Its Prospects for ISA Projects in Municipality of Bauang ... · System, and the NLEX-SLEX Connector...

BORDABremen Overseas Research

and Development Association

Philippine PPP Program:Its Prospects for

ISA Projects

in

Municipality of Bauang

Province of La Union

Presented By

Engr. Jonas Emmanuel L. Maronilla

Managing Director, Basic Needs Services Phils. Inc.

Country Representative, BORDA


and Development AssociationPresentation Outline

• PPP Program/agenda

• Legal Framework & Institutional Set

Up

• Completed, on-going and pipeline

PPP Projects including sanitation

• PPP financing for ISA in Bauang, L.U.

• Financing scheme

• User fee options

• Repayment to private investor


and Development AssociationWhat is PPP?

• Contractual

arrangement

between government

and private sector to

deliver public

infrastructure

and/or public

services

•



The Philippine PPP Program

Inclusive Growth

Accelerate Infrastructure Development

PPP Center as Champion

for PPP

Private Sector as Partner in

Development



Roles of Private Sector

PrivateSector

Serves as State’s Development Partner

Offers efficiency gains in

technology & innovation

Can finance, design, construct & operate facility, in exchange can collect user fee


and Development AssociationEligible PPP ProjectsEconomic

Infrastructure

Social Infrastructure Others

• Highways & Roads • Agriculture • ICT Systems & Facilities

• Railroad & Railways • Canals, dams, irrigation • Industrial & Tourism

Estates

• Ports • Education Facilities • Markets, warehouses,

slaughterhouses

• Airports • Health Facililies • Housing & Government

Buildings

• Transport System • Prison Facilities • Climate Change

• Mitigation/ adaptation

Infrastructure

• Water Supply

• Land Reclamation

• Solid Waste

Management


and Development AssociationSample PPP ProjectsCompleted On-going

implementation

Pipeline

• Muntinlupa-Cavite

Expressway

• NAIA Expressway

• Automated Fare

Collection System

• Mactan-Cebu

International Airport’s

new passenger

terminal MRT-7

• Metro Manila Skyway

Stage 3

• Southwest Integrated

Transport System

• LRT Line 1 Cavite

Extension, the Cavite

Laguna Expressway,

South Integrated Transport

System, and the NLEX-

SLEX Connector Road.

• School buildings

and infrastructure

project, erecting

9,266 classrooms

in Ilocos, Central

Luzon, and

Calabarzon

• Computerization of the

Civil Registry System of

the Philippine Statistics

Authority

• Regional airports in

Davao, Iloilo,

Laguindingan in Cagayan

de Oro, Bacolod, and New

Bohol Panglao


and Development AssociationSamples of Pipeline PPP

Projects on Water &

Sanitation• Bulacan Bulk Water System worth PhP____

• Baggao Water Supply Project worth P84.22 million

• Cagayan de Oro Septage Management Project

worth P128 million

• Quezon City Waste-to-Energy-Project worth P

16.56 billion

• Pampanga Bulk Water Supply Project costing P

16.7 billion,

• Cebu City Solid Waste Management Project (no

cost estimate available)



Integrated Sanitation

Approach (ISA)

• BNS cooperates with

cities/municipalities for piloting

system solutions for Integrated

Sanitation Approaches under

the umbrella of SDGs and the

New Urban Agenda.



Drivers Towards Local

Septage Management in Bauang,L.U.

• Problems on sludge disposal characterized by

improper desludging and disposal of sludge,

• Lack of access to and poorly designed, constructed,

and maintained septic tanks,

• Illegal sludge disposal by private enterprises

• Lack of financial and technical capability of the LGU

to design, construct and operate septage treatment

facility

• LGU expressed its interest in implementing and

prioritizing a Systematic Septage Treatment Project

as part of the Integrated Sanitation Approach


and Development AssociationBackground• Land area of 7,160 hectares or

4.8% of the entire province

• 91.5% of land area are A&D; 8.4%

public forest lands; mostly

grasslands

• Population of 72,391 with 15,669

households (YR_); 21% urban; 79%

rural population

• 32.56% of HHs source water supply

from deepwells; 22.88% have water

connections; 24.31% use bottled

water; 20.22% from dug wells,

shallow wells, protected &

unprotected springs, etc.


and Development AssociationPrecursors to the STF• Approval of the Sangguniang Bayan of Bauang for

the financing and construction of a Systematic

Septage Treatment Plant at Brgy. Payocpoc

through a private sector financing arrangement.

• LGU opens it to all interested public and private

entities, investors, organizations with technical and

financial capacities and willingness to finance and

invest in the project.

• Private proponent was the first to express its

interest & willingness

• Signing of memorandum of agreement covering

the contractual & financing arrangements for the

STF consistent with applicable Philippine laws &

regulations



• LGU obtained the approval of the Sangguniang

Bayan of the Municipality of Bauang for the

financing and construction of a Systematic

Septage Treatment Plant through an appropriate

financing arrangement.

• LGU welcomes all interested public and private

entities, investors, organizations with technical and

financial capacities and willingness to finance and

invest in the project.

