Investors sought for ITS-South PPP deal

THE GOVERNMENT yesterday rolled out a new public-private partnership (PPP) project, inviting interested parties to bid for a P4-billion contract to build and operate an integrated transport terminal in the south of Metro Manila.

Prequalification documents for the Integrated Transport System (ITS)-South Terminal deal will be available beginning Aug. 6. An auction date has yet to be set.

Bidding for the 35-year contract is open to all interested investors, whether local or foreign, subject to eligibility conditions under the Build-Operate-Transfer law. Foreign companies, however, are barred from the operations component given the constitution’s owership restrictions.

At least one firm among those that have participated in previous PPP auctions has expressed interest. DMCI Holdings, Inc. President and CEO Isidro A. Consunji said, “We intend to bid with Metro Pac[ific] Investments Corp. and SM Prime [Holdings, Inc.].”

Meanwhile, AC Infrastructure Holdings, Corp. President John Eric T. Francia said, “We will look into the project first and decide later.” MTD Philippines, Inc. President Isaac S. David said, “Considering that the site is on Ayala’s turf, Food Terminal, Inc. (FTI)... I think it is designed for them to undertake.”

The ITS-South project, which will be located near FTI -- won by Ayala Land, Inc. in a 2102 privatization auction, involves the construction of central facility that will connect passengers from Laguna and Batangas to other urban transport systems, such as the future North-South Commuter Rail, buses, taxis and other public utility vehicles that serve inner Metro Manila. -- C. J. V. Dela Paz

source:  Businessworld

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Aquino: More PPP projects awarded than past 3 admins

President Aquino says they've awarded more PPP projects than the past 3 administrations

MANILA, Philippines – The Aquino administration has awarded 7 public-private partnership projects (PPPs) versus the 6 solicited PPPs implemented by the previous 3 administrations.

President Benigno Aquino III boasted of this accomplishment in his 5th State of the Nation Address on Monday, July 28.

He stressed that sound infrastructure is needed for the Philippine economy to continue moving forward, be more competitive, accelerate the flow of goods and services, and attract attract more investors.

Image from https://twitter.com/govph

The President reported a significant increase in infrastructure budget to P404.3 billion ($9.31 billion*) from P200.3 billion ($4.61 billion) in 2011.

He said such increase did not require hike in taxes, except for the Sin Tax Reform Law.

7 PPP projects awarded

To date, the Aquino administration has awarded 7 PPP projects worth about P62.6 billion ($1.44 billion). These include:

• Daang Hari-South Luzon Expressway Link - P2 billion ($46.11 million)
• PPP for School Infrastructure Project (PSIP) Phase 1 - P8.86 billion ($204.29 million)
• PSIP Phase 2 - P16.28 billion ($375.38 million)
• Philippine Orthopedic Center modernization - P5.98 billion ($137.88 million)
• Ninoy Aquino International Airport Expressway - P15.52 billion ($357.85 million)
• Automated Fare Collection System (AFCS) - P1.72 billion ($39.66 million)
• Mactan-Cebu International Airport Expansion - P17.5 billion ($403.58 million)

The bidding for the most expensive PPP project to date – the National Economic and Development Authority (NEDA) Board-approved, P123-billion ($2.84 billion) Laguna Lakeshore Expressway Dike – will also be opened before 2014 ends. The project will be bid out under the Build-Operate-Transfer and is expected to reduce traffic and flooding in southern Metro Manila and Laguna with the construction of a 47-kilometer flood control dike on top of a 6-lane expressway.

There are more companies now willing to invest in the country through the PPP program, easing the burden on government expenditures, Aquino said.

He attributed this interest in shortened application procedures and decreasing opportunities for bribery in project biddings.

He said the Department of Public Works and Highways (DPWH) saved P28 billion ($646 million) after hastening the implementation of projects.

More infra projects nearing completion

Aquino also mentioned that the Puerto Princesa and Busuanga airports are underway.

He said the government was also able to get good offers for the Mactan-Cebu International Airport expansion project worth P14 billion ($322.92 million), and the NAIA Expressway Project Phase 2 worth P11 billion ($253.63 million).

Also, the DPWH has completed 12,184 kilometers of roads – fixed, paved, or widened – the same length as 4 national roads connecting Laoag and Zamboanga City.

