NEDA Boards gets to approve reclamation projects

President Benigno S.C. Aquino III has transferred the power to approve reclamation projects to the National Economic Development Authority (NEDA) Board, to ensure the initiatives’ coordination and integration.

“The power of the President to approve reclamation projects is hereby delegated to the NEDA Board,” Executive Order (EO) 146, signed Nov. 15, read.

“There is a need to ensure that reclamation initiatives or projects are coordinated and integrated at the national and regional levels of development planning and programming, consistent with established national priorities of the government, and synchronized with development planning, programming, and budgeting,” the order read.

“The President, as chairman of the NEDA Board, wants to institutionalize a comprehensive vetting process for the approval of reclamation projects that ensures congruence with the Public Investment Program of the Philippine Development Plan,” Presidential Communications Operations Office Secretary Herminio “Sonny” B. Coloma said in a text message on Friday.

EO 146 provides that the Philippine Reclamation Authority will still process, evaluate and recommend the approval of all proposed reclamation projects to the NEDA Board.

EO 543, in 2006, delegated the power of the President to approve reclamation projects to the PRA “to the condition that reclamation contracts to be executed with any person or entity shall go through public bidding.”

“Proposed reclamation projects endorsed by the PRA to the NEDA Board should include all relevant documents as may be required by the NEDA Board, such as but not limited to Letters of Intent, Project Proposals, Pre-Feasibility Studies, draft agreement or contract. Such delegation however shall not be construed as diminishing the President’s authority to modify, amend or nullify NEDA Board’s action,” EO 146 read.

It further states that the approval of the NEDA Board is required for the following:

• reclamation projects initiated/proposed by PRA or any government entity allowed under existing laws to reclaim land;

• reclamation projects initiated by the private sector/entity through PRA, Local Government Units or other government agencies authorized to reclaim land; and

• reclamations / reclamation components of respective development projects of such agencies mandated to reclaim under their respective charters, such as but not limited to the following agencies: Philippine Ports Authority, Laguna Lake Development Authority, Bases Conversion and Development Authority, Subic Bay Metropolitan Authority, Philippine Veterans Investment Development Corporation, Department of Public Works and Highways, and National Power Corporation.

Except for the power to approve reclamation projects, all other powers, functions, and mandates of PRA shall be retained and exercised by the agency, EO 146 stated.

In addition, it stated that an Environmental Compliance Certificate shall be secured from the Department of Environment and Natural Resources.

“No reclamation work shall commence without the required ECC,” it said.

EO 146 also states that all reclamation projects should undergo competitive public bidding “consistent with the government’s thrust to promote transparency and competitiveness.”

The order applies to all reclamation projects, including those under actual implementation and those reclamation that have yet to start.

The Palace did not mention if the EO has something to do with the Pasay City reclamation deal.

Pasay City Legal Officer Severino C. Madrona, Jr. on Thursday said the city has already signed the joint venture agreement with SM Land, Inc. on Nov. 15 and that joint venture documents were submitted to the PRA on Nov. 19.

SM Land will be the official partner of the city government for the reclamation of 300 hectares in the Manila Bay area.

Ayala Land, Inc.; GT Capital Holdings, Inc.; and S&P Construction Technology and Development Co. bought bid documents but did not submit counterproposals by the Nov. 4 deadline due to questions on project terms. -- Kathryn Mae P. Tubadeza 
 
source:  Businessworld

What? No second runway for Mactan?

Since Megawide Construction won the lowest bid for the Mactan Cebu International Airport Project, I have kept silent on this issue so as not to say that we as a columnist are blocking this bidding that is supposed to help improve the Mactan International Airport of which I was a Director for nearly 20-years. However too many pundits have already written and said their piece on this issue.. So I must now say my ten cents worth.
First of all, I fully concur to what my good friend Robert “Bobby” Joseph said during the 888 News Forum in Cebu a couple of months back that the P17.5 billion Mactan Cebu International Airport Project was highly-questionable given the fact that this did not include a second runway. If I can recall, it was as far back as 12 years ago that I already insisted upon the MCIAA Board that Mactan International Airport should construct a second runway if we are going to look towards Cebu’s economic growth.

Alas my request fell on deaf ears. Clearly, officials of the Department of Transportation and Communications (DOTC) did not feel or believe that a second runway was necessary at that time. This is the kind of mentality that exists in the DOTC… where you only construct something when it is already needed. This is why there is traffic congestion not only in the Ninoy Aquino International Airport (NAIA) but also in most of our metropolis. In my book DOTC is a total failure for not being able to predict or at least anticipate the future of traffic and prepare the roads needed by our motorists.

Just take a good look at the NAIA today. Aside from the original Ninoy Aquino International Airport (NAIA), the DOTC constructed the Centennial International Airport exclusively for the use of Philippine Airlines (PAL). During Pres. Erap Estrada’s time, Fraport constructed the NAIA III (which still has no CCTV) which was highly contested, but in the end NAIA finally took control over this facility and look what has happened since? Thanks to two runways that criss-crossed each other, air traffic in NAIA is just as bad as the traffic in the South Luzon Expressway (SLEX).

If I always used Hong Kong’s International Airport as our best example it is due to the distinction of it’s being one of the world’s busiest and best airports. Yet it was only in 1998 when operations of the Hong Kong International Airport was moved to the islands of Chep Lap Kok and Lam Chau, which were mountains that were leveled to ground.

My idea of following the Hong Kong example would therefore allow more international flights to Cebu. Also we in Cebu do not want to follow the wrong example of what is happening in NAIA. Alas, we are stuck with the centrist mentality plaguing the DOTC since the Marcos dictatorship. So now, the DOTC has bidded this P17.5 billion airport facility sans a second runway. In short, P17.5 billion for an airport facility is just too expensive and it just makes me wonder why this facility is costing so much?

What I found deeply disturbing with the winning bidder Megawide is that, its international partner GMR Infrastructure, Ltd from Bangalore, India has only operated international airports in India and in Istanbul. Yet none of these airports are known to worldwide travelers as a great airport destination. For years under the leadership of then Mayor Tomas Osmeña, Cebu has always looked up to Singapore as Cebu’s target… a city second to none. This is why we were elated that there were other foreign bidders that participated in this bidding.

Then came that news report from The STAR’s Business Section last Monday which blared, “Disqualification of Megawide Group in Cebu Airport bid sought.” That article should raise red flags on the Megawide-GMR consortium. Firstly because we really don’t care about having a construction company build this airport for us. What we really care about is the group that can operate this airport facility just like most modern airports are being run in Asia. Take a look at NAIA III, it is a well-built airport, but it is faltering because of a lousy airport management operating it.

That GMR’s many issues on their way of running airports is a key factor that the DOTC ought to look into before awarding this group the Mactan International Airport project. That the Male Ibrahim Nasir International Airport in Maldives was cancelled by the Maldives government last December 2012 should be a worrisome concern. I’m not trying to push for any of the other bidders. But certainly the Megawide/GMR consortium has highly-questionable issues.

`So too with this whole package for the Mactan International Airport deal, which doesn’t include a second runway. So before things get worse, it is time for us to jolt those DOTC officials into giving Cebu a second runway before they award the winners of this bid. So please don’t say that we didn’t warn you. We needed that second runway 10 years ago!

Email: vsbobita@mozcom.com or vsbobita@gmail.com

source:  Philippine Star Column of Bobit S. Avila 

TPLEx formally opens

SAN MIGUEL CORP.-led Private Infra Development Corp. (PIDC) on Monday formally opened a stretch of Tarlac-Pangasinan-La Union Expressway (TPLEx), which is expected to be completed ahead of schedule in 2015.

President Benigno S. C. Aquino III led inauguration rites yesterday at Brgy. San Pascual in Tarlac City, together with San Miguel President and Chief Operating Officer Ramon S. Ang and Public Works Secretary Rogelio L. Singson.

In a statement, PIDC, the concessionaire of the expressway, said it aimed to complete the project in 2015 from the 2018 original schedule.

“In terms of construction, we are ahead of schedule. We are on track to delivering the entire length of TPLEx as early as 2015,” said Mr. Ang was quoted in the statement as saying.

Yesterday’s inauguration coincided with the opening of the expressway’s Paniqui Exit, which brought to 23 kilometers (km) the total length of the road that is now operational.

PIDC last October opened the first 17-km stretch of the toll road from Tarlac City to Gerona, Tarlac initially for free use by motorists.

Mr. Ang said PIDC will begin collecting toll fees staring next month. “I think in January, second week,” he told reporters yesterday.

From Tarlac City to Gerona, PIDC will be collecting P30.00-P58.00 for Class 1 vehicles (jeepneys, pickups, vans and cars); P76-145 for Class 2 vehicles (light trucks and buses) and P91-P174 for Class 3 vehicles (trailers and large trucks), according to an information sheet distributed to reporters on Monday.

PIDC is working on the 27-km stretch from Paniqui to Moncada in Tarlac, then to Carmen in Pangasinan -- including construction of a 950-meter Agno viaduct -- which is expected to be competed by April next year.

“Right now, we are waiting for the completion of the acquisition of the right of way for the 13.72-kilometer portion from the north bank of the Agno river up to Urdaneta. But our government is working on that. We are confident that we will complete this section up to Urdaneta as early as December 2014,” Mr. Ang said.

PIDC said remaining 25.83-km section from Urdaneta to Rosario, La Union will be completed the following year.

TPLEx, which is said to cut travel the travel time between Manila and Baguio to two to three hours from six, will have security features such as regular patrols by traffic and emergency assistance personnel.

San Miguel, which has diversified to heavier industries such as power and infrastructure from food and beverage, controls the concessionaires behind South Luzon Expressway and Manila Skyway.

