Evaluation of Proposed PPP Projects - Microsoft … · Evaluation of Proposed PPP Projects The...
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Evaluation of Proposed PPP Projects The Philippines Investment Forum
September 24, 2019, Fairmont Makati
Millie Jane C. RigoPPP Center
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Presentation Outline
Background of the PPP Program
Legal Framework for PPP Projects
The PPP Center of the Philippines
PPP Project Cycle
Project Evaluation and Approval
PPP Program for Infrastructure Development
4Accelerated
Infrastructure
Development
Financing and Implementation
Delivery Mechanisms
Government Financing General appropriations,
corporate funds
Government Borrowings Domestic & foreign debt,
official development assistance (ODA)
Private Sector FinancingPublic-Private Partnership
(PPP)
Legal Framework for PPP Projects (1/2)
Contractual Arrangements/Modalities:
1. Build-and-Transfer (BT)
2. Build-Lease-and-Transfer (BLT)
3. Build-Operate-and-Transfer (BOT)
4. Build-Own-and-Operate (BOO)
5. Build-Transfer-and-Operate (BTO)
6. Contract-Add-and-Operate (CAO)
7. Develop-Operate-and-Transfer (DOT)
8. Rehabilitate-Operate-and-Transfer (ROT)
9. Rehabilitate-Own-and-Operate (ROO)
10. other variations thereof, as may be approved
by the President
RA 6957 as amended by RA 7718 - An act authorizing the financing, construction,
operation and maintenance of infrastructure projects by the private sector and for
other purposes
Implementing Agencies: any department, bureau, office, commission, authority or agency of
the national government, including Government-Owned and/or -Controlled Corporations
(GOCCs), Government Financial Institutions (GFIs), State Universities and Colleges (SUCs),
and Local Government Units (LGUs) authorized by law or their respective charters to contract for
or undertake Infrastructure or Development Projects
Legal Framework for PPP Projects (2/2)
Own Local Government PPP Code/JV Ordinance:- Department of Interior and Local Government issued MC No. 2016-120 or the
Guidelines for the Implementation of Public-Private Partnership for the People
Initiative for Local Governments (LGU P4). The MC encourages LGUs to
adopt an LGU P4 Code where one of the suggested modalities is JV.
RA 7160 Local Government Code:Joint Venture Agreements
- Section 35 “Local government units may enter into joint ventures and such
other cooperative arrangements with people’s and nongovernmental
organizations to engage in the delivery of certain basic services, capability-
building and livelihood projects, and to develop local enterprises…”
NEDA Joint Venture Guidelines (2008 or 2013)Executive Order No. 423 s. 2005
- LGUs not covered by the guidelines with respect to its local autonomy. However,
LGUs are not precluded from adopting the process stipulated in the
guidelines.
Other rules adopted by LGU (e.g. Provincial PPP Ordinance)
The PPP Center’s Mandate
Policy reforms to enhance
enabling environment
2 Develop
3 Approve
4 Procure
5 Implement
1 Identify
Capacity building of implementing
and oversight agencies
Projects under
BOT Law &
Joint Ventures
Policy, Process, and Projects
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PPP PROJECT DATABASE
Region No. of Projects
Nationwide 8
NCR 22
Luzon 60
Visayas 21
Mindanao 18
TOTAL 129
PPP Projects by
GEOGRAPHIC LOCATION
129 Projects in the Database
• 50 Projects (2010-present)
• 79 Projects (1990-2009)
117/129 (91%) projects validated; ongoing validation / site visits for other projects
PPP Projects by
TYPE OF IMPLEMENTING
AGENCY
27%
27%
46%
LGUs: 35BOT
Variants: 19
JVA: 16
NGAs: 35BOT
Variants: 28
JVA: 7
GOCCs: 59BOT Variants: 40
JVA: 19
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PPP PROJECT DATABASE
PPP Projects by
STATUSPPP Projects by
SECTOR
SectorNo. of
Projects
Transportation 26
Airport 5Port 3Rail 3Terminal 3Roads 12
Education 2
Health 1
Information Technology 11
Power 40
Property Development 22
Tourism 1
Water and Sanitation 24
Solid Waste Management 2
TOTAL 129
43%
12%
8%7%
30%
15 Under
Construction
55 Operational
12 Pre-
Construction
9 Terminated
38 Concluded
129 Projects in the Database
• 50 Projects (2010-present)
• 79 Projects (1990-2009)
117/129 (91%) projects validated; ongoing validation / site visits for other projects
The Project Cycle
2 Develop
3 Approve
4 Procure
5 Implement
1 Identify
Submission by IA to Approving Authority
Evaluation and Endorsement for Approval
Approval by the ICC
Confirmation by the NEDA Board
22 PPP Projects for Approval
• 21 are unsolicited proposals
• 1 is a solicited proposal
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Project Evaluation Parameters (1/3)
Completeness Check
Validity of submitted economic and financial modelsConsistency with other submissionsTraceability of modelsRobustness of the assumptions used
Technical AppraisalDesign parameters, service levels, location, size, timing/
schedule of implementation Interface/alignment with other infrastructure projects
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Project Evaluation Parameters (2/3)
Legal and Institutional AppraisalReview of compliance with applicable laws, rules, and
regulations Review of institutional roles and responsibilities
Socio-economic AppraisalEconomic viability of the project (social discount rate:
10%) Identification and valuation of the project’s economic
costs and benefitsSocial safeguards analysis (environment, gender,
resettlement, etc.)
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Project Evaluation Parameters (3/3)
Financial Appraisal Project CostDemand ForecastWACC, Financial viability and bankability of the project PPP scheme, including required government
undertaking, bid parameterRepayment scheme/ revenue streams (availability
payments, user fees, commercial development and revenues)
Risk analysis – Generic Preferred Risk Allocation Matrix (GPRAM) and contingent liabilities
Value for Money (VfM) Analysis
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Project Evaluation Parameters– Unsolicited Proposals
Same parameters as mentioned above, plus:
Project Eligibility should not be part of the government’s priority list; or new concept or technology in the proposal
Mandatory Provisions in the draft agreement
Proponent Eligibility Legal qualifications Technical qualifications – experience and track record Financial qualifications – ability to raise debt and equity
Review of the Draft Concession Agreement
Reasonable Rate of Return (RROR) and other terms for negotiation
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Common Issues Encountered
Incomplete submission/information
Inconsistent assumptions
Untraceable models
In the case of Unsolicited Proposals:
Direct government subsidy, equity or guaranty
www.ppp.gov.ph
PPPCenter.Philippines
@PPP_Ph
Public-private-partnership-Center-of-the-philippines
PPPPinas
For further information, please visit:
For inquiries, kindly e-mail:[email protected]