The Tarlac-Pangasinan Expressway project is now facilitating traffic from Tarlac to Rosales, Pangasinan. The Urdaneta portion is expected to be completed before 2014 ends, while the expressway will reach La Union by next year.

Projects that took decades to complete are now seeing completion, Aquino said. They include:

• Aluling Bridge, which was conceptualized in 1978
• Metro Manila Skyway Stage 3, which also started in the 70s
• Ternate-Nasugbu Road, the plan for which was laid down in 1994
• Basilan Circumferential Road, which was under construction since 2000

NEDA board-approved projects

Once the C-6 road connecting to San Jose Del Monte, Bulacan is finished, it is expected to decongest traffic in EDSA.

To address the water shortage in Metro Manila by 2021, the Aquino administration approved the Kaliwa Dam Project in General Nakar, Quezon, and the repair of the lines of Angat Dam. The Water District Development Sector Project, under the Local Water Utilities Administration, has also been approved.

Other NEDA board-approved projects in the pipeline include the Laoag City Bypass Link Road project, the Cebu Bus Rapid Transit project, and the Light Rail Transit (LRT) Line 1 South Extension and Line 2 East Extension projects.

The modern Clark Green City in Capas, Tarlac has also been approved. The project is expected to boost commerce in Central Luzon and the rest of the country. This once desolated vast piece of land is seen to be the next, if not better than, Bonifacio Global City, the President said.

“These are only of the few infrastructure projects that we have no plans to pass to the next administration as problems, instead, they are now started to being enjoyed by our bosses, the Filipino people,” Aquino stressed in Filipino. – With a report from Lynda C. Corpuz/Rappler.com

Businessmen’s SONA 'wishes'

As President Aquino delivers his 5th SONA on July 28, businessmen say their top 3 wishes are improved competitiveness, increased foreign direct investments, and more jobs

 

MANILA, Philippines – Business groups have a “wish list” for the 5^th State of the Nation Address of President Benigno Aquino III on Monday, July 28.

They want the President to discuss how he plans to improve competitiveness, increase foreign direct investment, and generate more jobs in the last years of his term.

Sergio Ortiz-Luis, president of the Philippine Exporters Confederation, urged Aquino to focus on those issues and use the remaining two years to fast-track reforms, particularly in infrastructure.

Edgardo Lacson, president of the Employers Confederation of the Philippines, said they want stable power supply at competitive cost; accelerated infrastructure; food security; peaceful resolution of the territorial dispute with China; unifying statement that will restore the respect to the 3 co-equal branches of government; sustainable inclusive growth via job creation to address poverty problem; sustained gross domestic product (GDP) growth up to 2016; increased FDI inflows through enlightened and stable policies and; total and lasting peace in Mindanao and a final solution to the insurgency problem caused by the New People’s Army.

Peter Perfecto, executive director of the Makati Business Club (MBC), said the group hopes Aquino would keep his promise of good governance and integrity; focus on inclusive growth, infrastructure development, energy security and foreign investments; and curb smuggling.

He said the MBC believes that it would be best for the President to declare the Freedom of Information bill as an urgent measure. He added Aquino should issue an executive order in support of the Integrity Initiative, an undertaking of MBC and other business groups promoting good corporate governance and business transparency.

Greg Navarro, president of the Management Association of the Philippines, said Aquino should prioritize liberalization of foreign investments; acceleration of infrastructure projects, new energy plants, and investments in agriculture where majority earn their livelihood; customs modernization; fiscal incentives rationalization; and crafting of manufacturing and other industry roadmaps.

Jesus Arranza, chair of the Federation of Philippine Industries, said that the President should concentrate on manufacturing and encourage consumption of locally made goods rather than imported ones.

Jose “Joey” Concepcion III, Go Negosyo founder and CEO and president of RFM Corporation, hopes that the President would address problems in “hard” infrastructure, including public-private partnership projects. He said port congestion should also be dealt with immediately because if not, the next 6 months would be difficult for exporting and importing businesses.

Jaime Alip, founder and managing director of the Center for Agriculture and Rural Development Mutually Reinforcing Institution, said the President should promote the agricultural secto, small and medium enterprises, and microfinance for poverty alleviation.