Its unit Optimal Infrastructure Development Corp. last May won the P15.8-billion public-private partnership (PPP) project to build Ninoy Aquino International Airport Expressway, which will link the main airport and Bagong Nayong Pilipino Entertainment City Parañaque City near Manila Bay.

San Miguel, together with Indonesia’s Citra Group, last September secured the green light from Mr. Aquino to build P26.5-billion Skyway 3, a 14-km toll road that will link North and South Luzon expressways.

The conglomerate is eyeing even more toll road projects, with subsidiary Optimal Infrastructure in October submitting prequalification documents for the P35.5-billion PPP project to build the 47-km Cavite-Laguna Expressway.

San Miguel’s net income plunged 28.46% to P17.67 billion as September from P24.70 billion in the same nine months last year, weighed by higher foreign exchange losses. Sales gained 6.65% to P542.56 billion from P508.73 billion, while cost of sales grew 5.54% to P457.97 billion from P433.93 billion.

Its shares lost 95 centavos or 1.58% to close P59.05 apiece on Monday from P60.00 on Friday last week. Philippine financial markets will be closed on Tuesday and Wednesday for Christmas holidays. Trading resumes on Thursday. -- CHCV
  
source:  Businessworld

DMCI bags airport rehab deal

THE GOVERNMENT has awarded the contract to rehabilitate Ninoy Aquino International Airport Terminal 1 (NAIA-1) to DMCI Holdings, Inc., the Transport chief told reporters on Monday.

“We have awarded the rehabilitation of NAIA-1 to DMCI,” Transportation and Communications Secretary Joseph Emilio A. Abaya said at the sidelines of the launch of the Philippine National Railways’ service between Tutuban station in Manila and Sta. Rosa, Laguna.

The infrastructure conglomerate submitted the best bid for the P1.64-billion contract, Mr. Abaya said, although he could not readily provide bid details. The Consunji-led holding firm bested two other bidders -- Hillmarc’s Construction Corp. and EEI Corp. -- during the auction held last Dec. 20, he added.

The project involves architectural, structural, mechanical and electrical works, he explained.

“Once we will have issued the notice to proceed, they (DMCI) can start early next year, maybe [in the] first week of January,” Mr. Abaya said.

He said the project could be completed by December next year.

“We are really behind, but that is our target,” Mr. Abaya said.

DMCI grew net income by 87.4% to P18.74 billion as of September from P10 billion in the same nine months last year. Revenues rose 5.24% to P41.15 billion from P39.1 billion, while cost of sales edged up to P26.25 billion from P26.12 billion.

Its shares gained 95 centavos or 1.72% to close P56.30 apiece on Monday from P55.35 each on Friday last week. Philippine financial markets are closed on Tuesday and Wednesday for the Christmas holidays. -- LCSM

 
source:  Businessworld

Gov’t upbeat on PPPs

Gov’t upbeat on PPPs

INCREASED investor interest in public-private partnerships (PPPs) has raised government expectations about its centerpiece infrastructure program.

The Aquino administration is confident that seven projects, instead of five, will be completed when its term ends in 2016, PPP Center Cosette V. Canilao yesterday told reporters.

The government also expects to have awarded at least 15 contracts by then, she added.

"These are our working targets which we think are achievable," Ms. Canilao said.

Last October, she said that following delays, only five projects would likely be finished before President Benigno S. C. Aquino III steps down:

• the P1.96-billion Daang Hari-South Luzon expressway project;

• P16.42-billion PPP School Infrastructure Program (PSIP) Phase 1;

• P3.86-billion PSIP Phase II;

• P15.68-billion Ninoy Aquino International Airport (NAIA) expressway; and

• the P5.69-billion Philippine Orthopedic Center modernization project.

The five have already been awarded. The list now includes the just auctioned off 1.72-billion Automatic Fare Collection System (AFCS) and the P7.7-billion Integrated Transport System.

All seven are included in the 15 projects that the government is targetting to award by 2016, the others being:

• the P35.42-billion Cavite-Laguna Expressway;

• P17.5-billion Mactan-Cebu International Airport project;

• Light Rail Transit Line 1 (LRT-1) Cavite Extension;

• P29.83-billion Bulacan Bulk Water Supply Project;

• P15.92-billion Laguindingan Airport operations and maintenance (O&M) contract;

• P44.31-billion New Centennial Water Supply Source deal;

• P2.34-billion enhanced O&M contract for the New Bohol Panglao Airport; and

• O&M of LRT Line 2.

"These are very doable projects before the President’s term ends," Ms. Canilao claimed, adding that with more commercially viable projects being offered, the private sector was now more upbeat on participating.

The government, she also noted, would be earning close to P28 billion from the combined premiums offered for the NAIA expressway, Daang Hari, AFCS and Mactan-Cebu deals.

source:  Businessworld

Megawide finalizing loan deal for hospital PPP venture

Megawide finalizing loan deal for hospital PPP venture

LISTED BUILDER Megawide Construction Corp. is wrapping up a deal for a syndicated loan worth nearly P3 billion that will help bankroll the current administration’s first hospital public-private partnership (PPP) project, a senior company official said yesterday.

“We are almost done with the financial closure. It’s a syndicated loan. We are raising around P2.9 billion for Philippine Orthopedic,” Chief Financial Officer Oliver Y. Tan told reporters over lunch in Makati City. “The rest would be internal [funding].”

The company has tapped Land Bank of the Philippines as the lead arranger for the syndicated loan from “two to three banks.” Mr. Tan declined to name the lenders.

Megawide’s consortium with World Citi, Inc. last Dec. 11 obtained a notice of award for a P5.7-billion contract to modernize the Philippine Orthopedic Center in Quezon City. The project involves construction of a new 700-bed hospital and a 25-year concession period during which World Citi will manage the hospital.

“We are in the design phase. In the last quarter of next year, we hope to start construction,” Mr. Tan said.

“It will take two years to complete the project, we are looking at the first quarter of 2017 for it to be up and running.”

Last week, Megawide, together with its Indian partner GMR Infrastructure Ltd., tendered the best bid for the P17.5-billion PPP project to expand and operate Mactan-Cebu International Airport, after offering P14.40-billion upfront payment to the government on top of shouldering the construction cost.

The Megawide-GMR bid is still being evaluated by the Transportation department, and a notice of award could be issued on Jan. 6 next year.

Mr. Tan said Megawide could tap existing bank lines if his company bags the project.

“Tapping the equities market has always been an option but we don’t want to be diluted anymore, so we might probably do a stock rights offering,” Mr. Tan said, referring to a share sale wherein existing shareholders could maintain ownership in the company.

“But we are ready without even going to the capital market. Obviously, you don’t go to a war without ammunition.”

The airport project could be the fourth PPP deal to be awarded to Megawide.

The company last October bagged two of the five contracts under the P8.8-billion PPP for School Infrastructure Project (PSIP) Phase II.

Its consortium with Citicore Holdings Investment, Inc. was one of two groups that last year won the P16.42-billion PSIP Phase I.

Megawide recorded a net profit of P983.24 million as of September, up 55.21% from P633.50 million in the same nine months last year. Contract revenues increased 28.70% to P7.22 billion from P5.61 billion, while contract cost rose 26.65% to P5.94 billion from P4.69 billion.

Megawide shares gained 46 centavos or 3.33% to close P14.28 apiece yesterday from P13.82 each last Tuesday.

source:  Businesswolrd

Megawide-led group set to bag airport PPP

Megawide-led group set to bag airport PPP

MEGAWIDE Construction Corp. and India’s GMR Infrastructure Ltd. are likely to bag the P17.5-billion Mactan-Cebu International Airport (MCIA) project, the largest public-private partnership (PPP) deal offered so far by the government.

The consortium beat six others including the country’s top conglomerates, offering a premium of P14.4 billion for a 25-year concession to operate the country’s second-biggest airport, located in the Visayas, and build one of its terminals.

Financial proposals submitted last Nov. 28 were opened by the Transportation department yesterday.

The Megawide-led bid was about P400 million above the second-placed offer from a group led by property-to-banking firm Filinvest Development Corp. and Changi Airports Saudi Ltd.

"This is the highest, I think, premium paid to government, thus far. Last one was [the] NAIA (Ninoy Aquino International Airport) expressway which is P11 billion," PPP Center Executive Director Cosette V. Canilao said.

A unit of conglomerate San Miguel Corp. earlier this year bagged the P15.86-billion NAIA Expressway Phase II project by offering the government an upfront fee of P11 billion.

"[A]ll of the bidders were keenly interested and they believed in the project, that is why you can see of all them bid at a premium," Transportation Undersecretary Jose Perpetuo M. Lotilla said.

A notice of award will be issued on Jan. 6 while the signing of the concessionaire agreement has been scheduled for Feb. 6.

"It is still subject to the continuing process of evaluation before the notice of award is given," Mr. Lotilla said.

Megawide, with a market cap of $428 million, has so far won three out of five contracts -- valued at around P26 billion -- tendered by the government under the three-year-old PPP scheme.

On Wednesday, a Health department official said Megawide -- the sole bidder -- had won a 25-year contract for the P5.70-billion new Philippine Orthopedic Center project. In 2012 it bagged a segment of the PPP School Infrastructure Project Phase One (PSIP-1), followed by another deal under the PSIP-II last October.

Megawide’s MCIA offer bested those from bigger rivals that included the country’s most valuable conglomerate, SM Investments Corp., and the most diversified, San Miguel.

SM teamed up with Flughafen Zurich AG, while San Miguel partnered with Incheon International Airport Corp.

