PPP ORIENTATIONWORKSHOP FOR LOCAL GOVERNMENT UNITS OF WESTERN VISAYAS

Overview of the Activity

PRE-IMPLEMENTATION PHASE PPP AGREEMENT SIGNED PHASE I INTRODUCTION AND INCEPTION
PPP: What and Why Needs Analysis Options Analysis Economic Valuation Policy and Institutional Setup

IMPLEMENTATION PHASE Implementation

PHASE II

PHASE III

PROCUREMENT PLANNING / IDENTIFICATION / AND AWARD Invitation and STRUCTURING / Prequalification APPROVAL
Project Identification & Plan (Pre-FS/FS) Project Preparation/ Structuring Review and Appraisal Processes/ Requirements Procurement Documents Preparation Procurement Plan

Monitoring Evaluation
Construction and Commissioning Contractual Compliance Monitoring and Evaluation Risk Monitoring and Mitigation Project Management Progress Reporting

Transparency and Competitive Requirements Evaluation, Review and Selection Negotiation and Award Processes

Topical Outline of Presentations

PUBLIC PRIVATE PARTNERSHIPS AND THE PHILIPPINE PPP PROGRAM PPP Legal and Institutional Framework The Philippine PPP Center PPP PROJECT PROCESSES AND CYCLE: Sample Projects

PPP Program Updates and Achievements

PPP MONITORING AND EVALUATION Lessons and Challenges

The Role of the Private Sector

Private sector as the states partner in development

Private business as governance actor

Private sector finance, technology and innovation offer efficiency gains that may be too costly for the state Private sector participation can accelerate provision of public services that the state cannot provide/afford on its own Public sector (government) role can be rationalized -focus on social services; allocation of limited resources

for social needs

PUBLIC-PRIVATE PARTNERSHIP CENTER

The Philippine PPP Program

these (PPP) projects promise so much for our economy and for the Filipino, and they (private partners) will play a vital role in our administrations fulfillment of our Social Contract with our people.

The Philippine PPP Program

Took off from the Philippine BOT Program

Towards a more holistic approach to through the following:

Expanded and rationalized mechanisms (management contracts, concessions, joint ventures, etc.) other than BOTs to engage private

sector funding, efficiency and innovation in critical public sector

infrastructure and development requirements Broadened private investment opportunities; Incentives to private sector efficiencies and innovation More creative financing structures, innovative project engineering and structuring techniques

PUBLIC-PRIVATE PARTNERSHIP CENTER

PPP Definition
A range of possible contractual agreement between the Public

(Implementing Agency or Local Government Unit) and private

entities to accelerate provision and/or implementation of infrastructure and/or development projects or services

The partnership provides roles and responsibilities of the parties/partners

There is allocation of rewards/revenues/costs/risks among public and private partners

PUBLIC-PRIVATE PARTNERSHIP CENTER

Advantages of PPPs
Financial (Monetary)
Transfers public sector burden of raising funds to private partner(s)
Facilitates public sector use of limited budget for other urgent (i.e. social) requirements Provides additional sources of revenues for public sector depending on the contractual arrangement Value for Money

Non-Monetary (Efficiency Gains)

Efficient provision of infrastructure/development requirements/services Superior technology and expertise Technology transfer and training for the public sector

PUBLIC-PRIVATE PARTNERSHIP CENTER

Private Sector Returns

Right of Private Partner Collect
private partner is allowed to recover investments through tolls, fees,
rentals and other charges from the users of the PPP project facility

Rate of Return
In general, the BOT Law entitles the private partner to reasonable return to his invested capital. The return should reflect the prevailing cost of capital in domestic and international markets. For negotiated contracts which are public utilities and monopolies, the return is determined by existing laws, which in no case to exceed 12%

on rate base.
PUBLIC-PRIVATE PARTNERSHIP CENTER

General PPP Policies

Minimum government regulations and procedures

PPP projects shall be consumer or end-user oriented

Provision of incentives to private sector Risk sharing and management Consistency of the list of priority projects with PDP and PDPFP and transparency in approval process

Accountability in project implementation

Close coordination between national government and IAs/LGUs
PUBLIC-PRIVATE PARTNERSHIP CENTER

Traditional Funding Modalities vs PPP

Traditional Funding Modalities PPP

Provides limited role of private sector in local infrastructure and development Plan
Provides important services as designed by the public sector without considering the revenue stream Limited coverage to implement local infrastructure and development projects due to availability of funds

Recognizes the essential role of the private sector as main engine for national growth and development
Enhances the provision of services by utilizing the most appropriate technology and expertise which can be transferred to the public Can implement priority infrastructure and development projects without the burden of raising funds Allows public sector to utilize funds for other purposes Faster project implementation and ensured operating efficiency