Tennyson Chen, founder and president and chairman of Bounty Agro Ventures, said the President should provide measures to protect agriculture by 2015 in light of the Association of Southeast Asian integration. – with reports from Mick Basa/Rappler.com

sourcE:  Rappler

Valenzuela issues JV guide

THE CITY of Valenzuela has issued guidelines it hopes would spur private sector investments that could help prod development.

Ordinance No. 140, series of 2014 -- signed into law last July 14 by Mayor Rexlon T. Gatchalian and published in a newspaper last July 21 -- outlined requirements and procedures for joint ventures (JV) between the city and private sector partners.

The city cited the need for such a local law since “a joint venture is not a variant under Republic Act (RA) No. 6957, as amended by RA 7718 -- popularly known as the Build-Operate-Transfer law -- and does not involve procurement as defined under RA 9184 or the Government Procurement Act” and because “joint ventures by local government units are excluded from the coverage of the 2013 and 2008 Joint Venture Guidelines issued by the National Economic and Development Authority (NEDA)”.

The law -- titled “The Joint Venture Ordinance of Valenzuela City” -- also noted that the Justice as well as Interior and Local Government departments, in separate opinions in 2012 and earlier this year, confirmed “the absence of a detailed statute and framework on local government unit joint ventures...”

Sought for comment, Mr. Gatchalian said in a telephone interview last July 21: “We enacted this because we wanted to keep our options open and unlock the potential value of PPPs (public-private partnerships), of partnering with the private sector for the city.”

“We went to the PPP Center and NEDA recently and what we have now is patterned after the template of guidelines they gave us,” Mr. Gatchalian added.

According to the ordinance, the city government may enter into joint ventures with private sector partners for projects within city limits, and even outside this boundary provided projects concerned help city inhabitants.

The local law also specifies modes of participation by the city government in joint ventures with the private sector, as well as sources of funding like its Internal Revenue Allotment -- or its share in national government tax collections -- as well as Special Education Fund when the project is education-related and Calamity Fund when disaster response is involved.

Projects covered should involve infrastructure, other development as well as service-related projects “which are traditionally or not traditionally provided or supplied by the City”. The list, the ordinance said, includes power plants including hydroelectric projects; dams; highways; airports and sea ports; canals; drainage systems; water supply; sewerage; irrigation; telecommunications; railways; other transport systems; land reclamation; dredging; industrial estates or townships; housing; buildings; tourism projects; markets; slaughterhouses; solid waste management; information technology networks and database infrastructure; education and school facilities; prisons; hospitals and health services; memorial parks and services; parking structures and traffic management; material testing; zoos, parks and plazas; sports, leisure gaming and recreational facilities; cockpits; theaters; as well as “any of the devolved activities under Section 17 of the Local Government Code of 1991”.

It added that private sector proponents, and the facility operator if it is separate, must be at least 60% Filipino-owned in case projects require public utility franchise, but clarified that those that do not require such franchise may be majority foreign-owned.

Joint venture projects will undergo auction or, in the case of an unsolicited proposal, Swiss Challenge under which the city will invite other interested parties to submit comparative proposals.

The city will resort to direct negotiations in case an auction yields only one complying bidder.

The ordinance also set the deadlines for pre-qualification of interested parties; pre-bid conference; recommendation, decision and notice of award; as well as execution, submission and ratification of joint venture agreements, besides defining requirements for prequalification, for technical proposals, and for bid submission, among others.

It also set bid security to be specified in technical proposals at 3% of project cost if less than P100 million; 2.5% of project cost or P3 million -- whichever is higher -- if cost is P100 million to less than P500 million; 2% of project cost or P12.5 million -- whichever is higher -- for P500 million to less than P1 billion; 1.5% of project cost or P20 million, whichever is higher, for P1 billion to less than P5 billion; and 1% of project cost or P75 million, whichever is higher, for those worth at least P5 billion.

The mayor, “upon recommendation of the Bids and Awards Committee, may issue” implementing rules and regulations for the ordinance, which itself takes effect 15 calendar days after publication in at least two newspapers.

source:  Businessworld

Next government to inherit fewer PPP headaches

A LEGISLATIVE MEASURE meant to end the problems that dogged President Benigno S.C. Aquino III's key infrastructure program is expected to be passed by Congress by the first semester of 2015, an official of the Public-Private Partnership (PPP) Center said.