Other bidders were the consortium of Metro Pacific Investments Corp. and JG Summit Holdings Corp. with partner Aeroports de Lyon; First Philippine Holdings Corp. and Wellington International Airport Limited; and Ayala Corp, Aboitiz Equity Ventures Inc. and Houston Airport System.

Megawide and GMR aim to build an airport terminal that can accommodate 25 million passengers a year, more than three times the government requirement, said Oliver Y. Tan, Megawide chief finance officer.

But he said the plan would depend on developments in the tourism industry and the security situation, with Manila battling Muslim rebels in the south and a communist insurgency.

The group’s bid reflects its "expectations in terms of the internal rate of return" of the project, Mr. Tan said, adding GMR would take a 40% stake in the joint venture.

GMR operates and maintains three airports in New Delhi and Hyderabad in India, and in Istanbul.

Megawide shares climbed as much as 5% in afternoon trade after the offers were announced, but later erased its gains to settle flat. The broader market was down 2%.

Delays in the bidding process for high-profile PPP projects have clouded prospects of an infrastructure boost that will sustain Philippine economic growth at 7% or higher.

But Manila is now moving to expedite the process. On Monday, officials said a consortium of conglomerates Ayala Corp. and Metro Pacific Corp. gave the best bid for a P1.72-billion contract to operate a smart-card system for the elevated rail network in Manila.

The Mactan airport connects tourist spots in the central Philippines with direct flights from Asian cities such as Hong Kong, Singapore, Seoul and Tokyo.

The existing terminal was designed with a 4.5-million passenger capacity, but 6.2 million passengers passed through in 2011. -- main report by Reuters

source;  Businessworld

Automatic Fare Collection: PPP project likely to go to Ayala, MPIC

THE CONSORTIUM of conglomerates Ayala Corp. and Metro Pacific Investments Corp. (MPIC) are likely to emerge the winners after submitting the highest offer for a P1.72-billion deal to operate a smart-card system for the Philippines’ elevated rail network.

The group, known as the AF Consortium, submitted the best bid by offering a premium of P1.08 billion on top of the cost of designing and constructing the Automated Fare Collection System (AFCS) for Metro Manila.

The deal is one of several projects the government has offered to the private sector under a public-private partnership scheme to fast-track major infrastructure developments.

AF’s offer of a premium was higher by just P103,900 than that of a consortium led by the SM Group, owned by the country’s richest man, Henry Sy.

The third bidder, Comworks Inc. and Berjaya, asked for a subsidy of P2.05 billion.

Two other bidders, the group of E-Trans Solutions and a consortium of Megawide Construction Corp., were earlier disqualified by the government after they failed to meet technical requirements. The two groups said they would appeal.

"We’re very happy with the outcome ... really close bids between the SM and AF consortiums; we’ll just see after 15 days," PPP Center Executive Director Cosette V. Canilao said.

The winning bidder will operate and maintain the AFCS, expected to be operational by the third quarter of 2015, for 10 years. The Transportation department will announce the final winner on Dec. 23 after it conducts a post-bid evaluation.

MPIC President Jose Maria K. Lim said his group was confident of hurdling the post-qualification process.

"Clearly, it shows an appreciation of the retail potential of the micropayments market. We were only able to bid as aggressively as we did because of the size and potential of that market," he told reporters after the bidding.

MPIC Chairman Manuel V. Pangilinan, in a statement, said: "This strategic alliance will create integrated solutions that will improve public transportation through our vision to transform the country’s light rail transit system into a network very much like those in Hong Kong, Singapore, and other major cities in Asia."

Ayala Chairman Jaime Augusto Zobel de Ayala, for his part, said: "We will be leveraging the complementary strengths and assets of each consortium member, and we believe that we can help bring out the promising potential of AFCS not only as a transit fare collection method but as a broader and efficient payment ecosystem at par with global standards."

The AF Consortium partnered with MSI Global, developer of the software for the automatic fare collection system in Singapore and Bangkok, and SMRT, which currently operates Singapore’s mass transit system.

MPIC subsidiary Beacon Electric Asset Holdings, is partly owned by Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Reuters with a report from LCSM

source:   Businessworld

DoTC to open bids for MCIA tomorrow

THE DEPARTMENT of Transportation and Communications (DoTC) announced yesterday that it will open the financial proposals for the first airport public-private partnership (PPP) project on Thursday.

The agency is scheduled to complete the technical evaluation stage for the P17.5-billion Mactan-Cebu International Airport (MCIA) Project today.

The DoTC bids and awards committee will then determine how many of the seven bidders will be eligible for the financial evaluation phase.

It has set a 15-day deadline for the completion of the technical checks from the submission of the bids on Nov. 28. Awarding of the project is set in mid-January.

DoTC Spokesman Michael Arthur C. Sagcal said in a statement that the agency is expediting the tendering process of the project, as the department is poised to offer two new PPP deals this month and next year.

"We are expediting work on our PPPs, especially now that we are re-bidding the LRT (Light Rail Transit) Line 1 Cavite Extension project and preparing to bid out the Integrated Transport System (ITS) project later this month," Mr. Sagcal said.

These seven parties submitted their financial and technical proposals for the airport deal to the DoTC yesterday:

• Metro Pacific - JG Summit consortium;

• AAA Airport Partners of the Ayala and Aboitiz groups;

• Filinvest-CAI consortium;

• San Miguel - Incheon Airport consortium;

• First Philippine Airports led by First Philippine Holdings;

• Premier Airport Group led by SM Investments Corp.; and

• the GMR Infrastructure and Megawide consortium.

Meanwhile, new players have indicated interest in bidding for the LRT-1 extension project, with local construction firm Megawide Corp. and Spanish rail transport operator Globalvia Infraestructuras, S.A. purchasing bid documents.

Bidding for the project is scheduled for April 28 next year.

DMCI Holdings, Inc. and San Miguel Corp., both of which pre-qualified to bid during the initial tender, have obtained bid documents as well.

The DoTC also plans to start the bidding process for the ITS terminals on Coastal Road in southern Metro Manila within the month. This project is to provide commuters with modern and efficient transport hubs where they can conveniently transfer to in-city buses, the LRT-1 system, or other forms of urban transport. -- L.C.S. Marasigan
 
source:  Businessworld

Cutting corners in the tax assessment process

WITH Manny Pacquiao’s tax evasion case with the Bureau of Internal Revenue (BIR) still a sizzling topic, the tax office issued a new revenue regulation that is making waves among taxpayers, tax practitioners and revenue officers with regard to the due process requirements in issuing deficiency tax assessments.

The rules governing the issuance of deficiency tax assessments are long established under Section 228 of the National Internal Revenue Code of 1997 (Tax Code) and its implementing regulation, RR No. 12-99. Under the old rules, after the examination of a taxpayer’s books of accounts and other records pursuant to a Letter of Authority or a Letter Notice, the BIR officer who performed the audit shall notify the taxpayer of the discrepancy or discrepancies in the latter’s tax payments, by issuing a Notice of Informal Conference. The taxpayer is then given 15 days to present his side of the case.

In case the taxpayer fails to timely respond to the Notice of Informal Conference, the revenue officer may endorse his findings for the issuance of a Preliminary Assessment Notice (PAN) or a Formal Letter of Demand (FLD)/Final Assessment Notice (FAN), whenever the case falls under the situations enumerated in the Tax Code when a PAN is no longer required. Again, once a PAN is issued, the taxpayer has 15 days to refute the findings of the revenue officer.

If the issues are not resolved at the PAN stage, the BIR may issue the FLD/FAN calling for the payment of the deficiency taxes. The taxpayer is given 30 days from receipt of the FLD/FAN to submit a written protest against the assessments, and 60 days from the filing of the written protest to submit all relevant supporting documents. The taxpayer’s failure to protest the FLD/FAN or submit all relevant supporting documents within the prescribed period makes the tax assessments final, executory and demandable.

If the Commissioner of Internal Revenue or his duly authorized representative denies the protest, or fails to act on the protest, the taxpayer may elevate the decision of the Commissioner to the Court of Tax Appeals (CTA) within 30 days from receipt of the denial or lapse of the 180-day period for the Commissioner to decide. The taxpayer’s failure to timely appeal the adverse decision or the inaction of the Commissioner of Internal Revenue to the CTA makes the assessments final, executory and demandable.

Revenue Regulations (RR) No. 18-2013, dated Nov. 28, 2013, changed the pace of the tax assessment and collection process by introducing the following amendments:

1. Omission of the issuance of the Notice of Informal Conference;

2. Issuance of the FLD/FAN within 15 days from receipt of the PAN, in case of default by the taxpayer, or within 15 days from filing of the reply to the PAN, in case of disagreement with the tax findings in the PAN;

3. Requirement on the part of the taxpayer to state the nature of protest to the FLD/FAN, whether for request for reconsideration and request for reinvestigation, and prescribing the legal effects of each mode;

4. Institution of the administrative appeal with the Commissioner of Internal Revenue through request for reconsideration, in which the taxpayer is barred from presenting newly discovered or additional evidence to support his case;

5. Inclusion of an exclusivity rule in case of inaction of the Commissioner on the protested assessment, i.e., the remedy of filing a petition for review with the Court of Tax Appeals bars the remedy of waiting for the final decision of the Commissioner or his duly authorized representative, which decision is subject to appeal to the CTA;

6. Institution of personal service and substituted service as modes of serving the PAN/FLD/FAN and the Final Decision on Disputed Assessment (FDDA) in addition to service by registered mail.

The most notable amendment introduced by RR 18-2013 is the removal of the Notice of Informal Conference. The Notice of Informal Conference is not a requirement under the Tax Code; nevertheless, it was institutionalized under RR 12-99 as part of procedural due process. In scrapping this requirement, the BIR aims to achieve an assessment and collection process which, in numerous cases decided by the courts, is defeated by the defense of prescription under the statute of limitations of the Tax Code.