High probability of absorbing risk by government

Delegation of responsibility and risk between the public and private partners; Less risks on government due to risk-shared allocation Cost ceiling is more on the projects viable revenue stream Flexible financing including use of private capital Ready source of funds during lean periods

Defined cost ceiling for projects Financing option is defined and structured

PPP Modalities
Public Owns and Operates Assets Public-Private Partnership Private Sector Owns and Operates Assets

Utility Restructuring Corporatizati on Decentralizati on

Civil Works Management & Operating Contracts Service Contracts Leases/ Affermage Concessions BOT Projects DBOs

JV/ Partial Divestiture of Public Assets

Full Divestiture

Low Extent of Private Sector Participation

Source: (Delmon , 2010)

High

Typical PPP Modalities

BOT Variants Build-Operate-Transfer (BOT) Build-and-Transfer (BT) Build-Own-Operate (BOO) Build-Lease-Transfer (BLT) Build-Transfer-Operate (BTO) Contract-Add-Operate (CAO) Develop-Operate-and-Transfer (DOT) Rehabilitate-Operate-and-Transfer (ROT) Rehabilitate-Own-Operate (ROO)

Other PPP Modes

Service Contract
Management or Operation and Mgt (O&M) Contract Lease/Affermage Concession Joint Ventures

Types of Contracts

Asset Ownership

Capital Investment

Commerci al Risk

O&M

Duration (Yrs)

Service Contract
Management Contract Lease

Public

Public

Public

Private & Public Private

1-2

Public

Public

Public

3-5

Public

Public

Shared

Private

8-15

Concession

Public

Private

Private

Private

25-30

BOT and Variants

Private & Public

Private

Private

Private

>30

Spectrum of Public and Private Participation

The spectrum of combination of public and private participation, classified according to risk and mode of delivery
100%

100%

Government risk

Private risk

0% Complete government production and delivery Traditional public procurement

0%

PPP

Concessions

Privatization

Source: OECD, PPPs: In pursuit of Risk Sharing and VfM, 2008.

Philippine PPP Legal & Institutional Framework

Legal Framework
1987 Constitution of the Republic of the Philippines

RA 7718: The Amended Build-Operate-Transfer (BOT) Law

BOT-IRR: BOT Laws Implementing Rules and Regulations RA 7160: The Local Government Code of the Philippines 1991 Other Related Laws
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)

PUBLIC-PRIVATE PARTNERSHIP CENTER

Other Related Laws

CA 146, as amended (Public Service Act)
Limits foreign equity to 40% for operation of public utilities

RA 8179 (Foreign Investments Act of 1991)

Provides regulations on foreign exchange transactions

RA 4860 (Foreign Borrowings Act of 1966)

EO 226, as amended (Omnibus Investments Code of 1987)
Provides fiscal incentives

RA 8974 (Acquisition of ROW) RA 7160 DILG (Local Government Code) MC 2011-16 (PPP Sub-Committee in the LDC)
PUBLIC-PRIVATE PARTNERSHIP CENTER

Modes of Procurement
SOLICITED
part of the list of priority projects (identified in the PIP for national projects and the RDIP/PDIP/LDIP for regional, provincial and local projects)

UNSOLICITED
refers to project proposals submitted by the private sector, not in response to a formal solicitation /request issued by an agency/LGU Involves new concept or technology and/or is not part of the list of priority projects No direct government guarantee, subsidy or equity is required

Quantifying NEW Technology for Unsolicited Proposal

A recognized process, design, methodology or

engineering concept which has demonstrated its ability

to significantly
reduce cost in construction, facility maintenance and operations accelerate project execution improve safety enhance project performance extend economic life reduce negative environmental impact or social/economic

disturbances or disruptions
PUBLIC-PRIVATE PARTNERSHIP CENTER

Quantifying NEW Technology for Unsolicited Proposal

A process for which the project proponent or any member of the proponent consortium possesses exclusive rights, either world-wide or regionally A design, methodology or engineering concept for which the proponent or a member of the proponent consortium or association possesses intellectual property rights
PUBLIC-PRIVATE PARTNERSHIP CENTER

Eligible Local Government Unit Projects

Infrastructure Sectors Agriculture and Fisheries Eligible Projects Agricultural produce storage and warehouse facilities; livestock facilities; public fish ports; fish ponds Markets; slaughterhouses; business district development facilities School buildings; dormitories; hostels; student centers

Commercial and Industrial Development Education

Environmental and Solid Waste Management

Solid waste collection equipment; composting plans and facilities; sanitary landfills

