Philippines kicks off $1bn of PPPs

President Benigno S. Aquino III launched five public-private partnership deals yesterday, including toll roads and light rail projects. The first tenders should come to market this month.

The Philippines government kicked off its public-private partnership (PPP) programme yesterday with the launch of five projects worth a combined $1 billion.

The projects include three toll roads and two light rail deals. The first tenders will be for the light rail projects and are expected to be published by the end of this month. The toll road deals should be rolled out steadily throughout the first half of the year.

President Benigno S. Aquino III presided over the ceremony, which also included the opening of the country’s PPP Centre, located in the Development Bank of the Philippines building, in Makati City. The PPP Centre will assist the different government bodies with the implementation of the PPP programme.

It will also manage the $7 million Project Development and Monitoring Facility, which will provide early stage funding to help prepare and make PPP projects bankable, the government said.

The first projects to come to market will be LRT 1, the first line of the Manila Light Rail Transit System, and the Metro Rail Transit, or MRT 3. The former is a 17-kilometre stretch of Manila’s metropolitan rail system, serving some 409,000 passengers per day. MRT 3 is the third rapid transit line in the Manila metropolitan area, running along 17 kilometres of track and serving some 400,000 passengers every day.

The government intends to privatise the operation and maintenance of the two lines for an interim period of three to four years. After this period, the contractor responsible for the southward extension of LRT 1 is expected to take over management of the two lines. The tenders will be worth a combined $311 million – $140 million for MRT 3 and $171 million for LRT 1.

Following the light rail deals, the government will launch a $35 million tender for the construction of the Daang Hari-SLEX toll road, a 3.7 kilometre, four-lane road linking Bacoor, in the province of Cavite, to the South Louzon Expressway, in the Manila metropolitan area.

May will see bidding open for the $235 million contract to develop the NAIA Expressway Phase 2, which will connect two highways in the Manila region to the Manila International Airport. The last project to come to market – the $477 million NLEX-SLEX Connector, expected in June – will require the private sector to build a 13-kilometre, four-lane elevated expressway, designed to decongest Manila’s industrial belt and provide better access to its ports.

In a bid to woo investors, the government has pledged to protect them against regulatory risk, stating that it has set aside a contingent liability facility in case regulatory changes jeopardise the cash flows agreed in the concession contracts.