The BIR seems to be keen on formalizing the tax assessment after the investigation reaches the PAN stage. It is interesting to note that the BIR only has 15 days to resolve the issues in the PAN stage and issue the FLD/FAN. A real evaluation of the documents and arguments of the documents submitted by the taxpayer takes time and needs more than 15 days. Understanding the documents, tax reconciliations and legal defenses is impossible to do within a short period of 15 days primarily because of the huge numbers of tax investigations assigned to revenue officers. The only way to prevent the issuance of the FLD/FAN is to settle the tax assessments in the PAN, which would make one wonder why replying to the PAN is one of a taxpayer’s remedies in the first place.

The shortened period does not give the taxpayers enough time to prepare his documents and arguments. More importantly, it does not allow the BIR officers enough time to consider and study the documents and arguments presented to them.

It would seem that the shortened period, though aimed at expediting the process, however makes the PAN stage inutile.

There are other interesting provisions in RR No. 18-2013 which, in my opinion, should have been the topic of an open forum between the BIR and taxpayers, or now that it is issued, be the subject to a clarificatory issuance by the BIR. This "game changer" will take effect on Dec. 15, 2013, and given its important amendments, it pays to have a proper understanding of procedural due process as part of a taxpayer’s rights and remedies under the law.

The author is a tax manager at Punongbayan & Araullo, the Philippine member firm of Grant Thornton International Ltd.
 
source:   Businessworld

P1.7-B single ticketing system for MRT, LRT: 3 groups qualify for DOTC project

MANILA, Philippines - The Department of Transportation and Communications (DOTC) said three of the five prequalified groups that submitted bids for the P1.7-billion single ticketing system project for the Metro Rail Transit (MRT) and the Light Rail Transit (LRT) passed the agency’s technical evaluation.

DOTC spokesperson Michael Arthur Sagcal said the AF consortium led by conglomerate Ayala Corp. and infrastructure giant Metro Pacific Investments Corp. (MPIC) of businessman Manuel V. Pangilinan; Comworks-Berjaya consortium; and the SM consortium of retail magnate Henry Sy Sr. passed the evaluation conducted by the agency’s Bids and Awards Committee (BAC).

“We will carefully review the financial proposals of the three remaining groups only.  At the end of the day, we must make sure that both government and the public will get the most advantageous terms possible,” Sagcal stressed.

After opening the financial proposals on Monday, he said the agency would conduct a financial evaluation of each opened submission in accordance with the Build-Operate-Transfer (BOT) Law.

“We have been speeding up the process.  At the rate we are going, we should be able to award the contract by January,” he added.

The two groups that failed to hurdle the agency’s technical evaluation were the E-Trans Solutions Joint Venture Inc. and Megawide-Suyen-Eurolink consortium due to substantial deficiencies regarding their ability to implement the project.

According to the BAC, E-Trans Solutions’, technical proposal did not describe the required conditions for use of the project, which would protect the card user’s data privacy. It was also found to be incomplete, unclear, and did not show compliance with the project’s scheme provider principles. Moreover, its business plan did not follow the projection computations contained in the draft concession agreement.

As for Megawide-Suyen-Eurolink, its business plan was found to be incomplete and inconsistent and did not contain the required project internal rate of return, making it impossible to evaluate the project’s feasibility.
In addition, the payment and revenue numbers it indicated in one section of the business plan contradicted the very same items contained in another section. It also pegged its post-tax equity return at -2.64 percent, which indicates that the proposal may not be self-sustaining.

All five groups submitted technical bids and financial bids for the P1.72 billion Automatic Fare Collection System (AFCS) project last Nov. 18.

The winning consortium has the option to expand the contactless card system to other businesses in and out of the transportation sector such as in retail transactions.

The MRT-LRT single ticket is envisioned to be like Hong Kong’s Octopus Card, which serves as a debit card, aside from being a stored-value train ticket. The single ticket could also be used for other modes of transportation such as buses, paying toll, electronic banking, and even shopping.

The AFCS project would bring important benefits to the more than one million daily passengers using the light rail lines, ensuring seamless interconnection for travelers and removing the current inconvenience of the need to buy separate tickets for separate lines.

It would allow the operating authorities to develop a service offering that better suit the needs of the passengers through a system similar to Hong Kong, London, the Netherlands and other countries.
It would replace the current magnetic-based ticketing system that is very much at the end of its usability and could also serve as an electronic micropayment solution in convenience stores, or as identifier for loyalty schemes, facility access and location based services as well as other transport modes including buses and taxi cabs.

The riding public has long urged government to implement a common ticketing system for the LRT Lines 1 and 2 and the MRT 3 as the different ticketing schemes employed in the three mass transport systems have been blamed for the long lines of passengers buying tickets at the train stations.

The MRT line that runs from Baclaran in Pasay City to North Ave. in Quezon City services around 600,000 passengers per day, way above its capacity of 350,000.

On the other hand, LRT Line 1, which runs from Baclaran in Pasay City to Roosevelt in Quezon City, serves at least 500,000 passengers daily while the LRT Line 2, which operates from Recto in Manila to Santolan in Pasig City, caters to 350,000.

source:  Philippine Star

Oil exploration schedule extended

THE JOINT VENTURE of Australian firm Nido Petroleum Ltd. and PNOC-Exploration Corp. (PNOC-EC) will proceed next year with drilling of an exploration well in Service Contract (SC) 63 located in waters southwest of Palawan.

This came after the Energy department approved the joint venture’s request to extend the SC 63 work program until 2014, according to Nido’s report to the Australian Securities Exchange.

Nido said: “the Department of Energy has formally confirmed its approval of the extension of the current sub-phase.” The joint venture had sought a 12-month extension of the current sub-phase which lapsed last month. The extension will allow the joint venture to drill in the area until Nov. 23 next year.

Nido, as the operator, said it is “continuing to progress preparation [sic] for the drilling campaign in relation to the Baragatan prospect and is currently finalizing negotiations with a rig contractor on behalf of the SC 63 joint venture.”

“Nido expects to drill the Baragatan prospect in the first half of the 2014,” the report read.

Last month, Nido reported it had already signed a letter of intent with a preferred rig contractor to drill the exploratory well and that a binding agreement could be signed before yearend.

The joint venture has already secured various permits to drill the well. Other equipment like the wellhead and casing are being stored in Nido’s operations base in Batangas, according to the firm.

Nido last May said the joint venture will spend $22-25 million to drill the exploration well.

SC 63 was awarded to the joint venture in November 2006. The petroleum block covers an area of 1,067,000 hectares. Nido and PNOC-EC each hold 50% interest.

Besides SC 63, Nido also holds 22.88% interest in SC 14 or the Galoc oil field located in waters northwest of Palawan. It also owns stake in other exploration areas in the Philippines, which are SC 54A (42.40%); SC 54B (60%); SC 58 (50%); and SC 6B (7.81%) -- all of which are also located in the waters northwest of Palawan. PNOC-EC also holds 19% interest in SC 43 located in Ragay Gulf in Bicol; 97% in SC 47 located offshore Mindoro province; 25% in SC 59 located in waters southwest of Palawan; and 10% in SC 38, 28% in SC 57, and 50% in SC 58 all located in waters northwest of Palawan. -- Claire-Ann Marie C. Feliciano

source: Businessworld

Reclamation row far from over

THE CONTEST for a multibillion-peso reclamation project in Pasay is far from over given an apparent division within the city government.

The city council on Wednesday passed a resolution recalling its approval of SM Land, Inc.’s P54.5-billion unsolicited proposal to reclaim 300 hectares of land. The city’s Public-Private Partnership Selection Committee (PPP-SC), however, declared the deal would push through.

"We are proceeding with the project," city legal officer Severo C. Madrona, Jr., who sits as PPP-SC vice-chairman, in a interview yesterday. "We have to ignore it (the resolution), but we will write them (the city council) to clarify each point."

SM Land said it could go to the courts given the city council’s move, which rival developer Ayala Land, Inc. welcomed.

"SM Land opines that there are legal remedies available and SM Land will not hesitate in pursuing such recourse if the council insists on this course of action," the company said in a statement.

Dave L. Rafael, the property developer’s senior vice-president, added: "We don’t want to delve on the motives behind why the city council is now belatedly withdrawing its support, but frankly, they were ill-advised."

City council members were not immediately available for comment.

Ayala Land corporate secretary Solomon M. Hermosura, for his part, said city council’s move was "in the right direction."

Mr. Madrona, however, said the "agreement is a perfected contract. We complied with all applicable laws, rules and regulations and it was ratified by the city council."

In Resolution 3059, Series of 2013, issued earlier this week however, the council recalled three prior decisions allowing the reclamation project to move forward. These were Resolution 3040, which allowed the PPP-SC to proceed with the opening of competing proposals; Resolution 3046, which allowed Mayor Antonio G. Calixto to sign the agreement with SM Land; and Resolution 3049, which ratified the award.

With no counterproposals having been submitted by a Nov. 4 deadline, the PPP-SC granted the contract to SM Land last Nov. 15.

This week’s Resolution 3059 was passed after hearings -- for the purpose of crafting new PPP rules -- where Ayala Land and S&P Construction Technology and Development Co. questioned the bidding process.

Ayala Land argued that a 2013 version of National Economic and Development Authority (NEDA) joint venture guidelines, which give challengers more time to prepare, should have been used instead of the 2008 set. S&P Construction, meanwhile, claimed the Build-Operate-Transfer law should have been applied and that bid documents lacked details.