Eligible Local Government Unit Projects

Infrastructure Sectors Government Eligible Projects Government Buildings and operation centers Community-based forestry projects Hospitals; heath centers; clinics; lying-in centers; pharmacies and drug stores; animal bite centers Housing projects IT modernization; geospatial resource mapping; cadastral survey for resource accounting and planning

Forestry Health

Housing Information and Communication Technology (ICT) Systems and Facilities

Eligible Local Government Unit Projects

Infrastructure Sectors Land Use Roads and Bridges Social Welfare Eligible Projects Land reclamation and dredging Provincial/city/municipal roads and bridges Day care centers; emergency response units; social welfare distribution centers Transport management and transport terminals Local water supply system; sewerage system; drainage facilities

Transportation

Water and Sanitation

Institutional Set-Up
Contracting Parties/Implementing Agencies
Line Agencies (national agencies) Government Corporations Local Government Units

Other National Agencies Concerned

Line Agencies/ Departments (policymaking)
National Regulatory Bodies Sectoral Regulators (e.g. toll regulatory board)

Review and Approving Bodies

Inter-Agency Investment Coordination Committee Local Government Councils

Coordinating and Monitoring Agency

Public-Private Partnership Center

PUBLIC-PRIVATE PARTNERSHIP CENTER

Approving Authority
Local Projects
PROJECT COST (PhP) 20M > 20M to 50M APPROVING BODY MDC PDC

50M
> 50M to 200M > 200M Final approval

CDC
RDC / RDC for MM ICC Local Sanggunians

PUBLIC-PRIVATE PARTNERSHIP CENTER

Oversight Committees
ICC
Chairman

Review fiscal, monetary & BOP implications of MCPs

Submit MCP status to the President

Review/Evaluate specific MCPs
- technical - financial - economic - social/institutional development - feasibility/viability - sectoral plans/geographical strategies

DOF Secretary
Vice-Chairman

NEDA DG
Members

Exec. Sec. DA DTI DBM BSP

PUBLIC-PRIVATE PARTNERSHIP CENTER

Oversight Committees
INFRACOM
Chairman

Advise the President/NEDA Board on infrastructure development Coordinate activities of agencies involved in infra development

NEDA DG
Vice-Chairman

DPWH Sec.
Members

Exec. Sec. DOTC DOF DBM DOE DOT DA

Recommend to the President policies, programs & projects concerning infra development

PUBLIC-PRIVATE PARTNERSHIP CENTER

Oversight Committees
RDC
Formulate/monitor policy implementation; promote rational resource allocation Clearing house for regional development policy/ program proposals Chairman

NEDA DG
Members

Formulate/Monitor implementation of framework for regional development of PDP

Direct formulation & review guidelines for regional allocation of agency budgetary resources Review viability of regional configuration & recommend region redelineation to the President Review composition, structure & operating mechanism of the RDCs; recommend changes to the President

DBM DILG RDC Chair / Co-Chair 4 RD Experts

PUBLIC-PRIVATE PARTNERSHIP CENTER

Coordinating Office

PPP Center

Executive Director Dep Exec Director

PDS PDMFS CBKMS LS PFES

Conduct project facilitation and assistance to the IAs, GOCCs, LGUs Provide advisory services, technical assistance, trainings and capacity development Recommend plans, policies and implementation guidelines related to PPP in consultation Manage and administer a revolving fund to be known as the Project Development and Monitoring Facility for the preparation of business case, pre-feasibility and feasibility studies and tender documents of PPP programs and projects Monitor and facilitate the implementation of the priority PPP Programs and Projects of the agencies/LGUs Establish and manage a central database system of PPP Programs and Projects Recommend improvements to timelines in processing PPP programs and project proposals, and monitor compliance of all agencies/LGUs

Government Undertakings
Cost Sharing
provision of access infrastructure Right of Way (ROW) Transfer of Ownership/usufruct/possession of land, etc. Partial Financing (50%)

Direct Government Subsidy

Defray/pay/shoulder portion of project cost or expenses in operation or maintenance Condone or postpone payment Contribute property/assets Waive/Grant special rates on real property taxes (LGUs) Waive charges/fees on business permits/licenses
PUBLIC-PRIVATE PARTNERSHIP CENTER

The Philippine PPP CENTER

PPP Center: Mandate and Functions

Executive Order No. 8 (09 September 2010) DTI-BOT Center renamed as PPP Center and transferred from DTI to the National Economic and Development Authority (NEDA) Expanded mandate to cover PPPs, not just BOT and its variants

PUBLIC-PRIVATE PARTNERSHIP CENTER

PPP Center Services

Provide project development advisory services and technical assistance to IAs/LGUs Capacitate and train IAs/LGUs in PPP project preparation and development

