Infrastructure News Analysis

Big-ticket projects ready to flow from PPP pipeline

Infrastructural provision is at the heart of developing the Philippines economy. Straddling the industrial, commercial, agricultural and services sectors, the need for efficient transport routes – by road, air and water – is critical right across the economic landscape: from farming to tourism, from shipbuilding to retailing, from food manufacturing to electronics assembly. For these sectors to get off the ground and become competitive within the region, infrastructure has to be put in place – and quickly.

The good news is that the incoming administration of President Rodrigo Duterte is well aware of all this, as it is of the interminable delays created within central and provincial government.

The other good news is that he will have a head start in setting his infrastructure plans in motion: the Philippines PPP Center (which oversees the procurement of projects earmarked for public-private partnership deals) will be handing over what its Executive Director, Andre Palacios, describes as a “robust pipeline” of 50 big-ticket projects – 15 are ready to be awarded within the next few months; 11 are in the process of receiving bids (see Up for bids).

“We have gift-wrapped these projects for the next team,” he told potential investors in the UK last month. Palacios explained that in the first few years of the PPP programme, the take-up was largely by domestic players funded by domestic banks – a trend that has been heavily criticised as favouring local firms and excluding foreign entrants.

That trend, according to Palacios, is now changing as Filipino companies seek overseas partners for the projects. And over the last couple of years French, Australian, Japanese, Spanish and Korean firms have participated.

  • As of May, 12 projects, with a total value of US$4.45 billion, have been awarded since the PPP programme was launched in 2010. President Duterte, we feel sure, will want to pick up that pace considerably.

Up for bids are:

Light rail line. Operation and maintenance of Light Rail Transit Line 2 (LRT-2) which runs from Santolan station in Pasig City to Recto station in Metro Manila. Implementing agencies: Department of Transportation and Communications; Light Rail Transit Authority. Cooperation period: 10-15 years. Project cost: no capex.

Regional prison. Construction and maintenance of a modern prison facility in Fort Magsaysay, Nueva Ecija province. Implementing agency: Department of Justice. Cooperation period: 20 years. Indicative cost: US$1.1 billion. PPP structure: Build, Transfer and Maintain (BTM).

Container port. Development of the existing Davao Sasa Port in Davao City to provide a modern, international-standard container terminal that will improve trade access to Mindanao and the Philippines. Implementing agencies: Department of Transportation and Communications; Philippine Ports Authority. Cooperation period: 30 years. Indicative cost: US$0.42200 billion,  PPP structure: Build, Transfer and Operate (BTO).

Airport. Operation and maintenance of the New Bohol International Airport at Panglao Island that will replace the existing Tagbilaran Airport. Implementing agency: Department of Transportation and Communications; Civil Aviation Authority of the Philippines. Cooperation period: 30 years. Indicative cost: US$0.10156 billion. PPP structure: Operate, Add and Transfer.

Airport. Operation and maintenance of Laguindingan Airport in Northern Mindanao and development of associated infrastructure and facilities to meet international standards. Implementing agency: Department of Transportation and Communications. Cooperation period: 30 years. Indicative cost: US$0.32489 billion. PPP structure: Operate, Add and Transfer.

Airport.  Operation and maintenance of Davao Airport providing expansions to the passenger and cargo terminal buildings, car parking and admin block. Implementing agency: Department of Transportation and Communications. Cooperation period: 30 years. Indicative cost: US$0.90156 billion. PPP structure: Operate, Add and Transfer.

Airport. Operation and maintenance of Bocolod Airport as well as expansion of passenger and cargo terminals, and construction of runway extension, parallel taxiway and apron area. Implementing agency: Department of Transportation and Communications. Cooperation period: 30 years. Indicative cost: US$0.45022 billion. PPP structure: Operate, Add and Transfer.

Airport. Operation and maintenance of Iloilo Airport as well as expansion of passenger and cargo terminals, car parking and admin building and construction of a parallel taxiway. Implementing agency: Implementing agency: Department of Transportation and Communications. Cooperation period: 30 years. Indicative cost: US$0.67556 billion. PPP structure: Operate, Add and Transfer.

Highway and dike: To provide a high standard six-lane highway with a 47-km flood-control dike along Laguna Lake, from Taguig in Metro Manila through the towns of Calamba to the Los Banos-Bay boundary in Laguna. The project includes construction of interchanges, bridges, floodgates, and pumps, from Taguig to Los Banos. Implementing agency: Department of Public Works and Highways. Cooperation period: 37 years (including 7-year construction period). Indicative cost: US$2.72889 billion. PPP structure: Build, Transfer and Operate/Build and Transfer.

IT infrastructure. Upgrade existing Information Technology infrastructure of the Land Transportation and Franchising Regulatory Board (LTFRB) including computerisation of its manual processes, development, supply and operationalisation of its network infrastructure (hardware) and its database and applications (software). Implementing agencies: Department of Transportation and Communications; LTFRB. Cooperation period: 11.5 years (including 1.5 years for the installation, application development and setting-up). Indicative cost: US$0.00663 billion. PPP structure: no information.

IT systems. CRS-ITP2 involves computerisation of the civil registry operations of the Philippine Statistics Authority (PSA) enabling the system to collect, access, store, maintain and manage civil registry documents, produce vital statistics and make the services available nationwide It also includes construction of a building to house the system’s IT servers. Implementing agency: PSA. Cooperation period: no information. Indicative cost: US$0.03527 billion. PPP structure: no information.