#EjapForum2012: Achieving investment grade through PPP

EJAP External Vice President Jimmy Calapati delivers his opening remarks.

EJAP Director Dax Lucas introduces the forum's keynote speaker - Transportation Secretary Joseph Emilio Abaya.

Abaya replaced now DILG Secretary Mar Roxas as head of the Department of Transportation and Communications.

Abaya: Transportation helps build our economy. It facilitates the transfer of goods and services. The DOTC's efforts are not just centered on bridging gaps...the construction of multi-billion infra projects creates jobs, improves mobility in the country. #EjapForum2012

Abaya: The President created the PPP Center to help put forward infrastructure projects. We are aware that the inclination for private sector to join is dependent on govt.

Abaya: More PPPs will be put out before the yearend, This is not political propaganda, we will push these projects out and we will deliver.

Abaya: Journalists play a crucial role. Balanced reporting helps make the country attractive for investors.

Abaya: we guatanee everybody a levdel playing field, no under the tables.

Abaya: a French company participating in the bidding in a rail project was confident they will win...3 or 4 other firms are as confident.

Abaya: within the bounds of laws, we have exercised flexibility. as an off-shoot, we have 4 major companies participating in LRT Line 1.

Abaya: the operation and maintenance of toll ways, the operations and maintenance will be privatized. its a position that DOTC is taking. there is also a debate on allowing private sector to come in via full ppp or hybrid ppp, which allows govt guarantees to come in.

Abaya: govt rolling out a P10-billion-worth project for Mactan Airport. 3 other airport projects are on their way.

Abaya: we are in close coordination with Mon Jimenez of DOT to ensure that all ports, etc are aligned with tourism devt. cruise ships also being included in the plan.

Abaya: P1.8-B automatic MRT ticket dispensers. we will decommission magnetic-based tickets. this will be in the league of HK's Octopus cards. this will remove the long lines at the MRT. this will be pure PPP.

Abaya: with concessional rates, people will get a better end of the stick, through hybrid ppp. we need to ensure that integration goes well. we hope to award the LRT line 1 project by April 2013. It will be tough but that will be the goal.

Abaya: we will ensure that the 4-km LRT Line 2 extension will be flood-free.

Abaya: provincial terminals will also be built. we are targetting a place in the Trinoma-SM North area to connect to the LRT 1, MRT 3, and soon, MRT 7. provincial buses from NLEX will end there. this will make the life of passengers easier.

Abaya: in the south, the 4-5 hectares inside the FTI property will be the location. this will be proximate to the SLEX and the PNR train line. the commuter line from Tutuban is a profitable line.

Abaya: 3rd terminal will be in Cavite which will ease traffic in Roxas Blvd.

Abaya: Mactan Cebu airport, afcs, Bus-Rapid-Transit in Cebu will be presented at the NEDA ICC Cabcom today. The BRT will feature exclusive lanes, much cheaper than LRT-MRT, shorter construction time.

Abaya: road space is a scarce resource. it is the responsibility of the state to manage this.

Abaya: its better to move Filipinos through intelligent buses than cars.

Abaya: use of BRT requires a paradigm shift. we will bring the BRT to Metro Manila. it will soon be a reality in our neighborhood.

Abaya: we want to show the world that it doesnt matter who you know, what matters now is what you can do. what is best for the people remains our guiding lighthouse. we are confident that clear-cut rules, transparency, we can bring the country to its next stage of devt.

Abaya ends speech

quick Q&A with Secretary Abaya.

Kler Batino and Dax Lucas moderating.

Santiago- From now until 2020 expect the Philippines to lag behind other countries in terms of railway projects.

Santiago - Manila was first among ASEAN countries to set up an urban railway. Many of ASEAN countries have now overtaken Manila

Santiago- Project implementation has been slow. Line 1- should have been completed in 2005, Line 2 extension should have been completed in 2006.

Santiago- LRT the fares have been kept stagnant for 9 years now which is ominous for PPP.

Santiago- the Initial 10 top PPP projects I think were deliberately chosen to fail.