Project Development Service

Capacity Building and Knowledge Management Service

Policy Formulation, Evaluation and Monitoring Service

Manage and administer the Project Development and Monitoring Facility (PDMF)

Project Development and Monitoring Facility Service

Monitor PPP Project implementation Advocate policy reforms for efficient PPP implementation

The Role of the PPP Center

Monitor project implementation and contract compliance
Project Preparation

Capacity Development Pre-investment financing (PDMF) Advisory services (legal, technical, financial matters)

Contract Award and Implementation

Project Review and Approval

Participate as non-voting observer of BAC Provide advice during procurement process

PQ & Bid Evaluation

Preparation of Bid Documents

Preparation of PPP transaction documents (bid documents, draft contract, etc)

www.ppp.gov.ph

The PDMF
A revolving pool of funds made available to enhance the

investment environment for PPP and to develop a robust

pipeline of viable and well-prepared PPP infrastructure projects
USD 7M initial contribution from the Philippine Government
USD 6M contribution from the Australian Government (administered by ADB)

USD 9M additional contribution from the Australian Government

(administered by ADB) USD 11.5M counterpart contribution of the Philippine Government
PUBLIC-PRIVATE PARTNERSHIP CENTER

Scope of Services
preparation of project prefeasibility studies (FS) and FS project structuring preparation of bid documents and draft contracts transaction advisory assistance in the tendering process including bid evaluation and award of PPP projects through competitive selection

Pre-investment activities of potential PPP projects of IAs/LGUs/GOCCs, including, but not limited to:

Capacity Building Program

PRE-IMPLEMENTATION PHASE PPP AGREEMENT SIGNED PHASE I INTRODUCTION AND INCEPTION
PPP: What and Why Needs Analysis Options Analysis Economic Valuation Policy and Institutional Setup

IMPLEMENTATION PHASE Implementation

PHASE II

PHASE III

PROCUREMENT PLANNING / IDENTIFICATION / AND AWARD Invitation and STRUCTURING / Prequalification APPROVAL
Project Identification & Plan (Pre-FS/FS) Project Preparation/ Structuring Review and Appraisal Processes/ Requirements Procurement Documents Preparation Procurement Plan

Monitoring Evaluation
Construction and Commissioning Contractual Compliance Monitoring and Evaluation Risk Monitoring and Mitigation Project Management Progress Reporting

Transparency and Competitive Requirements Evaluation, Review and Selection Negotiation and Award Processes

Government Support for PPPs

Project Development Monitoring Facility (PDMF)
IDCA Panel of Firms
CPCS Transcom Ltd. Deloitte Touche Tohmatsu India Pvt. Ltd. Ernst & Young Australia Infrastructure Advisory Hill International SA ICRA Management Consulting Services Ltd. Manabat Sanagustin & Co., CPAs PricewaterhouseCoopers Services LLP Singapore Rebel Group International BV SMEC International Pty Ltd. (SMEC), Australia

Right of way acquisition (ROWA) and related costs (including resettlement) Costs of designing, building and otherwise delivering any part of the project

Strategic Support Fund (SSF)

Government Support for PPPs

Philippine Infrastructure Development Fund (PIDF)
o GFIs pooled funds (GSIS, SSS, DBP, LBP)

Other Financing Avenues for PPP Projects

Private Equity Fund

o Multilateral and government financial institutions

Local Banking Institutions

o 1.3 trillion pesos cash in special deposit accounts

Understanding PPP Project Processes

PPP Process Framework

Development

Project Identification
Contractual Arrangement

Project Preparation

Contractual Considerations

Monitoring and Evaluation

NEDA ICC NEDA BOARD

Approval

Tariff Setting

Independent Regulator

Competition

Bidding/Solicitation of Comparative Proposals

Award/Construction/Development of Facility

Cooperation
Concession/Cooperation Facility Users/Public

Phase 1: Development
PROJECT IDENTIFICATION PPP projects could be identified from the following origins:
Public Planning
Local Development Planning

Strategic Financial Approach

Budgeting and Expenditure Management System Investment Programming and Revenue Generation

Private Initiative (unsolicited proposals)

PUBLIC-PRIVATE PARTNERSHIP CENTER

RDP/RPFP

PROJECT IDENTIFICATION

PDPFP

C/MDP

Impact and Information Base

Factors to be Considered in Selecting Projects for PPP

Commercial sustainability Potential development impact Moderate complexity High operating costs relative to total project costs Other planning and policy inputs based on development plans
PUBLIC-PRIVATE PARTNERSHIP CENTER

Suggested Criteria for PPP project selection

Socio-economic benefits Demand Regional development

Likely financial viability Stakeholder support

Land acquisition
Environmental impacts

Sector Strategy and

plan

Social Safeguards
Risks

Safety aspects

PUBLIC-PRIVATE PARTNERSHIP CENTER

Project Development Cycle

Project Preparation
Pre-Feasibility Study / Business Case / Feasibility Study To appraise:
Project feasibility Commercial viability of PPP / Bankability Value for Money Analysis

To structure the project:

Identify risks

Allocate risks and responsibilities

PUBLIC-PRIVATE PARTNERSHIP CENTER

Project Feasibility
Does the project adhere to the vision, mission, goals and

objectives set out in the local development plan?