In the Resolution 3059, the city council said "the issue raised by both Ayala Land and S&P Construction cast serious doubt on the legality of the proceedings made with respect to the ... reclamation and development project."

Mr. Madrona denied this, saying: "The 2013 version of the NEDA JV Guidelines is still being reviewed by the PPP Center."

"We don’t want to be the ‘guinea pig’ for these guidelines."

Asked to comment on the lack of project details, Mr. Madrona replied: "Those claims are not true. It was clearly stated there what the competitive challenger needs to do."
 
source:  Businessworld

Exploration progresses in Mindoro oil prospect

THE GROUP handling Service Contract (SC) 53 located onshore Mindoro province aims to drill the second of two planned exploration wells in the first half of next year, according to a regulatory filing.

In its third-quarter financial report, The Philodrill Corp. -- which holds 22% stake in the project -- said the operator of SC 53, Pitkin Petroleum Plc., is already preparing for drilling the second well at the Progreso prospect.

“With regard to the planned drilling activity, Pitkin continued with the preparation for the drilling of Progreso-2 well which is programmed for the first half of 2014,” the report read.

Philodrill said that Pitkin -- which holds a 35% stake in SC 53 -- has progressed in securing approvals for the planned drilling activity.

“The operator has already achieved some success in securing approval of tribal communities and the National Commission for Indigenous People for its various activities on the block,” the company noted.

Last August, Basic Energy Corp. reported that the consortium of SC 53 was set to drill the Progreso-2 well, the second of two exploration facilities under the work program.

Basic Energy has a 3% interest in the SC. The other consortium members are Resource Management Associates Ltd. (35%); and Anglo Philippine Holdings Corp. (5%).

Basic Energy -- which is involved in various oil exploration activities -- also holds minority stakes in SC 47 located offshore Mindoro province and SC 41 in Sulu Sea.

The company recorded a P9.31-million net loss as of end-September compared to the P187.66-million net income in the same nine months last year. Revenues fell 91.3% to P20.23 million from P232.48 million, while costs and expenses dropped by 8.4% to P29.54 million from P32.25 million.

On the other hand, Philodrill -- which is engaged in oil, gas and mineral exploration and development -- holds interests in SC 6A, SC 6B, and SC 14 -- all located in waters northwest of Palawan; as well as SC 41 in Sulu Sea.

The firm’s profit dropped to P208.77 million in the nine months to September from P212.65 million the previous year. Revenues fell 6.46% to P499.26 million from P533.73 million, while costs expenses grew by 2.22% to P321.72 million from P314.74 million.

Shares of Philodrill closed at 3.7 centavos apiece on Friday last week, unchanged from Thursday, while those of Basic Energy added 3.90% to 24 centavos each from 23.1 centavos. -- Claire-Ann Marie C. Feliciano

source:  Businessworld

New PPPs lined up

BIDDING SCHEDULES for two more public-private partnership (PPP) projects are being finalized after National Economic and Development Authority (NEDA) approvals were secured by implementing agencies last month.

The Metropolitan Waterworks and Sewerage System (MWSS) plans to publish the invitation to prequalify and bid (ITPB) for the P24.4-billion Bulacan Bulk Water Supply Project -- the first water PPP -- in January, Administrator Gerardo A. I. Esquivel said.

"We already have a timeline but this is still indicative. Publishing of [the] invitation will be from Jan. 3 to 17 for the Bulacan Bulk Water Supply Project," Mr. Esquivel told BusinessWorld last Friday.

An indicative timeline prepared by MWSS sets the submission and opening of prequalification documents on Feb. 4, to be followed by a 20-day evaluation period. Bid submissions have been tentatively set for Aug. 29 and a notice of award could be issued between Oct. 10-14.

The first water PPP project to be rolled out by the Aquino government entails the provision of treated water to some 24 local government units via the development of new sources and infrastructure.

"The concession period is 30 years, from 2015 to 2045. It has three stages ... the first one covers six water districts to be delivered by 2016...," Mr. Esquivel said.

The first stage calls for the provision of 100 million liters of water per day (MLD) to the municipalities of Obando, Meycauayan, Marilao, Bocaue, Balagtas and San Jose del Monte, while the second involves a 375 MLD volume for Calumpit, Bulakan, Guiguinto, Sta. Maria, Malolos, Paombong, Plaridel, Pulilan and Hagonoy. The final stage covers 237 MLD for Angat, Baliwag, Bustos, Norzagaray, San Miguel, Don Remedios Trinidad, San Ildefonso, San Rafael and Pandi.

TRANSPORT TERMINALS
The Transportation department, meanwhile, is planning to publish this month the ITPB for the P7.7-billion Development of Transportation System at the Food Terminal Inc. (FTI) and Philippine Reclamation Authority (PRA) -- originally known as the Integrated Terminal System (ITS) project.

"The target is to start the bidding process ... this December," Transportation department spokesman Michael Arthur C. Sagcal said in a text message.

The PPP project involves the development of two facilities at the southern outskirts of Metro Manila: the South Luzon Express Way Terminal within the FTI Compound in Taguig, which will serve passengers traveling to and from Laguna and Batangas, and the Coastal Road Terminal inside the PRA property along the Manila-Cavite Expressway that will be for passengers traveling to and from Cavite.

Separate auctions will be staged for both.

The ITS project originally had three components -- two south stations and one north station. PPP Center Executive Director Cosette V. Canilao said the Transportation department "is still looking for the appropriate location" for the north facility. -- Claire-Ann Marie C. Feliciano and Lorenz Christoffer S. Marasigan
 
source:  Businessworld

DOTC staining Phl image in Europe

Speaking of which, irregularities at the DOTC are blackening the Philippines before European governments and businessmen. Envoys and industrialists are complaining about anomalies in recent biddings. These include procurements like:

• P3.8 billion for new trams and refurbishing of old ones of the Metro Rail Transport (MRT-3) along EDSA, Metro Manila;
• P60 billion to extend the Light Rail Transit (LRT-1) into Cavite from Manila, with new coaches;
• P1.24 billion for modern fire trucks in international airports;
• P8.2 billion for computerized registration of new and old cars;
• P3.85 billion for land vehicle license platemaking.

In all those, European firms had submitted original proposals or sealed bids, but mysteriously were eased out. European execs also grumble about poor transport facilities that make travel around the country difficult.
Czech ambassador Josef Rychtar has exposed a $30-million extortion attempt on a Czech firm by MRT managers. As new owner of the original 1999 maker of 73 trams, the firm Inekon Corp. was offering 52 new ones, to refurbish the old, and maintain the entire lot. When Inekon execs rebuffed the illegal exaction, the MRT kicked them out of the deal and began negotiating with two Croatian competitors.

DOTC Sec. Joseph Emilio Aguinaldo Abaya announced an internal probe only in July, three months after first being told about it. And that was only because it had hit the headlines.

MRT general manager Al Vitangcol, named as chief extorter, has since returned from month-long leave. Abaya has yet to bare the inquiry result. Same with the Dept. of Justice’s parallel criminal investigation.
The MRT has since broken up the two contracts: a Chinese firm to supply and refurbish the coaches, and a firm controlled by the managers to handle maintenance.

In the LRT-1, two Filipino companies, with Chinese and European partners, offered build-operate-transfer deals. One proposed to extend the railway 16 kilometers for P56 billion, the other 17 kilometers for P58 billion, with variances in equipment and coach configurations. Instead of holding a Swiss Challenge, the DOTC plagiarized the first offer, then split the contract for awarding to two smaller firms. The first was for rail construction, P30 billion; the second for coach and equipment supply, another P30 billion. The resulting higher total of P60 billion was only for a 12-kilometer extension, with the state having to borrow the funding.
Two Spanish firms have sued DOTC officials for disqualifying them despite turning in the lowest bid for 37 aircraft-rescue fire trucks. Backed by the Spanish embassy, Iturri S.A. and Protec Fire S.A. last June had bid P984.2 million, way below the DOTC budget of P1.24 billion. But the officials gave the contract to a US firm that offered P1.16 billion.

Allegedly the Spaniards failed the specs, like “specialized chassis,” which was undefined until they raised a howl. Supposedly too their truck tires were thinner and so prone to tipping over, despite European certifications of proven performance. Abaya’s main excuse was awkward: that the Spaniards had erred in complaining to the Ombudsman, instead of to the Bids and Awards Committee.

The vehicle registration and platemaking projects have been put on hold indefinitely. This was after the discovery that the DOTC did not have the requisite Multi-Year Obligational Authority to bid them out.
Under the law, a procuring agency must first secure the MYOA from the budget department before proceeding with the bidding. Lack of an MYOA meant there was no funding for the projects to begin with, so the biddings were void.

European firms had partnered with Filipinos in both biddings last May. In the platemaking, one was Polish, two German, one Spanish, and one Dutch. They paid tens of thousands of pesos to enter the DOTC bidding, and tens of thousands of dollars more for feasibility studies; executive time, travel, and accommodations; and legal consultancies. Only the Spanish and the Dutch were declared qualified, and the last the winner. Most are seeking multimillion-peso refunds of expenses because the bidding was null from the start.

Meanwhile, Swiss ambassador Ivo Sieber has told Filipino businessmen that his compatriots watching the way government is dealing with corruption and poor transportation. Swiss execs were finding it hard to travel to their field operations, mostly in mining, cement, and telecoms. Airport authorities severely limit the schedule of private jet takeoffs and landings at the Manila airport. Ships are perilous to ride two-thirds of the year. Railway ties reportedly are so substandard that trains are likely to derail and bridges to collapse in Laguna and Quezon.

source:  GOTCHA By Jarius Bondoc (The Philippine Star)

Socially responsible investment pension funds

I CHANCED upon this ILO (International Labor Organization) publication on Global Extension of Social Security (GESS) that featured the issue on Socially Responsible Investment (SRI). Let me share with you a portion of the document, which I find very timely and relevant for our Social Security System (SSS, which recently issued a policy of increasing our monthly premiums) and Government Service Insurance System (GSIS) to benchmark on in investing our pension funds.

