Philippines: waving the flag for PPPs

Two years on after new regulations on procurement were passed in the Philippines, the country’s infrastructure landscape, from a public-private partnership (PPP) perspective is offering fertile grounds for foreign investors.

Progress is evidenced by construction projects with a value of more than $955 million which are about to opened to competition, adding to the seven projects worth $1.3 billion which have already been awarded in the four years since President Aquino took office in 2010. The current administration has already brought as much infrastructure investment to the country in four years as Gloria Macapagal-Arroyo’s government did in nine.

Earlier this month, private sector panelists attending the World Bank Infrastructure Investment Summit in Singapore shared their concerns over Asia Pacific governments’ inability to take decisions or define projects clearly enough.

But the Philippine Public-Private Partnerships Center, the coordinating and monitoring agency of the Philippine PPP Programme, has been working overtime to solve these issues.

Standard bearer

This was reflected in the views of panelists including Singapore-based James Harris, a partner at law firm Hogan Lovell Lee & Lee, who has been drafting PPP agreements for 21 years. Despite coming to the conclusion that PPPs “were just not happening in the region” Harris made an exception for the Philippines. It is, in many respects, a standard bearer.

Foremost among the PPP Center’s trophies are two substantial water supply projects, born under the umbrella initiative Invest Water PH, which are almost ready for bidding.

These projects are the Bulacan Bulk Water Supply Project (BBWSP), a $542 million, 30-year contract to build and operate facilities for treated bulk water in Bulacan, an industrialising province north of Manila; and the $417 million New Centennial Water Supply Source Project (NCWSS) which involves constructing a dam north-east of Manila to help ensure water security in the very densely populated and fast growing city.

The private sector will be invited by the Metropolitan Waterworks and Sewerage System to pre-qualify for bids within a month, with awards expected to be delivered by the end of the year.

Two more projects, supporting the country’s railway systems, are also ready for roll-out, with invitations to pre-qualify expected to be issued very shortly.

Impressively, the government has a pipeline of at least 50 more projects. These include the enhancement/development or replacement of six existing airports, the creation of railways and express highways, and the development of a national network of motor vehicle inspection centres.

Indicative dates for the start of bidding processes range from this month to the end of the year. The bidding process lasts on average seven to 11 months, meaning most of these projects should be ready for implementation by the third quarter of next year.

PPP Center director, Eleazar Ricote, attributes success so far to the clear identification of PPP programmes as a national priority, following the recognition that the public sector cannot afford infrastructure projects on their own, as well as agencies’ determination to clearly define PPP projects and choose a specific PPP unit to take the lead on a given project.

Ricote also stresses that investors had been appreciative of efforts to contain corruption with more transparency and governance processes put in place.