Who will implement the project? (mandate, authority, and capacity)

Is there demand for the project? How was this validated

with intended beneficiaries? Does the project comply with proposed standards and specifications for facilities and services? Were all assumptions for the valuation of costs and

revenues reasonable, realistic and acceptable?

PUBLIC-PRIVATE PARTNERSHIP CENTER

Project Feasibility
Were all the development impacts of the projects clearly

identified and properly valued?

What is the extent and impact of the environmental risks and threats of the project to the community and surrounding environment? How we the gender issues identified and addressed in

the project design?

Is the proposed organizational setup responsive to the requirement of the project implementation and

operation?
PUBLIC-PRIVATE PARTNERSHIP CENTER

Phase 2: Approval
PPP Center

Priority Projects under the MTPDP/MTPIP and CIIP

Solicited Proposals (6 months) IAs/GOCCs (Sponsoring Government Units)

Unsolicited Proposals (9 months or more) PROJECT APPROVAL PROCESS

Phase 2: Approval
LOCAL DEVELOPMENT COUNCIL INVESTMENT COORDINATION COMMITTEE
National Projects costing below P300M
National Projects costing above P300M (for NEDA Board approval)
Negotiated Projects regardless of amount (for NEDA Board approval)

NEDA BOARD

Regional Development Council

(local projects costing > P50MP200M)

National Projects costing more than P300M

(upon ICC recommendation)

(local projects costing up to P50M)

City Development Council

Provincial Development Council (local projects costing

> P20M-P50M)

Municipal Development Council (local projects up to

P20M)

Natl. Negotiated Projects regardless of amount

(upon ICC recommendation)

Local Projects costing above P200M

ICC Structure and Membership

NEDA BOARD

ICC CABINET COMMITTEE

ICC TECHNICAL BOARD

NEDA SECRETARIAT

Requirements for ICC Review

Project proposal (based on data not older than 3 years);

ICC Project Evaluation Forms:

PPP PE Form No. 1: General Information PPP PE Form No. 2: Estimated Project Cost PPP PE Form No. 3: Project Revenue PPP PE Form No. 4: Estimated Project Benefits and Costs
PPP PE Form No. 4a: Financial PPP PE Form No. 4b: Economic

PPP PE Form No. 5: Risk Allocation Matrix (see Annex B for the discussion on Risk) PPP PE Form No. 6: Logical Framework PPP PE Form No. 7: Maximum Government Exposure PUBLIC-PRIVATE PARTNERSHIP CENTER

Requirements for ICC Review

Two sets of electronic copies of the economic and financial analyses in traceable formula format based on the submitted PPP PE Forms; Endorsements by head of oversight/mother department; Environmental Impact Statement (EIS)/Environmental Compliance Certificate/Certificate of Non-Coverage;

Department of Finance-Corporate Affairs Group (DOF-CAG) review for GOCC

projects; Location map; Right-of-way (ROW) acquisition and resettlement action plan; RDC endorsements (prior to notice of award); Department of Budget and Management (DBM) certification of budget cover availability for Government of the Philippines (GOP) counterpart (prior to NEDA Board confirmation of ICC approval)

PUBLIC-PRIVATE PARTNERSHIP CENTER

Phase 3: Competition
Pre-qualification Qualification Procedure
Solicited Proposals (6 months)

Unsolicited Proposals (9 months or more)

IAs/GOCCs evaluate project proposal Approving body to recommend Rate of Return (ROR) Negotiation and Contract Approval

Phase 3: Competition
Bidding procedures
Pre-qualification Qualification Procedure
Solicited Proposals (6 months)

Unsolicited Proposals (9 months or more)

IAs/GOCCs evaluate project proposal Approving body to recommend Rate of Return (ROR) Negotiation and Contract Approval

Bidding Process Under RA 7718 (BOT Law)

Project ID and Preparation (90)
Approval of Project by Appropriate Body (30)

Advertiseme nt/ Invitation to PQ and Bid (21)

Preparation of PQ Docs (30- 45)

