Philippine PPP Program SDG-6 (Water & Sanitation) and SDG-11 (Sustainable Cities)
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1 Philippine PPP Program SDG-6 (Water & Sanitation) and SDG-11 (Sustainable Cities) Regional Event on Financing Sustainable Infrastructure Development in Asia and the Pacific UNESCAP - Bangkok 6-7 December
2 In 2014, the Economist Intelligence Unit Infrascope categorized the Philippines as a developed PPP market in terms of PPP readiness, an improvement from its previous grouping in the emerging PPP market category in
3 PPP Program Accelerated Infrastructure Development Financing and Implementation Delivery Mechanisms Government/ local funds Government borrowings PPP 3
4 v Our Vision, Our Ambition Philippine Development Plan Chapter 19: Accelerating Strategic Infrastructure Development Encourage private sector participation Cognizant of the private sector s efficiency and innovativeness, the government will improve its PPP Program as a vehicle for private sector participation in financing where appropriate, the construction, operation and maintenance of infrastructure projects. 4
5 PPP Projects as of Nov Awarded PHP 311 Billion / USD 6.2 Billion* 15 Under Procurement PHP 13 Billion / USD 0.26 Billion 1 Under Review by Implementing Agencies PHP 116 Billion / USD 2.3 Billion 4 For Evaluation & Approval 3 34 PROJECTS PHP 439 Billion (USD 9 Billion) Under Development 11 * Projects started from 2010 onwards (excluding terminated MPOC) and 2 projects developed before 2010 (MRT 7 and Skyway Stage 3) 5
6 Water and Sanitation in the Philippines* 92% of population has access to improved water supply US$ 838 million per year investment requirement to achieve government targets for 2025 for water supply 74% of population has access to improved sanitation facilities US$ 619 million per year investment requirement to achieve universal coverage by 2028 *Based on 2013 Joint Monitoring Programme (JMP) of the World Health Organization (WHO) and UNICEF 6
7 Water and Sanitation in the Philippines* Institutional framework Integrated national planning structure Fragmented implementing agencies: o Metro Manila: national government corporation & 2 private concessionaires o Outside Metro Manila: local government units, water districts (formed as local government corporations) and few private sector operators 7
8 Philippine PPP Program and Projects contributing to SDG 6 PPP Program PPP Projects Formulation of PPP Water Code Enhanced strategy for assistance to local PPPs with water supply and sanitation as priority sectors (project development, capacity building, bundling strategy) Frameworks o Build-Operate-Transfer (BOT) variants pursuant to existing law (BOT Law) o Joint Ventures (JV) with local water districts pursuant to executive guidelines o JVs with local government units pursuant to their local ordinances *These frameworks provide for solicited and unsolicited modes 8
9 Source: World Bank Beyond One- Size-Fits-All: Lessons Learned from Eight Water Utility Public-Private Partnerships in the Philippines 9
10 Bulacan Bulk Water Supply Project Bulacan Province Located adjacent to the north of Metro Manila Main water service providers in the province are 24 water districts with ground water as their main source of water supply Access to Water Supply (out of 500,000 households in Bulacan) 33% 1% 66% Piped water Standalone water points Others Picture source: ADB 10
11 Bulacan Bulk Water Supply Project Supply issues water supply deficit of approx. 90 million liters per day low water pressure depleted groundwater aquifers saline water intrusion Distribution problems aging distribution pipelines high non-revenue water (average of 30%) Increasing demand 11
12 Bulacan Bulk Water Supply Project SCOPE Provision of treated bulk water to 24 water districts Financing, design, construction, operations and maintenance of: Raw water conveyance system and interconnection pipelines Water treatment plants and ancillary facilities Treated water reservoirs Pumping stations COST & REPAYMENT Project cost: PHP 24.4 Billion / USD 480 Million Repayment: concessionaire to collect bulk water charges from water districts Bid parameter: lowest bulk water charge IMPLEMENTATION Concession period: 30 years + 2-year construction period Delivery period: 3 stages in delivery of services to water districts (fixed periods and demand-triggered) 12
13 Bulacan Bulk Water Supply Project PROJECT IMPACT Reduced user fees Winning bid for bulk water charge is approximately 50% less than existing average tariff Replicability Project now serves as model for other water supply projects Status Ongoing construction of water treatment plant and conveyance facilities Target completion date:
14 The Philippines is a highly urbanized country with approximately 50% of its total population residing in urban areas. (Asian Development Bank, 2014) 14
15 Urban Sector in the Philippines* US$ 57 billion Investment requirement ( ) to meet basic urban services 19% 16% Investment Requirements (per sector) 5% 38% Water supply & sanitation Transportation Flood control Waste management 22% Others *Based on ADB Report (2014): Philippine National Urban Assessment 15
16 Philippine PPP Program and Projects contributing to SDG 11 PPP Program PPP Projects PPP Program adapting to sectoral master plans Water supply and sanitation Transportation Flood control Waste management 16
17 Transport-Related Projects Muntinlupa- Cavite Expressway LRT Line 1 Cavite Extension & O&M Southwest Integrated Transport System Awarded Projects NAIA Expressway Phase (II) MRT Line 7 Metro Manila Skyway Stage 3 South Integrated Transport System Cavite-Laguna Expressway NLEx-SLEx Connector Road AutomaticFare Collection System Mactan-Cebu International Airport General principles: Demand risk generally allocated to private sector User-pay principle Regulated fees and adjustment mechanism Performancebased Commercial development rights 17
18 Transport-Related Projects Pipeline of Projects LRT Line 2 O&M LRT Line 6 East-West Rail (unsolicited) PNR South - Commuter Line O&M Integrated Transport System - North Terminal Cebu Bus Rapid Transit (BRT) O&M Metro Manila BRT O&M Bonifacio Global City (BGC) BRT Clark Airport - EPC & O&M (separate procurement) New Manila International Airport (unsolicited) San Ramon Newport Manila Bay (unsolicited) Road Transport IT Infrastructure (Phase II) Motor Vehicle Inspection System 18
19 19
20 PPPCenter.Philippines Thank Public-private-partnershipcenter-of-the-philippines PPPPinas For further information, please visit: For inquiries, kindly 20
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