SRI is becoming a prevalent practice globally. According to Mercer (2007), SRI is "an investment process that seeks to achieve social and environmental objectives alongside financial objectives." Moreover, the signatories of the United Nations Principles for Responsible Investment (UNPRI) believe that "environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time)." The diversity in definitions of SRI reflects the variety of approaches in "socially responsible" investments, and its concept varies among investors in different countries.

Here are concrete examples of what a socially responsible pension fund can do based on the good practices of these five countries:

• Previ. This is the employees’ pension fund of the state-owned Banco do Brasil. It is the largest pension fund in Latin America. Previ views companies as potential change agents through which social and environmental issues can be addressed and contributions made for the development and sustainable growth of Brazil. It invests in companies that are both profitable and socially responsible and that benefit the communities in which they operate.

• The Norwegian Government Pension Fund Global. This is a sovereign fund that invests proceeds from Norway’s petroleum industry. It is closely tied to the government. In 2001, the Norwegian government established, on a three-year trial, a dedicated "Environment Fund" for investing in companies in emerging economies that met environmental performance criteria. The Environment Fund was conceived as a mechanism to promote sustainable development. In 2002, the Graver Committee was appointed to develop an approach to ethical investment by the Fund and to propose ethical guidelines. The committee justified that the Fund should avoid complicity in violation of ethical norms linked to human rights and to the environment.

• The Government Employees Pension Fund (GEPF). This is Africa’s largest pension fund. The GEPF implements ESG issues in its investment decisions using a positive screening strategy such as devoting a portion of its assets to investments that address socio-economic imbalances, especially financing Broad-Based Black Economic Empowerment and HIV/AIDS initiatives.

• The Government Pension Fund. This is one of the largest institutional investors in Thailand. It is designed for officials of the Royal Thai Government and is autonomous from the Ministry of Finance. It does not invest in the alcoholic beverages sector because alcohol consumption is against the values of most Thai people and the GPF wants to avoid offending its beneficiaries. It has also extended its focus to environmental and social performance.

• CalPERS. This is the largest public pension plan in the US and the third largest in the world in terms of assets under management. It provides a variety of programs and services to California’s public employees, retirees, and their families. CalPERS is recognized as a leader in corporate governance. It prudently exercises ownership rights with the objective of increasing shareholder value while minimizing risk. It undertakes legal action and lobbying when necessary.

I wonder when our SSS and GSIS pension fund managers will refocus their strategies on socially responsible investments. The sooner they can do this, the better for us and the entire country.

(The author is a Full Professor at the Management and Organization Department of the Ramon V. Del Rosario College of Business of De La Salle University. She teaches Human Behavior in Organizations, Strategic Human Resource Management, Labor Relations, and Research. She is also a management consultant to SMEs, schools, and NGOs. She may be reached at divina.edralin@dlsu.edu.ph. The views expressed above are the author’s and do not necessarily reflect the official position of De La Salle University, its faculty, and administrators.)

source:  Businessworld

Mactan-Cebu International Airport: PPP auction postponed

THE GOVERNMENT’S focus on typhoon relief operations has forced a fresh postponement of an already-delayed public-private partnership (PPP) project.



"The bid submission date for the Mactan-Cebu International Airport (MCIA) project originally scheduled this Friday has been postponed since the NEDA (National Economic and Development Authority) Board meeting did not push through under current circumstances," Transportation department spokesperson Michael Arthur C. Sagcal yesterday said.

The NEDA board, chaired by President Benigno S. C. Aquino III, needs to approve a revised concession agreement for the MCIA project. A meeting was scheduled for Monday but Socioeconomic Planning Secretary Arsenio M. Balisacan on Sunday said it had been moved to Wednesday.

Yesterday, Mr. Balisacan texted: "The NEDA Board meeting has been postponed to give priority to urgent relief and rehab efforts in typhoon Yolanda-affected areas."

A new meeting date has not been set.

"We are still confirming the new schedule. Should the proposed revisions be approved by then, we will schedule the opening [of bids] five days after," Mr. Sagcal noted.

The MCIA project was originally set to be auctioned off last Aug. 28 but interested bidders balked at the offered contract. The Transportation department moved to accommodate their concerns, rescheduling the bidding to mid-October and then to Nov. 15.

The concession agreement’s terms have since been sweetened to include the following:

• lengthening the concession period to 25 years from 20 years;

• transferring the operation and maintenance of the airport apron to the concessionaire, including the right to derive revenue from these areas;

• allowing for flexibility in the implementation of capacity augmentation provisions;

• sharing of the real property tax liability; and

• further raising a prohibition on competing airports to 25 years from 20. In September this bar was increased to 20 from 10 years.

Seven groups have pre-qualified to bid for the project:

• the Metro Pacific Investment Corp.- JG Summit consortium;

• AAA Airport Partners of the Ayala and Aboitiz groups;

• Filinvest-CAI consortium;

• San Miguel Corp.-Incheon Airport consortium;

• First Philippine Airports led by First Philippine Holdings, Inc.;

• Premier Airport Group led by SM Investments Corp.; and

• the GMR Infrastructure and Megawide consortium.

The MCIA project includes the rehabilitation of the existing terminal and construction of a new building with an eight-million annual passenger capacity.

The airport -- the Philippines’ second largest and gateway to the Visayas -- is now being used as a staging point for relief operations to areas devastated by super typhoon Yolanda. Cebu was largely spared by the storm, known internationally as Haiyan, which ripped through the central Philippines last Friday.

Aside from the airport project, the NEDA Board was also set discuss two other PPP projects that were deferred due to the need to revise concession agreements: the P1.72-billion Automated Fare Collection System and the P60-billion Light Rail Transit Line 1 extension. -- L. C. S. Marasigan

source:  Businessworld

JICA unveils urban transport plan

THE JAPAN International Cooperation Agency (JICA) yesterday presented to a group of businessmen a 16-year plan to develop the transport infrastructure in Metro Manila and surrounding provinces.

During a general membership meeting of the Management Association of the Philippines yesterday, JICA Project Manager Shizuo Iwata laid out a specific P2.293-billion infrastructure plan for the government to solve traffic problems in the National Capital Region until 2030, when costs arising from traffic congestion could amount to P6 billion a day.

The plan includes:

• completing missing links such as flyovers, interchanges, and bridges in Metro Manila;

• rehabilitating main urban roads, including EDSA;

• completing the North Luzon Expressway - South Luzon Expressway connections, including port access;

• implementing the Cavite-Laguna expressway, C6 extension - Lakeshore dike road, and the Ninoy Aquino International Airport expressway;

• expanding Light Rail Transit Lines 1, 2, and 3;

• improving connectivity among urban rail lines;

• developing bus rapid transit lines ahead of urban rail lines in major thoroughfares such as Quezon Avenue, C5, and Commonwealth Avenue;

• introducing systematic road safety interventions;

• capping expansion of Manila ports and facilitating diversion to Batangas and Subic ports through incentives; and

• conducting a study for development for a new airport and redevelopment of the port area in Manila.

"By 2030, if nothing is done, government will have to spend P6 billion a day for costs arising from traffic congestion in Metro Manila," said Mr. Iwata.

Should the plan be carried out, the government may earn additional revenues of up to P397 million a day from toll fees, and a commuter would spend just P18 per day for public transport from the current P24-42.

Travel time from Metro Manila to surrounding provinces such as Cavite, Laguna, Batangas, Bulacan, Pampanga and Rizal -- and vice versa -- will also be reduced to 49 minutes.

Mr. Iwata said the transport infrastructure plan will be presented at a Cabinet meeting today. -- D.E.D. Saclag

source:  Businessworld

’Hold your horses’ PRA asserts power over Pasay reclamation

The Philippine Reclamation Authority has raised its concern over the decision of the Pasay City government to go ahead with engaging the private sector in the planned 300 hectare reclamation project in Manila Bay as the former has yet to secure  the go-ahead signal from the agency.

Bay Area Development. Seen to become the country’s premier tourism and enter-tainment hub.

In a statement sent to MST, PRA said that the latest move of the Pasay City government subjecting the unsolicited proposal for the 300 hectares reclamation project in Manila Bay submitted to it by the SM Group to a “Swiss Challenge” is yet to be sanctioned by the govenment agency in-charge for the country’s land reclamation activities”.

Lawyer Joselito D. Gonzales, PRA Asssistant General Manager for Reclamation & Regulation emphasized that under existing laws, the agency has the mandate to integrate, coordinate and approve all reclamation projects nationwide.

“The 300-hectare Pasay City reclamation project has not even reached the first stage as no formal submission has been received by PRA to date. In fact, under current approval protocols being adhered to by the agency, reclamation projects would need to be endorsed by PRA to the NEDA Board for approval, the statement said.

The PRA also stated that last August 22, 2013, it formally wrote Pasay Mayor Calixto to inform the City about the proposed ‘Government Center Project’ to be situated within the area where the 300-hectare reclamation project is to be built.

The City did not respond to the PRA letter and on October 2, 2013, media reports came out regarding the unsolicited proposal by the SM Group to Pasay City and the subsequent conduct of a Swiss Challenge by the City to solicit competitive proposals to the SM offer.

Reclamation projects undergo a rigorous 5-stage approval process according to PRA. These include securing an Environmental Clearance Certificate (ECC), submission of flooding and drainage studies, public consultations by the proponents, detailed engineering designs, geo-hazard assessment as well as financial feasibility studies.