Approval of Contract of Award (14)

Bid Submission Bid Evaluation

Technical (30) Financial (15)

Issuance of RFP / Bid Preparation (30 / 60120) Prepare the Bid (90 / 120)

PQ of Bidders (30)

Issuance of NOA (7)

Receipt and Compliance with NOA (30)

Execution of Contract (14)

Issuance of NTCI (7) Contract Implementati on

Legend: Blue Government Red Private Sector

1. All days herein are Calendar Days (cd). 2. Maximum No of CD = 453-indefinite 3. Minimum No of CD = 256

Sample LGU PPP Projects

Government Administrative Center Shopping Center and Public Market Water System

Shopping Center and Public Market

Project Specifications and Design

Project Description
Name of Project: Shopping Center and Public Market Land Area: Approximately 1.0- 1.5 hectares Implementor: LGU Private Investor: Name of the Company Proposed PPP Scheme: Build-OperateTransfer or Build-Transfer-Operate
PUBLIC-PRIVATE PARTNERSHIP CENTER

Project Description
a commercial shopping center building (which is mainly of interest to the investor), a public market (which is mainly of interest to the LGU), and a parking lot and open spaces (needed to support both).

The project will have three components:

PUBLIC-PRIVATE PARTNERSHIP CENTER

Project Financing
The private sector proponent is responsible for raising capital for the construction of the entire complex, including all miscellaneous expenses

that may be incurred as a result of this project.

The LGUs main contribution to this partnership is the land on which the complex will be built.

PUBLIC-PRIVATE PARTNERSHIP CENTER

Preconditions for Successful Tender

Existence of an Available Site Local Support: Sanggunian Endorsement, tax incentives etc. Adequate Consumer Base to Support a Shopping Center

Absence of Competition from other Centers

Favorable Market Conditions
PUBLIC-PRIVATE PARTNERSHIP CENTER

Government Center
Project Specifications and Design

Project Description
Name of Project: Government Administrative Center Land Area: 6,000 square meters Implementing Agency: National Food Authority Private Partner: Real Estate Developer Proposed PPP Scheme: Build, Lease, and Transfer (BLT)

Building and Model Design

Office Modules: (permits natural lighting and ventilations), 350-525 Employees Specialized Functions Module: Electronic Data Processing, Telecommunications, Records Keeping and Storage, and Training and Seminar Facilities Circulation/Utilities Core: Main Lobby, Elevator Lobbies, Elevators, Main Stairs, Toilets and Utility Rooms

Building and Model Design

Vehicular Parking and Open Spaces: Parking Space for 45-50 Vehicles, Landscape and Future Expansions Smart Building: electrical raceways, access-floor system, computer network, fiber optics, communication lines, interior environment control

Building and Model Design

Efficiency = Rentable Space: Total Space Average Efficiency 70%-85% 4,740 sq. m. leasable space Building can accommodate an average of 475 to 700 employees

Figure 3-7: Government Administrative Center Perspective

Figure 3-8: Government Administrative Center Conceptual Site Plan, Vehicular Circulation

Figure 3-9: Government Administrative Center Conceptual Floor Plan, Pedestrian Circulation

Figure 3-10: Government Administrative Center Conceptual Section, Pedestrian Circulation

LGU Water Supply System

Project Specifications and Design

Project Description
Nature of Project: Water Source Development, Treatment and Distribution Land and Bldg. Requirements: Land for 10 deep wells and a 5,000 sq. m. administration and maintenance center, storage tanks, distribution system and 20,000 service connections Implementor: LGU Private Partner: Contractor with experience in water supply backed by a reputable financing institution or individual Proposed PPP Scheme: Build-OperateTransfer

Project Description
A water supply and distribution system with 20,000 service connections for an LGU with a population of 100,000 Water will be sourced from 10 deep wells The distribution system consists of:
four 500 cubic meter capacity storage tanks, 50,000 meters of distribution system mains and laterals, and 20,000 metered service connections (plus fire hydrants for the city center).

Project Description
Project Financing The private sector is responsible for raising all financing required for the construction, operation, and maintenance of the facility. The LGU contributes the land required for wells, distribution lines and buildings. Sources of Revenue Project revenues will come from water sales, connection fees, and other water related charges.