A successful passage of that law -- sponsored by Mr. Aquino's key allies in Congress -- may prove to be of little use to a presidency left with only a few months in office by then, but still, Mr. Aquino would be leaving a framework that will help the next government pick up from where he left off, and with fewer headaches.

Sustaining the PPP


A staunch advocate of the proposed “Public-Private Partnership (PPP) Act of the Philippines” is the PPP Center, which pitched the bill as something that would ensure the PPP program would be a continuing legacy.


“Now our main challenge is ‘how do we sustain the PPP program?’ The first identified step is to amend Republic Act No. 7718 or the BOT [Build-Operate-Transfer] Law,” PPP Center Deputy Executive Director Sherry Ann N. Austria said at a July 18 economic forum hosted by BusinessWorld.

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Sustaining the Philippine PPP program, hailed by global institutions as a model other economies should emulate, is crucial to drawing direct investments, creating jobs and consequently, greasing the economy that has graduated from being the “sick man of Asia” to being the “next Asian miracle.”


Aquino's departure meant unfinished business -- either because the projects have yet to hurdle the complex layers of the approval process or because they face legal questions.

Already, the incumbent government has trimmed its target list of completed PPP projects to just five before Mr. Aquino steps down from power, from a goal of seven 100% done, as existing regulations were unable to shield some contracts from administrative cases or even lawsuits.

Those five projects -- already broken ground and expected to be fully complete by 2016 -- according to PPP Center Executive Director Cosette V. Canilao, are the following:


• The P16.28-billion School Infrastructure Project (Phase I);
• The P3.86-billion School Infrastructure Project (Phase II);
• 
The P15.5-bilion Ninoy Aquino International Airport Expressway;

• The P2-billion Daang Hari-South Luzon Expressway; and
• 
The P1.7-billion Automatic Fare Collection System

Removed from the original list were the P5.7-billion contract to modernize the Philippine Orthopedic Center, and P17.5-billion project to upgrade the Mactan-Cebu International Airport (MCIA).

Both contracts were already awarded but the Orthopedic Center’s modernization project hit a roadblock when activist groups, health workers and party-list organizations filed a petition questioning the hospital’s privatization.


The Mactan airport project, meanwhile, stalled when losing bidder Filinvest-Changi consortium filed a complaint against winning bidder GMR-Megawide consortium, alleging conflict of interest.

Ms. Canilao told BusinessWorld, in an interview in Makati City in May
, that the orthopedic hospital and MCIA projects should instead be halfway done by the time the next administration steps in.

The proposed PPP law hopes to address the loopholes existing regulations failed to plug.

“Certain policy gaps can only be addressed by legislative amendments,”
Ms. Austria said at the forum.


“The amendments to the BOT law have been identified as one of the
 priority bills, and hopefully, we'll be able to have it passed by 
first semester of next year,” Ms. Austria added.

“Except the Supreme Court”

The proposed bill inserts a provision that bars trial courts from stopping PPP projects, raising a few eyebrows.

“The proposed amendments of the bill include the following: … (i) Prohibiting the issuance by courts of temporary restraining orders, preliminary injunction or preliminary mandatory injunction against all PPP projects, except the Supreme Court but with a validity period on only six months,” the bill read.

Political analyst Ramon C. Casiple has misgivings over blanket provisions for PPP deals.

“The rationale is for PPP projects to be shielded from nuisance lawsuits. If you go to the Supreme Court, you must have good arguments or the SC will just ignore your petition. That will avoid challenges to the PPP bidding process and also to implementation,” Mr. Casiple said in a phone interview.

“But this is a blanket immunity. It should be limited only to those projects considered by the NEDA [National Economic and Development Authority] of national importance. Otherwise, you're talking of possible abuse by those in power or businessmen going into PPP,” he pointed out.

Right of way, property tax issues niggle

Two sticky issues the bill targets to resolve are right of way and property taxes.

Those two were the main concerns raised by investors that tried to compete for the P64.9-billion Light Rail Transit Line 1 Cavite Extension project -- the largest PPP deal so far bid out.

The government failed in its first attempt to bid out the LRT-1 project, and attracted just one bidder the second time around.