Henry Sy-led SM Land Inc. earlier submitted an unsolicited proposal worth P54.5 billion to the Pasay City government for the reclamation of a 300-hectare “foreshore and onshore” Manila Bay areas within the Pasay City’s jurisdiction.

Financing of the project will be shouldered by SM Land in full under a joint venture (JV) with the Pasay government, according to the proposal.

The Pasay reclamation project is separate from, but adjacent to, similar reclamation projects being considered by the local governments of Las Piñas, Parañaque and Manila.

SM Land projected a seven year completion and offered to  give the city government a share of 51 percent of the reclaimed land, or about 153 hectares.

Property giant Ayala Land Inc. (ALI) has also expressed its interest to bid for the project,  directly competing against the SM group.

The plot thickens
As this develop,the Pasay City government rejected the petition of ALI to extend the deadline for the submission of a counter bid to the P54.5-billion unsolicited offer of SM Land.

Ayala Land chief operating officer Bobby Dy said they would review all its options, including going to court to stop the bidding process, not participating in the bidding, or seeking for a reconsideration.

He said ALI was surprised and disappointed with the Pasay City government’s decision to push through with the Nov. 4, 2013 deadline for submission of bids for the reclamation project.

He said the city’s move was “very unlike” other public-private-participation projects wherein the government, in order to encourage a lot of companies to participate in the bidding, agreed several times to extend deadline for submission of financial and technical bids.

source:  Manila Standard

IBM extends smarter cities challenge program to 2014

IBM said it is extending the Smarter Cities Challenge competitive grants program, which funds the deployment of IBM’s top talent to perform pro bono problem solving in municipalities worldwide. 
Program recipients receive three-week engagements from IBM experts, each valued at USD $400,000, where they can obtain assistance in addressing challenges pertaining to water, energy and environment; health and social services; transportation; and public safety.

In the Philippines, Makati City received a similar grant to be implemented next year. The grant will provide analysis and recommendations from IBM experts on some of the city’s traffic management issues.
For the 2014 cycle, the Smarter Cities Challenge is open to local, regional and general purpose governing bodies including cities, counties, prefectures, boroughs and districts.

Applications may be submitted through November 8, 2013 by visiting www.smartercitieschallenge.org.

source:  Manila Standard

SC issues writ vs Panay dam project

THE SUPREME Court (SC) has issued a writ of kalikasan against the expansion of a dam project in Jalaur River, a major water system in the province of Panay.

In a three-page order, the SC, by authority of Acting Chief Justice Presbitero J. Velasco, Jr., issued the kalikasan writ against the Jalaur River Multi-purpose project (JRMP) and ordered the respondents to make a verified return of the writ within 10 days from receipt.

In a 17-page petition for the issuance of an environmental protection order, former Iloilo Rep. August L. Syjuco, Jr. (2nd district) requested the high court to issue a writ of kalikasan against the expansion of the JRMP project.

Mr. Syjuco said the JRMP’s Phase II would violate the people’s constitutional right to a “balanced and healthful ecology.”

“The benefits offered by this project will be miniscule compared to the disastrous effects it will inevitably cause,” the petition read.

Created by Republic Act (RA) 2651, the JRMP was aimed at regulating and controlling floods caused by the Jalaur River.

The project stored the river’s waters and was used to irrigate agricultural lands and generate power and energy.

In 2009, the National Irrigation Authority (NIA) proposed JRMP’s Phase II which included the construction of three dams measuring around 600 to 800 hectares, which would service 23 municipalities and the cities of Passi and Iloilo.

The proposed expansion would upgrade the existing irrigation systems and supplement power supply.

President Benigno S. C. Aquino III, as chairman of the National Economic and Development Authority (NEDA), approved the project on March 22, 2012 with NIA as lead implementing agency.

In his petition, Mr. Syjuco alleged JRMP II “is ridden with illegalities” and violated several laws as well as the people’s constitutional right to a balanced and healthful ecology and the right to health.

JRMP II allegedly violated RA 8371 or the Indigenous People’s Reform Act (IPRA) when the locals of community of Tumandoks allegedly agreed to the project “through deceit and manipulation”.

“In the same vein, it is not ‘informed’ consent as it was obtained by the exaggeration of benefits without presenting the grave dangers posed by the active fault lines and the susceptibility of the area to landslides,” the petition read.

The project also purportedly violated RA 7160 or the Local Government Code when the project was approved despite lack of consultation and prior approval of local councils.

“Absent either of these mandatory requirements, the project’s implementation is illegal,” the petition read.

The petition further cited potential earthquakes, death of aquatic resources and flooding as among environmental damages that the project would cause in the province.

Other environmental hazards cited in Mr. Syjuco’s petition include: increase of rainfall, intrusion of saltwater to low-lying areas, water depletion, and ecological destruction.

The writ of kalikasan is a legal remedy which aims to protect the people’s right to a “balanced and healthful ecology.” -- Mikhail Franz E. Flores

source:  Businessworld

SC urged to stop Manila transport scheme

A CONSUMER group -- along with thousands of commuters -- yesterday asked the Supreme Court (SC) for a stay order on the implementation of an interim transport terminal (ITT), which prevents provincial buses from entering Manila.

In an 18-page petition for review and prohibition, the Coalition of Filipino Consumers (CFC) also sought to declare as unconstitutional various issuances which created the ITTs for an Integrated Transport System (ITS).

The group’s petition was backed up by some 100,000 signatures from commuters supporting their plea.

“If a temporary restraining order [is not issued], the petitioners could be further irreparably harmed and they may find themselves with no realistic recourse to the courts, or any other means of protecting their interests,” the petition read.

The executive issuances questioned include President Benigno S. C. Aquino III’s Executive Order (EO) 67, which sought for the creation of the ITS, and Administrative Order (AO) 40, which created the ITTs.

The commuters also questioned Memorandum Circular No. 2013-004 of the Land Transportation Franchising and Regulatory Board (LTFRB), which amended the routes of buses entering Manila from Coastal Road and the Manila-Cavite Expressway.

The petitioners said the issuances violated their constitutional rights to due process and equal protection when they were implemented without proper consultations and public hearings.

Named respondents are Executive Secretary Paquito N. Ochoa, Jr., Transportation Secretary Joseph Emilio A. Abaya, Budget Secretary Florencio B. Abad, LTFRB Chairman Winston M. Ginez and Metropolitan Manila Development Authority (MMDA) Chairman Francis N. Tolentino.

EO 67 is based on the Aquino administration’s 2011 to 2016 Philippine Development Plan, which prioritizes the creation of “integrated and multi-modal transport and logistics system under the Public-Private Partnership (PPP) framework.”

“The President recognizes the importance of an organized mass transportation system, which is why he has made it a priority to interconnect the nation’s mass transportation systems such as buses and railways within his term,” Mr. Ochoa earlier said.

AO 40 established interim transport terminals in preparation for the integrated transport system. In turn, the LTFRB issued the memorandum circular which shortened the routes of PUBs to their designated ITTs.

ITTs include Southwest Terminal for provincial buses entering Manila through Coastal Road and Manila-Cavite Expressway, and the North Transport Terminal for provincial buses entering Metro Manila via the North Luzon Expressway and other roads north of Manila.

South Interim Transport Terminal, on the other hand, is intended for buses entering the capital via the South Luzon Expressway and the Skyway.

A similar petition was earlier filed by two teachers commuting to Manila from Cavite.

Panita Ladera and Dolores Salanga earlier asked the high court to declare the ITTs as unconstitutional. -- Mikhail Franz E. Flores

source:  Businessworld

Gov’t pays initial $8 million for NAIA-3

THE GOVERNMENT has paid an initial $8 million (about P346 million) as down payment for the multimillion Manila international airport development project that a Japanese contractor first bagged in 1997.

The government has also given Takenaka Corp. the go signal to start the completion of the system works of the Ninoy Aquino International Airport Terminal 3 (NAIA-3) for it to become fully operational.

“We’ve made our initial down payment of 20% ($8 million) in September but real work would start in November,” Transportation Secretary Joseph Emilio A. Abaya said in a chance interview yesterday.

Takenaka bagged the $40-million rehabilitation project last August.

“They [Takenaka] are abiding by the July 2014 deadline,” Mr. Abaya added.

The rehabilitation works, which is mainly the completion of the 23 system works requirement of NAIA-3, include baggage handling, flight information displays, computer terminals, gate coordination, and fire protection systems, among others.

Mr. Abaya said that of the 23 system works that are required by the government, Takenaka has already procured 14.

Mr. Abaya said that the funding for the payment came from the 2013 budget.

“No need for an item for 2014,” he said, explaining that the whole payment for the project was already included in this year’s budget.

With the said completion, the Department of Transportation and Communications (DoTC) expects NAIA Terminal 3’s annual passenger capacity to double to 13 million passengers from almost 6 million passengers a year. The said terminal posts at least 37,000 passengers daily.

Takenaka was the primary subcontractor of Philippine International Air Terminals Co., Inc. (Piatco), builder of NAIA-3, which had taken the government to court over the cancellation of its contract and the expropriation of the facility.

The NAIA-3 contract, awarded to Piatco in 1997 during the Estrada administration, was declared irregular by the Arroyo government in 2002.

CASE FOR COMPENSATION
Partly owned by Germany’s Fraport AG, Piatco had won the build-operate-transfer (BOT) contract to build NAIA-3.

After the government halted construction of NAIA-3, Piatco and Fraport lodged cases before the International Chamber of Commerce (ICC) in Singapore and the International Center for Settlement of Investment Disputes (ICSID) in Washington DC, respectively.