Preconditions for Successful Tender

Land Availability and Right of Way Private Sector Capability Willingness to Pay for Services and Support of the LGU Sufficient Household Clustering Availability of a Good Water Source

Updates and Achievements

The Philippine PPP Program

PPP Achievements
INSTITUTIONAL STRENGTHENING
Reorganization of the PPP Center Capacity Building of PPP Units of Implementing Agencies Improved inter-agency coordination and involvement

ENHANCED LEGAL AND REGULATORY FRAMEWORKS

BOT Law and its amended Implementing Rules and Regulations Executive Order on Arbitration and Dispute Resolution Reviewed and streamlined processes in evaluation and approval of projects

CONSULTATIVE AND SYSTEMATIZED PARTNERSHIPS

Dialogues and consultative meetings with foreign and local private investors, banks, development partners, foreign trade missions, and other stakeholders

PPP Achievements
PPP-ENABLED IMPLEMENTING AGENCIES AND LOCAL GOVERNMENT UNITS
Capacitated over 350 IAs and LGUs in PPP project preparation in less than a year Successful launch of the LGU PPP Manual Vols. 1-3; regional training roll-out ongoing DILG-PPP Center Memorandum of Agreement on PPP Capacity Building for local government units Partnerships with various institutions to conduct relevant capacity building interventions on PPP

PIPELINE BUILD-UP AND ROLLOUT OF PROPERLY PREPARED PROJECTS

14 PPP projects approved for PDMF support (total of USD 16M earmarked for pre-investment and other transaction advisory support) Successful tender of the DPWHs Daang Hari-SLEX Link Road project; bidding for DepEds PPP for School Infrastructure Project, LRT Line 1 Cavite Extension, and NAIA Expressway Phase II Project ongoing

2012 Thrusts & Priorities

Legal and Policy Framework Enhancements
PPP Law BOT Law amendments under Congress deliberations (both Houses) Amendments to E.O. No. 8 Endorsed to the Office of the President Executive Order: Rules on Arbitration and Dispute Resolution Published last 09 July, 2012 JV Guidelines for GOCCs Policy briefs (project selection, identification, and prioritization; viability gap funding; unsolicited proposals; etc.) being developed BOT Law revised IRR Published last 20 July 2012 in the PDI; filed last 27 July 2012 at the UP Law Center; and took effect last 4 August 2012

Establishment of Template LGU Assistance on PPP

Standard technical assistance (TA) for LGUs being developed through two live PPP projects TA on LGU project screening being considered

2012 Thrusts & Priorities

Contract Management/ Performance Management
Policy Briefs on monitoring and evaluation & contract management being prepared through ADB TA

Capacity Building for IAs and LGUs

Ongoing arrangements with DAP National Government Career Executive Service Development Program (NGCESDP) and Graduate School for Public Management and Development for the creation of a PPP sub module/ course in their respective curricula Ongoing discussion with DILG on capacity development interventions for LGUs (e.g. Trainers Training for designated PPP officers) PPP Training Program on water districts being developed PPP Training Program on SUCs being developed

2012 Thrusts & Priorities

Creation of the PPP Knowledge Portal
Planned/proposed content being finalized under the ADB TA Website content currently being improved

PPP Pipeline Build-up

At least 8 PPP projects in the pipeline may be rolled out this year

Pipeline of PPP Projects

LGU PROJECTS EDUCATION
1 project | USD 233M 2 projects | TBD

TRANSPORTATION
8 projects | USD 1.88B

AGRICULTURE
3 projects | USD 186.9M

HEALTH SECTOR
2 projects | USD 126M

WATER SECTOR
3 projects | USD 1.08B

ROAD NETWORK
3 projects | USD 1.29B

TOTAL PROJECT COST: USD 4.80B*

*Project Costs of O&M of LRT-2, O&M of Puerto Princesa, ITS= TBD

STATUS OF PPP PROJECTS as of August 16

*Approved PDMF Support

*Approved PDMF Support

LGU Projects in the Pipeline

Talisay City Plaza Complex Heritage Restoration and Redevelopment Project Talisay City, Negros Occidental El Nido Solid and Liquid Waste Management Facility El Nido, Palawan

PUBLIC-PRIVATE PARTNERSHIP CENTER

PPP Monitoring and Evaluation Forms

Philippines PPP M&E Network

A system of M&E tools used to determine whether the Philippine PPP

initiative is delivering the result it has committed to deliver, i.e. to

increase investments in quality PPP projects in the Philippines The M&E system is comprised by:
Project level reports
Quarterly project supervision report (PSR) Project completion report (PCR) Periodic project evaluation reports Periodic rapid project evaluation reports

Annual report Program / thematic evaluation reports

The M&E System is implemented by the PPP Center and the national

PPP M&E network

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Institutional Framework

IAs/ LGUs

PPP Center

Monitoring of PPP Projects

Two-tier mechanism for monitoring the performance of PPP projects

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Tools, Methods, Approaches

Reporting Field Visits / Site Inspections

Surveys
Interviews

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Coverage of the M&E

All PPP projects undertaken by Implementing Agencies and LGUs

including all the variants or

arrangements under the BOT Law and

its IRR

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Monitoring and the PPP Project Cycle