Santiago and Antonio will now take a Q&A

On statistics; Antonio- We have 85,000 accounts of people using electronic tags. We generate 1.1 billion transactions a month.

Antonio- In other countries, in the UK the system was introduced about 3/4 years ago. Maybe 60% of motorists are using the tags. In Ireland we have about 50- 55%. In South Africa, there's a project which I think is ambitious but I thin they will get it. they're aiming for 100%. In America, Brooklyn they are trying for 100% and will probably be able to do it in the next 12-18 months.

Antonio- In the Philippines its around 20-22%.

Antonio- getting these tags are not cheap. You have to pay around P1,700. If you look at demographics, people passing through are farmers etc. It's not easy to convince them to purchase it. I believe in the next couple of years people can see the benefits and convenience.

on delays in PPPs, Santiago says - There were enemies of PPP who didn't want it to succeed. Government bureaucrats and private interest. Another reason is many in the government are very unfamiliar with the PPP. The new administration was very careful and timid with pushing it and they didn't like listening to people like me that they were heading in the wrong direction. But I think now they're learning the ropes.

On the LRT 1 bid, Santiago says - January 15 is unrealistic that was their original target. My realistic assessment is that the bid will come in April.

Antonio- The success of inter-operability and toll gates cannot just happen with private companies like us. We need the help of the government. In order to increase the take up of electronical collection which we all know is very accurate, we need this operability.

Antonio- What is preventing us from adopting this system? I can speak for us in the north. We have our inter-operability in the north which can be used to purchase food and other grocery items. The tag comes with a card which you bring to the stores and you purchase with your card. Somehow we can prove that inter-operability can happen because if you can use it to pay for your toll you can use it to pay for your food. It's just a matter of convincing people it can work.

On why 10 initial PPP projects were designed to fail, Santiago says - One example I can give- Bohol airport- they were still aquiring land but they said they were going to put it on bid but aquisiton can take 2-3 years. And i don't see why investors would be excited about Bohol it doesn't have a strong potential.

Santiago-Now the government is getting out of the original 10 proposed PPP projects. They have other lists. On the LRT 1 there are still things to go through. On line 2- the government is prepared to allocate P8.5 billion on civil works if they do that they would have to hire a civil engineer. But there is a shorter way to put all the schemes they want to do in one bid. And I can guarantee that the government would not need P8.5 billion. My calculation is that at P4 billion the whole thing will take off as private sector so you can do it in 2013 in that scheme.

Next speaker is Ferdinand Tolentino, deputy director of PPP Center. #EjapForum2012

He is speaking on behalf of PPP Center executive director Cosette Canilao, who is in the NEDA-Investment Coordination Committee meeting.

Tolentino: PPP program has taken off. We've seen positive results.

Tolentino: Together with various implementing agencies like DOTC, DPWH and DepEd and DOH, the 8 projects we have lined up at the start of the year remained feasible for rollout if requisite conditions are present

Tolentino: The NEDA-ICC is meeting on that list. We're making sure that these projects are well structured, viable.

There is distinct difference between privatization and PPP. Privatization involves the sale of shares of government in a company. PPP is defined as a range of possible contractual agreements between the government and private entities to accelerate provision or implementation of infrastructure and development projects. - Tolentino

Why choose PPP scheme in undertaking projects? PPP demonstrates clearly superior cost efficiency over traditional procurement, says Tolentino

He adds: PPP contributes a higher share in the total number of infra projects implemented. Traditional projects are likely to be completed later than PPPs. Bigger and more complex projects using traditional procurement are negatively impacted by time over runs compared to PPPs. PPPs provide superior performance in botht hte cost and time dimensions. PPPs are fare more transparent than traditional projects.

PPP is one of the measures the Aquino administration has identified in its target to achieve inclusive growth. - Tolentino

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#EjapForum2012: Achieving investment grade through PPP

Esteemed speakers at the forum are expected to discuss the Aquino administration's Public-Private Partnership program and give suggestions on how to push this initiative forward to help the country achieve inclusive economic growth.