The legislative measure dictates that valuations for property that will be affected by a PPP project be based on updated estimates by the Bureau of Internal Revenue, the Assessor’s office of the municipal government and a government bank.

“One of the major bottlenecks in implementing a PPP project right now 
is the acquisition of right of way (ROW),” Ms. Austria said, although she and government officials could not immediately give information as to how much it would cost government to buy out affected landowners.

“The major deterrent is under the existing RA [Republic Act] 8974, wherein the default mode is negotiation but, on the part of the government, we
 cannot offer a huge amount because under the law only the zonal value
 can be offered,” she explained, noting that “owners will not
 accept [the offer] because it's very low and the zonal values are not
 updated.”

Data from the PPP Center showed that 92.3% of the right-of-way acquisition requirement for the railway’s Baclaran-to-Dr. A. Santos segment was completed; 69.2% for the Dr. A. Santos-to-Zapote segment; and 84.2% of the Zapote-to-Niog segment.

The P35.4-billion Cavite-Laguna Expressway project, put on ice after rivaling bidders filed an appeal before Malacanang, also faced right of way issues, according to Special Bid Bulletin 14 issued by the Public Works and Highways department.

The bill pushes for the exemption of projects “of national significance” from all local and real property taxes as a sweetener that will lessen the bitter taste of risks tied to PPP projects.

“There are certain provisions that can only be cured or can only be
 addressed by legislative amendments. For instance, most of the local
 government units have been imposing local or real property tax and
 another local taxes on projects of national significance,” Ms. Austria
 said at the forum.

Projects of national significance, as defined by the PPP Center, are those that are able to “generate employment opportunities and follow the Investment
 Coordination Committee (ICC) prescribed parameters.”

Beyond 2016

Other provisions of the proposed PPP law include: treatment of unsolicited proposals, institutionalizing a pool that the government can tap for financing, and amending the franchise of the Philippine National Construction Corp. as the operator of the Nlex and Slex.

The bill also prohibits regulatory bodies from entering into any PPP contract that they regulate.

That jibes with a recommendation by the World Economic Forum (WEF) for the Philippine government to separate the functions of the agencies involved in PPP projects.

“The point here is to establish entities with separate authorities (i.e. policy-making, contracting, monitoring, and dispute resolution) with a clear governance structure in order to avoid any conflict of interests, and to have clear responsibilities and competencies,” Hanseul Kim, associate director and head of engineering and construction industry of the WEF, said in an e-mail interview with BusinessWorld in May.

The wisdom in that statement is obvious.

“This way, authorities can be independent from the political influence or other externalities, and be able to carry out long-term infrastructure plans, often over 10-20 years, that generally exceeds more volatile political duration,” Mr. Kim added.

The PPP bill may be an afterthought since the Aquino administration failed to deliver on its promise to boost the economy with its centerpiece program.

But its passage also means the next administration won't inherit the problems that Mr. Aquino's PPP program struggled with.

With the passage too, Mr. Aquino has made sure his centerpiece program would outlast his term.
 
source:  Businessworld

NAIA-3 fully operational July 31

TERMINAL THREE of Ninoy Aquino International Airport (NAIA-3) should be fully operational starting July 31, 17 years after the government awarded its concession agreement, the Transport department said in a statement yesterday.

“We are extremely pleased to confirm that full airline operations will begin at NAIA Terminal 3 next week,” the statement quoted Transportation Secretary Joseph Emilio A. Abaya as saying.

“Our gateway airport will now be able to welcome 3.5 million more passengers... every year, and Terminal 1 will now be considerably decongested to improve passenger convenience,” he added.

Mr. Abaya said the Manila International Airport Authority had informed the department “that Delta Airlines will have its first flight out of Terminal 3 on Aug. 1,” followed by KLM Royal Dutch Airlines “within the first week of August” as well as Singapore Airlines, Emirates and Cathay Pacific “by the end of next month.”

“These five carriers have the highest volume of international flights coming in and out of NAIA, so we look forward to giving them a new home,” Mr. Abaya said.

