitteeLocal Government CouncilsCoordinating and Monitoring AgencyThe PPP Center
8 The PPP CenterPres. Aquino signed Executive Order No. 8 (09 September 2010)BOT Center renamed PPP Center and transferred attachment from DTI to NEDAExpanded mandatecovers all arrangements under the BOT Law, Joint Venture arrangements, and other PPP arrangementsPromote the PPP ProgramFacilitate development of PPP ProjectsAdvocate policy reformsMonitor PPP implementationBy 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 developmentRecommend plans and policies related to PPP in consultation with appropriate agencies/LGUsManage and administer the Project Development and Monitoring Facility (PDMF Fund)Monitor and facilitate implementation of priority PPP projects of agencies/LGUsTo 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 PreparationIAs/LGUsFund pre-investment activities through the PDMFProvide Training & Capacity DevelopmentProvide technical assistance in the review of the Project’s financial and economic viabilitiesProvide legal advice during formulation of the contractProject Submission toNEDA-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/LGUsProject Review & EvaluationNEDA Secretariat/LGUsAssist IAs/LGUs in complying with requirements during the Project & Contract evaluation
10 PPP Process Process Responsible Party PPP Center Intervention LGU/ICC ApprovalICC Technical BoardICC Cabinet CommitteeNEDA BoardInvestment Coordination Committee (ICC)NEDA BoardPreparation of Request for Proposals (RFP)Assist in the preparation of bid DocumentsInvitation & Pre-qualificationIAs / LGUsPer BOT Law IRR, non-voting observer of PBAC for national projectsProvide advice during procurement processPreparation andSubmission of BidsPrivate SectorEvaluation of BidsIAs / LGUsAssist in the evaluation of bidsAward & commencement of ImplementationIAs / LGUsMonitor implementation
11 PPP Program Updates2011 PPP Projects in the Roll-Out launched in November 2010 and February 2011First five (5) projects to be bid in the first half of the yearNext five (5) projects to be bid in the second half of the yearProjects in the roll-out are mostly transportation projectsAmendment of the BOT Law and its IRR under wayPublic hearing ongoingCollaborative efforts with government PPP stakeholders initiated
12 PPP Program UpdatesCapacity development for government PPP stakeholdersTo ensure reliable Pre-FS/FS outputTo equip efficient evaluation and approval of projectsProject Development and Monitoring Facility beefed upTo help finance Pre-FS/FSTo ensure high success rate
13 2011 PPP Projects DaangHari – SLEX Link Project Implementing Agency: DPWHEstimated Project Cost: US$ 35.5MProposed Scheme: Solicited BTOExpected Bidding Bid Date: First half of the yearNAIA Expressway Phase 2 ProjectEstimated Project Cost: US$Expected Bid Date: First half of the yearThe projects under the PPP Program were selected based on the following criteria:1. Project Readiness/Preparationa. For 2011 Rollouti. Feasibility Study to be completed within 2010 to 2011,ii. Completed Feasibility Study being reconfigured for PPP, andiii. Ready to tender in 2011.b. For Medium-Term Rollout and other PPP Projectsi. Included in the PPP pipeline projects of the Implementing Agencies, andii. Initial preparation on-going, i.e., concept stage, hiring of consultants for Feasibility Study preparation.2. Responsiveness to the sector’s needs (e.g., part of the transport network system,water supply/sewerage, electric power capacity, etc); and3. High Implementability (bankable, no major issues).
14 2011 PPP Projects NLEX-SLEX Connector Project Implementing Agency: DPWHEstimated Project Cost: US$ MProposed Scheme: Unsolicited PPPExpected Bidding Bid Date: First half of the yearCALA-Manila Side Expressway ProjectEstimated Project Cost: US$ MProposed Scheme: Solicited PPPExpected Bid Date: Second half of the year
15 2011 PPP Projects Puerto Princesa Airport Development Project Implementing Agency: DOTCEstimated Project Cost: US$ 97.78MProposed Scheme: Solicited PPPExpected Bidding Bid Date: Second half of the yearNew Legaspi Airport Development ProjectEstimated Project Cost: US$ 71.11MExpected Bid Date: Second half of the year
16 2011 PPP Projects New Bohol Airport Development Project Implementing Agency: DOTCEstimated Project Cost: US$ MProposed Scheme: Solicited PPPExpected Bidding Bid Date: Second half of the yearO&M Privatization of Laguindingan Airport ProjectEstimated Project Cost: US$ 33.33MExpected Bid Date: Second half of the year
17 2011 PPP Projects LRT Line 2 East Extension Project Implementing Agency: DOTCEstimated Project Cost: US$ MProposed Scheme: Solicited PPPExpected Bidding Bid Date: Second half of the yearLRT Line 1 South Extension ProjectEstimated Project Cost: US$ 1,555.55MExpected Bid Date: Second half of the year
18 Prospects for Chinese Investors Participation as project partners of Philippine PPP Projects in the following areasEngineering, Design and ConstructionFinancing (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 sectorsPPP 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 PPPsGovernment support is allowed in critical projects not viable through full private sector financingThere is a dedicated PPP Program coordinating agency (PPP Center) formally integrated into the government machinery
20 Information on Philippine PPPs Overview of the PPP ProgramLegal FrameworkPPP Projects for 2011 RolloutOther PPP ProjectsPPP Process FlowPPP BrochurePPP Sample ContractsPPP Presentations and SpeechesFrequently Asked Questions
21 THANK YOU! Public-Private Partnership (PPP) Center National Economic and Development Authority4/F GA Yupangco Bldg.339 Sen.Gil J. Puyat Ave.1200 Makati City, PhilippinesTel. No: (+63 2)Fax No: (+63 2)