PreConstruction Phase compliance of conditions precedent DED Plans permits and approvals Clearances Financial Closure Construction Phase

O&M Phase

Asset Transferring

work schedule resource utilization financing plan performance security testing

compliance with all operations and maintenance parameters and performance indicators

preparation for asset transfer termination of contract Compliance with prescribed standards and specifications

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Responsibilities of the IAs/LGUs

Creation of a monitoring unit at the project level Preparation of work plan and schedule Submission of monitoring reports and other

project documents
Conduct of regular project field visits/inspections

Coordination with the project proponent

Conduct of regular meetings

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Responsibilities of the PPP Center

Preparation of work plan and schedule Review of submitted monitoring reports and other project documents

Conduct of regular project field visits/inspections

Coordination/Establish linkage with IAs/LGUs

Conduct of stakeholders meetings

Preparation of quarterly/annual status reports of PPP projects
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Project Status Report (PSR)

For: On-going PPP projects

Track the progress of projects under construction such as the TPLEX

Ensure proper construction and maintenance of operational projects such as the MRT 3, MWSS Privatization Project Frequency of Submission: Every quarter to PPP Center Deadline of Submission: Within a month after every quarter
1st Q Report due in April, 2nd Q Report due in July

Major Parts: Project Profile Project Status Documents Submitted PUBLIC-PRIVATE PARTNERSHIP CENTER

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Lessons and Challenges

Properly Structured PPP

Ameliorates/satisfies lenders concerns Recognizes that projects must be profitable Recognizes that PPPs are primarily financing

constructs, not an engineering proposition

Has some form of government support

Reflects proper unbundling

Has a reasonable risk sharing arrangement Has a solid legal/contractual structure
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Key Success Factors

Well-structured Competitive Project

Transparent process that can stand scrutiny

Selection of a Competent Private Partner

Credible and Capable Institutions

Presence of Champions

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PPP Challenges
PPPs are long-term contracts

PPPs do not achieve absolute risk

transfer PPP procurement may be long and costly Private sector subject to higher cost of capital Perceived loss of public sector control
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Key Success Factors

Well-structured Competitive Project Transparent process that can stand scrutiny Selection of a Competent Private Partner

Credible and Capable Institutions

Presence of Champions

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PPP WORKSHOP
Initial Project Preparation

Mechanics and Instructions

Grouping (5 mins)
Grouping (per LGU) based on existing project concepts/notes Designation of lead person/presentor

Group Review of the Project at hand in terms of: (30 mins)

Consistency with Regional/Provincial Plans/Priorities Projects PPP Option Contracting Party mandate and authority Role of other LGUs or agencies concerned Initial viability indicators Possible PPP Structure/Arrangement Assistance needed from PPP Center

Group Presentation/Discussion (10 mins per group)

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Guide Questions
Is the project consistent or aligned with Regional/Provincial priorities? Is there any previous effort or initiative on the project? Studies already prepared? What is the status? How does the concerned LGU plan to proceed? Why the PPP option? Why not ODA or through GAA? Which LGU shall serve as contracting party? Will the project involve any other LGU or agency? Has there been any legal action (local resolution, MOA, etc) already initiated between and among them?
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Guide Questions
What are the projects (initial) viability indicators? - Project revenue streams? Other sources of repayment mechanisms? - Basic project design? Economic benefits? - Other considerations environmental, social considerations, etc. What is the proposed PPP Structure (Concession, MC, BOT, etc)? Briefly outline roles/responsibilities of public sector (LGU) and private partner What will the LGU be willing and able to bring into the project? What risks (responsibilities and costs) it is willing and can bear under the partnership? What form of assistance is needed from PPP Center? (Additional Training, PDMF Support, Technical Assistance, etc.). Will this entail drafting of a new FS or an update of an existing FS? What is the indicative amount of assistance needed?

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THANK YOU
www.ppp.gov.ph

Module 2 for LGUs

Sub-module 1: Project Management
Understanding the Project Management Concept including project lifecycle Assess the effectiveness of a Project Management Plan Learn to identify and manage project risks and issues Define progress monitoring and reporting requirements for PPP programs and projects

Sub-module 2: Business Case Development and Fundamentals

Equipping LGU financial planners with the capacity to develop robust, comprehensive and relevant business case intended to assess the viability of a certain project Enhancing the capability of LGU officials in planning, facilitating and controlling PPP Programs and Projects

This training aims to enable participants to:

Develop an effective Project Management Plan Identify and manage project risks and issues Define progress monitoring and reporting requirements for PPP Programs and projects

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