COSETTE V. CANILAODeputy Executive Director, Philippine PPP Center

International Infrastructure Investment & Cooperation ForumChina International Contractors Association (CHINCA)

25-29 May 20110 , Beijing, China

THE PHILIPPINE PUBLIC-PRIVATE-PARTNERSHIP (PPP) PROGRAM

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

Outline of Presentation

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

The Aquino Administration’s PPP Agenda

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

Private Sector Role in Economic Development

“Three Waves” of Private Sector Participation

1986 - 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); 1990 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.

Expanding Private Sector Role

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)

LEGAL FRAMEWORK

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

INSTITUTIONAL SET-UP

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

The PPP Center

PPP Process PPP Center Intervention

ResponsibleParty

IAs/LGUs

NEDA Secretariat/LGUs

IAs/LGUs

Process

Start

Project Submission to NEDA-ICC

(Complete and qualified documentation)

Project Review & Evaluation

Project Preparation • 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

Assist IAs/LGUs in complying with requirements during the Project & Contract evaluation

PPP ProcessPPP Center Intervention

ResponsibleParty

Investment Coordination

Committee (ICC)NEDA Board

IAs / LGUs

Private Sector

IAs / LGUs

IAs / LGUs

Process

LGU/ICC Approval• ICC Technical Board• ICC Cabinet Committee• NEDA Board

Invitation & Pre-qualification

Preparation and Submission of Bids

Evaluation of Bids

Award & commencement of Implementation

Preparation of Request for Proposals (RFP)

• Per BOT Law IRR, non-voting observer of PBAC for national projects

• Provide advice during procurement process

Monitor implementation

Assist in the preparation of bid Documents

Assist in the evaluation of bids

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

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

PPP Program Updates

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• Implementing Agency: DPWH• Estimated Project Cost: US$ 235.33• Proposed Scheme: Solicited BTO• Expected Bid Date: First half of the year

2011 PPP Projects

NLEX-SLEX Connector Project• Implementing Agency: DPWH• Estimated Project Cost: US$ 477.77M• Proposed Scheme: Unsolicited PPP• Expected Bidding Bid Date: First half of the year

CALA-Manila Side Expressway Project• Implementing Agency: DPWH• Estimated Project Cost: US$ 233.33M• Proposed Scheme: Solicited PPP• Expected Bid Date: Second half of the year

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• Implementing Agency: DOTC• Estimated Project Cost: US$ 71.11M• Proposed Scheme: Solicited PPP• Expected Bid Date: Second half of the year

2011 PPP Projects

New Bohol Airport Development Project • Implementing Agency: DOTC• Estimated Project Cost: US$ 168.89M• Proposed Scheme: Solicited PPP• Expected Bidding Bid Date: Second half of the year

O&M Privatization of Laguindingan Airport Project• Implementing Agency: DOTC• Estimated Project Cost: US$ 33.33M• Proposed Scheme: Solicited PPP• Expected Bid Date: Second half of the year

2011 PPP Projects

LRT Line 2 East Extension Project • Implementing Agency: DOTC• Estimated Project Cost: US$ 251.11M• Proposed Scheme: Solicited PPP• Expected Bidding Bid Date: Second half of the year

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

2011 PPP Projects

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

Prospects for Chinese Investors

• 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

Features of the Philippine PPP Program

Information on Philippine PPPs

www.ppp.gov.ph

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

THANK YOU!

PUBLIC-PRIVATE PARTNERSHIP (PPP) CENTERNational Economic and Development Authority4/F GA Yupangco Bldg.339 Sen.Gil J. Puyat Ave.1200 Makati City, Philippines

Tel. No: (+63 2) 897-6826Fax No: (+63 2) 899-8821www.ppp.gov.ph