• Scales-up MLGU’s investments in sanitation sector

of Municipality


and Development AssociationProject Scope

Target: Entire Municipality (39 barangays)

Population: 72,391 (15,669 households)

Capacity for Septage/ fecal Sludge: approximately

(2x)10 cubic meters per day

Location: Barangay Payocpoc, Mun. of Bauang

Total Land Area: 7,160 hectares



Recommended Treatment

Facility

Septage Management process

Flow



STF Financing OptionBuild Operate Transfer SchemePrivate Investor Municipality of Bauang

Land -3,000 sqm

& right of way

PhP3.0M • Pass ordinance for RPU-based

tariffs

Capital investment

• STF construction

• Acquisition of

desludging trucks

• 12.0M

• 4.0M

• Prepare the Concept Design and

Technical Specifications

• Maintain peace and order in the

STF site

Total CAPEX PhP19.0M • Monitor the implementation of the

PROJECT during its construction

Exercises fiduciary rights and

privileges accorded by the terms &

conditions of the contract, e.g.,

• Operate & maintain the STF

• Reportorial obligations by the

MLGU

• Facility inspections

• Others

• Charge & collect user fees/tariffs

from users

• Remit to the Private Investor the net

income at the end of the contract

period



Project Cost Summary

• CAPEX:

– Land: 3,000 sqm. PhP 3.0 M

– Facility 12.0 M

– Desludging trucks

(2 units, each with 3.5 cu.m capacity) 4.0 M

Total CAPEX PhP19.0 M

• OPEX* PhP 3.5 M/yr.

(Truck collection & facility)

*To be sourced from user fee revenues


and Development AssociationUSER FEE SCHEME

Option 1. All RPUs, Uniform rate, Collection

Through RPT

RPU

ClassificationNo. of RPU

User Fee

(PhP)

1st Year of

Collection

100% (PhP)

80%

Assumption

collection (PhP)

Residential 16,194 600.00 9,716,400 7,773,120

Commercial 975 600.00 585,000 468,000

Industrial 60 600.00 36,000 28,800

Agricultural 14,479 600.00 8,687,400 6,949,920

Government 803 600.00 481,800 385,440

Religious 87 600.00 52,200 41,760

Educational 259 600.00 155,400 124,320

Others 2,065 600.00 1,239,000 991,200

TOTAL 34,922 20,953,500 16,762,560

80% Projected Collection: PhP16,762,560



If User Fee is imposed on all RPUs:

• The table shows that the potential

100% collection for all RPUs will

amount to Php20,953,500

• but the projection for 80% collection

is Php 16,762,560.

Php 16,762,560: 80% collection from RPU

- 6,048,000: Desludging truck collection

payment

PhP 10,714,560 Savings



Option 2: If Uniform User Fee is imposed ONLY

on Taxable Properties

RPU


User Fee

(PhP)

1st Year of

Collection

100% (PhP)

80% Assumption

collection (PhP)

Residential 16,194 600.00 9,716,400 7,773,120.00

Commercial 975 600.00 585,000 468,000.00

Industrial 60 600.00 36,000 28,800.00

GOCCs 99 600.00 59,400 47,520.00

Water 2 600.00 1,200 960.00

Cultural 1 600.00 600 480.00

Others 2062 600.00 1,237,200 989,760.00

TOTAL 19,393 11,635,800 9,308,640

80% Projected Collection 9,308,640

The table shows that when the user fee is only applicable to taxable

properties except agricultural units, the assumption of 80% collection will

result to revenue of PhP 9,308,640.00 which is sufficient for the payment of

desluding fee per manifest. Under this option, net revenue/savings is only

Php3.26M which is less than half of the net revenue under Option 1 (All

RPUs)



Non-Uniform User Fee based on

RPU ClassificationsRPU Classification Septage

Fee/Year

Residential 600.00

Commercial 1,000.00

Industrial 2,000.00

Special 800.00

Government Office 800.00

Religious 600.00

Educational 1,500.00

Cemetery 600.00


and Development AssociationUSER FEE SCHEMEOption 3. All RPUs, Non-uniform rate, Collection

Through RPT

RPU


User Fee

(PhP)

1st Year of

Collection

100% (PhP)

80%

Assumption

collection (PhP)

Residential 16,194 600.00 9,716,400 7,773,120

Commercial 975 1,000.00 975,000 780,000

Industrial 60 2,000.00 120,000 96,000

Agricultural 14,479 600.00 8,687,400 6,949,920

Government 803 800.00 642,400 513,920

Religious 87 600.00 52,200 41,760

Educational 259 1,500.00 388,500 310,800

Others 2,065 600.00 1,239,000 991,200

TOTAL 34,922 21,820,900 17,456,720

80% Projected Collection: Php17,456,720 (higher by 0.06% vs,

net revenue using uniform user fee)



• The 3 options above shows the different

scenarios on the user fee collection based on

Real Property Tax/RPUs, showing that :

• Option 1(all RPUs, uniform rate) net revenue of

PhP10.7M is realized (214,000usd)

• Option no. 2 (Only taxable RPUs, uniform user

fee) results to net revenue of Php3.26M

(65,200usd)

• Option no. 3 (All RPUs, non-uniform user fee

gives PhP 11.41M (228,200usd) net revenues,

which is 0.06% more than Option 1.



Possible Repayment Scheme to

Private Investor• Payment for desludging fees:

– 3 trips per day

– 288 days operation per year

– PhP3,500 (70usd) for commercial and

household desludging fee

– Total: PhP 6.048M (120,960usd)/year (2

trucks)

Recoupment period: ___ years of CAPEX

Its Prospects for ISA Projects in Municipality of Bauang ... · System, and the NLEX-SLEX Connector...

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