Takenaka had joined in the dispute to seek compensation.

ICSID and ICC have since ruled in favor of the Philippines after the Supreme Court nullified the government’s contract with Piatco.

Last August, the third division of the Court of Appeals (CA) ordered the government to pay Piatco $371 million, including a 6% annual interest, as just compensation for the takeover of NAIA-3.

This was an amendment to the 2011 decision of the Pasay City Regional Trial Court (RTC) Branch 117, which pegged the just compensation at $116.35 million.

But former Transportation now Local Interior Secretary Manuel A. Roxas II earlier said subsequent government negotiations with Takenaka resulted in both parties agreeing that the Japanese firm would just execute the airport system project, instead of getting compensation.

Mr. Roxas had earlier said talks with Takenaka had been made possible after a Pasay City court allowed the government to set up an escrow account to pay contractors behind the project.

Once NAIA-3 is fully operational, a portion of NAIA-1 operations will be transferred to the new facility in order to decongest the ageing main airport, which is presently undergoing structural rehabilitation.

Currently, only a third of NAIA-3 is equipped with airport systems and only half of the terminal is being utilized, Octavio F. Lina, NAIA-3 terminal manager, had said in November last year.

The DoTC earlier said completion of NAIA-3 coincides with other projects aimed at enhancing the quality and safety of Philippine aviation.

These include the adoption of a world-class aviation CNS/ATM (Communications, Navigation, and Surveillance/Air Traffic Management) System, which will be fully operational by November 2015.

Other improvement projects for various airports across the country are the P434.5-million Upgrading of Night Landing Operations Project, and the P258.9-million Installation/Upgrading of Airfield Lighting Systems and Upgrading of Power Supply Systems Project. -- Lorenz Christoffer S. Marasigan

source:  Businessworld

PPA to develop 8 tourism ports

The Philippine Ports Authority has lined up several infrastructure projects to support the booming cruise tourism in the country, its chief said Monday.

PPA general manager Juan Sta. Ana said the cruise port development would support the country’s status as one of the major cruise destinations in Asia.

Star Cruises-owned Super Star Gemini recently stopped at Pier 15 Super Terminal in South Harbor, Port Area, Manila from its home port in Xiamen, China.

This was the first time the Philippines was included in a major cruise package. The package included regular stops in Boracay and Manila, Sta. Ana said.

“The Philippines welcomes this growing interest in cruise tourism in various strategic locations in the country,” he said.

Several cruise calls have been recorded since March 2010, including a German cruise ship docking at the Iloilo Port, MV Princess Danae, a Portuguese luxury cruise ship, in Davao Port, and recently, the Royal Carribean’s Legend of the Seas which docked at the Port of Puerto Princesa for the first time as part of the cruise ship’s seven-night “Borneo Explorer Cruise.”

“In coordination and partnership with the Department of Tourism and other government agencies, we identified eight ports as tourism gateways aimed at developing international hubs for cruise liners that include Davao, Bohol, Boracay, Cebu, Metro Manila, Puerto Princesa, Subic, and Zamboanga. These make up the nation’s major nautical cruise arteries,” Sta. Ana said.

“In addition, we have lined up various port development programs for the development of cruise terminals. These include the Ports of Puerto Princesa, Currimao in Ilocos Norte and Catagbacan in Bohol province,” he said.

Govt sweetens LRT 1 deal

The Transportation Department disclosed on Monday the enhanced bidding terms for P60-billion Light Rail Transit Line 1 extension project to Cavite, which now passes the financial risks from the private sector to the government.

Transportation Secretary Joseph Emilio Abaya said the agency would accept “negative bid” from prospective bidders for the project, whose auction in August was declared a failure, after interested companies found the concession agreement risky for investors.

A negative bid means the government would shoulder the risks and most of the cost of the project.
Abaya said the “negative bid” was a part of the amended concession agreement, which would be presented to the National Economic and Development Authority board for approval.

“Allowing a negative bid means that the government will pay the winning proponent with the lowest negative bid. But it does not stop bidders to offer positive bid. So between a negative bid and a positive bid, the government will accept the positive bid since they will pay the government of an X amount,” Abaya told reporters in a news briefing.

He said the mechanism was similar to the one used in the P15-billion Ninoy Aquino International Airport Expressway project where the two proponents submitted upfront payments to the government.
Abaya said aside from allowing a negative bid, the government also agreed to subsidize power rate spikes beyond the reasonable range set by the agency.

“It’s a protection for the concessionaire against unanticipated spike of power rates,” Abaya said.
The government also agreed to bear real property taxes, ensure the integrity of the LRT 1 structure for two years and allow the winning bidder to impose a 5-percent increase in fare upon the completion of the project.

“If anything happens to the existing structure [within two years], the government will shoulder the costs. The winning bidder will operate and maintain the existing structure even they are yet to start the construction of the Cavite extension,” Abaya said.

He said with the improvements in the concession agreement, more groups were expected to join the bidding. “We hope that same players would still be interested and hopefully there would be new players,” he added.
The previously pre-qualified bidders were Light Rail Manila Consortium, a joint venture between the Ayala Group and Metro Pacific Investment Corp.; San Miguel’s SMC Infra Resources Inc.; DMCI Holdings Inc.; and MTD-Samsung Consortium of Malaysia and Korea.
 
The Cavite extension project will extend the existing 20.7-kilometer LRT Line 1 system, which runs from Roosevelt Avenue in Quezon City to Baclaran in Parañaque, by an additional 11.7 km southward to Bacoor, Cavite.

Once operational, the new line will increase the number of passengers at LRT-1 from 500,000 to 700,000 passengers a day.

source:  Manila Standard

Expressway connector project okayed

A P26.5-billion elevated road project that will link the North and South Luzon expressways (NLEx/SLEx) and help decongest Metro Manila has been cleared by the government.

The contract for the Skyway 3 project was approved by President Benigno S. C. Aquino III last Thursday, Sec. Ramon A. Carandang of the Presidential Communications Development and Strategic Planning Office said on Friday.

"We have approved the supplemental toll agreement ... this will pave the way for the construction of the connector road," Mr. Carandang said.

Proposed by San Miguel Corp. and Indonesia’s Citra Group, the 14-kilometer, six-lane, elevated tollway will be built parallel to Epifanio de los Santos Ave. (EDSA), with exits at Gil Puyat Ave., Quirino Ave., Plaza Dilao, Aurora Blvd., E. Rodriguez Ave., Quezon Blvd., Sgt. Rivera, and Balintawak, according to earlier reports.

The Transportation department, in a statement on Friday, said the project would be funded by Citra Central Expressway Corp. "[P]reparatory and advance works will commence before the end of this year," it said, with the project expected to be completed in three years. Round the clock construction is scheduled to begin by the second quarter of next year.

Once built, Skyway 3 is expected to help decongest EDSA and other major roads in the metropolis and will reduce the travel time from Buendia to Balintawak to 15 minutes from the usual two hours, the department claimed.

"[The] DoTC (Department of Transportation and Communications) along with DPWH (Department of Public Works and Highways), MMDA (Metropolitan Manila Development Authority) and local governments of Makati, Manila and Quezon City will surely coordinate and do its best to minimize traffic inconvenience throughout the route of the project," Transportation Secretary Joseph Emilio A. Abaya said in the statement.

"Our president is committed to build infrastructure that will ease the worsening traffic congestion and to enhance economic opportunities," he added. "Other projects such as the construction of the Tarlac to La Union expressway (TPLEx) and the widening and improvement of the Batangas expressway (STAR) are ongoing."

Still to be approved by Mr. Aquino is a similar NLEx-SLEx connector project proposed by Metro Pacific Investments Corp. (MPIC), which involves construction of a 13.4-kilometer, four-lane expressway spanning the Philippine National Railway lines from Caloocan City to Makati City at a cost of P23 billion.

MPIC is the local unit of Hong Kong’s First Pacific Co. Ltd., which partly owns Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld.

source:  Businessworld

School building deals inked

MEGAWIDE CONSTRUCTION Corp. and the BSP & Co.-Vicente T. Lao Construction consortium have been formally awarded contracts for school building projects offered under the government’s public-private partnership (PPP) program.

The deals were signed on Thursday, the PPP Center announced. Both were notified earlier this month that they had won two of the PPP School Infrastructure Program Phase II’s (PSIP-II) five contracts. The three other packages will now be "undertaken through [the] regular procurement process," the PPP Center said.

Four companies had prequalified for the P8.8-billion PSIP-II: Megawide, BSP & Co.-Vicente T. Lao, the D. M. Wenceslao and Associates, Inc.-DATEM consortium and the Bright Future-Riverbanks group. D.M. Wenceslao-DATEM later withdrew while Bright Future-Riverbanks bid for two packages but did not pass a technical evaluation.

Megawide offered P2.255 billion to construct 2,440 classrooms in 982 schools in the Ilocos, Cagayan Valley, Central Luzon and Cordillera regions. BSP & Co.-Vicente T. Lao, meanwhile, bid P1,603 billion for 1,930 classrooms in 750 schools in the Northern Mindanao and Caraga regions.

Given the devastating quake that hit Bohol and Cebu earlier this week, the PPP Center said both contractors would ensure that the classrooms are quake-resistant and not built in disaster-prone areas.

The contracted 4,370 one- and two-storey facilities represent less than half the 10,679 the Education department wants constructed under the PSIP-II. The remaining 6,309 facilities are supposed to be built across 2,925 schools in the MIMAROPA, Bicol, Western Visayas, Central Visayas, Eastern Visayas, Zamboanga Peninsula, Davao and SOCCSKSARGEN regions.

source:  Businessworld