It’s back to center stage for PPP

AT least five multibillion-peso deals under the Public-Private Partnership (PPP) Program are expected to take center stage in 2018, as the government tries to accelerate infrastructure development via private-sector funding next year.

Ferdinand A. Pecson, who sits as executive director at the PPP Center, said his office has identified several projects that could “probably” be rolled out throughout 2018.

These, he said, include unsolicited proposals that require competitive-challenge mechanisms before being implemented.

“The PPP Center continues on its commitment to fast-track the delivery of quality infrastructure via three main strategies: pipeline development, focus on local PPPs, and implementation and monitoring,” he said.

PPP Director Lawrence G. Velasco listed the five projects as the operations and maintenance of the Clark International Airport, the San Ramon New Port, the East-West Railway, the Manila Bay Flood Control and the New Manila Airport.

The last three are unsolicited proposals from various players in the private sector. They are currently in the Investment Coordination Committee (ICC) of the National Economic and Development Authority (Neda).

“The unsolicited proposals are in the ICC level. They will seek the approval of the ICC and then go through negotiation, then Swiss Challenge—that is something that we will do next year,” Velasco said.

East West Rail Transit Corp. submitted early this year its proposal for the financing, design, construction, operation and maintenance of the East-West Rail, a mostly elevated 9.4-kilometer railway line from Diliman, Quezon City to Lerma, Manila.

It is envisioned to have 11 stations and provide interconnecting facilities with neighboring rail systems.

San Miguel Corp., on the other hand, submitted the unsolicited proposal for the P339-billion Manila Bay Flood Control deal, which involves the construction of a coastal sea barrier through the northern part of Manila Bay covering the coastal areas of Bulacan, Pampanga and Bataan.

It also has an expressway component that aims to connect Bataan with Metro Manila, providing direct access to the provinces of Bulacan and Pampanga.

The food-to-infrastructure conglomerate is also the proponent for the New Manila Airport deal. It involves the construction of a $10-billion, 1,600-hectare international gateway somewhere in the south of Metro Manila.

The airport, which would have doubled the capacity of the Ninoy Aquino International Airport (Naia), would have included the construction of a low-cost carrier terminal, a train system and a dedicated tollway.

“It all hinges on the proponents being able to comply as to what the ICC is asking them to submit. It is a matter of them complying,” Pecson said.

Solicited deals

“On the solicited front, one project we are excited about is the San Ramon New Port Project. The feasibility study of that project is something that we’ll finish by January,” Velasco said.

The port deal involves the construction and operations and maintenance of a seaport that will help decongest the existing Zamboanga Port, and further uplift trade within the Southeast Asian region.

“One thing that’s in the pipeline is the operations and maintenance of the Clark airport and that is something that the BCDA [Bases Conversion and Development Authority] is eager to have rolled out by next year,” Velasco added.

The project involves the operations and maintenance of the existing and the proposed new passenger terminal buildings of the Clark International Airport.

Currently, there are 15 projects in the PPP pipeline. This is a staggering decline from the 53 deals that the current administration inherited from its predecessor.

The Duterte administration took an apparent shift in bias toward developmental financing from private sector-led funding on infrastructure development, which was the cornerstone infrastructure-development program of the previous administration.

Aside from pronouncements from different economic managers, government data will prove that it has indeed changed its preference on project financing toward official development assistance and state coffers.

This does not mean that the projects were awarded to their respective winners, but most of them were simply snatched from the pipeline, and was added to the Duterte government’s “Build, Build, Build” (BBB) program.

Touted as the government’s “most ambitious infrastructure plan,” the BBB program lists 70 priority infrastructure projects that are seen to solve the infrastructure crisis that the Philippines faces today.

The new infrastructure thrust was born out of President Duterte’s policy on increased infrastructure spending, an avenue wherein the previous administration failed miserably with underspending plaguing government agencies tasked to develop crucial infrastructure, such as roads, rails and ports.

The majority of the projects under the newly minted program—roughly 39 of 70 deals—were contracts either signed, implemented and started during the administration of President Benigno S. Aquino III, according to estimates made by the BusinessMirror.

Likewise, a thorough analysis of the project pipeline under the BBB program would show that in terms of financing options, a majority of the projects will be funded by the General Appropriations Act (GAA). This is followed by ODA grants and loans, and private-sector funding comes in last.

Former PPP chiefs, economists and representatives from business chambers agree that the current government must ride on the momentum built by the previous administration on the PPP Program.

The impact of the program to the local and national economy can be clearly seen in the four completed and operational projects, with a total project cost of P31.77 billion, as follows: the Muntinlupa-Cavite Expressway Project, the PPP for School Infrastructure Project Phase I, the Automatic Fare Collection System Project and the Naia Expressway Phase II Project.

Aside from the completed projects, the 11 other ongoing awarded projects, which include the Metro Manila Skyway Stage 3, Mactan-Cebu International Airport New Passenger Terminal Project, PPP for School Infrastructure Phase II and Metro Rail Transit (MRT) Line 7 are expected to provide significant contributions to the economy.

LGU-led projects 

Aside from national projects, the PPP Center will also be busy with the rollout of deals in the local level, Velasco said.

“We still have local government projects. One that’s very imminent is the Baggao Water Supply Project in Cagayan. We are confident that, as we speak, we are talking about the schedule for its procurement,” he said.

Other deals include the Solid Waste Management Project in Cebu City, the Cagayan de Oro Water District Septage and Sanitation Project, and the Los Baños Public Market Project.

Image credits: Boscorelli | Dreamstime.com

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