The project, given to Takenaka Corp. in 1997, was to have been completed in 2002; but legal issues delayed opening to 2008 and then when it was 52% operational. In August 2013, Takenaka agreed to a $40-million deal to finish the job.

source:  Businessworld

‘Facebook Middle Class’ prompts investor rethink

LONDON -- Middle-class anger at not seeing enough of the fruits of economic growth is growing in developing economies, and that anger is forcing the world’s biggest investors to rethink how they rank emerging markets.

Political risk has always been a fact of life for investors focused on the developing world, but many money managers are now assessing which countries have institutions and governments robust enough to stop the kind of anger boiling over into the chaos seen after the Arab Spring uprisings.

The emergence of what one investor called ‘the Facebook Middle Class’ -- aspirational but frustrated as elites soak up the gains from economic growth -- is creating a potentially explosive environment in key economies such as Brazil and China, they say.

“This middle class is waking up to the fact that the government does not offer you the schools, the roads, healthcare system, the housing that the middle class around the world gets,” said Jorge Mariscal, UBS Wealth Management’s chief investment officer of emerging markets. “It is this phenomenon that is creating enormous amounts of resentment.”

The insurance market is showing clear signs that companies with international operations are becoming more and more anxious about social discontent in particular.

Insurers are seeing a spike in demand from companies looking for policies to cover “soft” political risks -- such as heavy handed policy responses to civil disorder that damage business prospects -- as opposed to hard political risks like war, said Andrew van den Born, executive director at insurance broker Willis.

“We’re seeing growth in soft risks -- income disparity, poverty, food prices,” van den Born. “There’s been an upward trajectory in demand for this product since the Arab Spring.”

Credit insurer Coface, which covers companies against default by their clients, has placed its ratings of Turkey and Venezuela on ‘negative watch’ reflecting “political fragility.” Both have seen civil unrest.

Global managers of stocks and bonds are also growing more aware of the roots and results of such social tension. They see the extent to which it depresses economic growth over time and undercuts long-term returns. Some of them are increasingly looking at which governments are capable of reforming fast enough.

Rapid growth in the developing world has drawn millions out of poverty and created a new middle class, but inequality has simultaneously increased in countries such as China and India, the Organization for Economic Cooperation and Development said in July.

The resulting social tensions threaten to “hamper growth and lead to instability,” the OECD said.

Carl Dahlman, the head of global research at the OECD’s Development Center, warns the rising tensions endanger the flow of foreign investment, jeopardizing economic growth further still.

“When (investors) begin to see social tensions rising you do see a fallback in investment ... There’s a lot of animal spirit in these things,” he told Reuters.

Investors also note that qualitative factors such as institutional or government stability must be taken into account. Quantitative measures of inequality are not enough in isolation.

Not all investors are so gloomy Some argue that this middle class agitation in Turkey, Brazil or Chile should be seen as growing pains associated with a process that is overwhelmingly positive.

Masha Gordon, London-based Head of Emerging Market Equities at PIMCO, argues investors should also be heartened by events in India, where the election of a reform-minded government shows the new middle classes can spur change for the better. -- Reuters
 
source:  Businessworld

Business group bares blueprint for Pampanga’s development

ANGELES CITY—The Pampanga Chamber of Commerce and Industry Inc. (PamCham) has proposed a Pampanga Development Plan (PDP) to the provincial government which anchors on the Capampangan business sector’s ideas on the priority development concerns of the province from 2011 to 2020.

Rene Romero, PamCham president emeritus, told members of the media during the forum dubbed “Batirulan king Café Juan” at the Holy Angel University organized by the Capampangan in Media Inc. (Cami) in cooperation with the Clark Development Corp., Social Security System and the university, that the PDP could very well be translated into a medium-term development plan for the province.

Documents furnished by PamCham showed that the final version of the PDP consists of six chapters which included an introduction and the long-term vision for the province with a physical development framework for medium-term development challenges, medium-term priority tasks and its implementation.

Under the PDP, Romero explained that the province will be divided into four quadrants based on the congressional districts. He cited as an example the Fourth District, that was labeled as “Marine Quadrant” because “we can harvest a lot of fish there.”

He said processing plants as well as cold-storage facilities should be built at the site “because if you harvest the fish and sell it to traders from the source, there is no value-added tax there. A major portion of the harvest of fishermen should be processed in the barangay because this will contribute to the employment and generation of taxes in the locality.”

Romero said the PDP could be summed up with “prosperity for the greatest number of the people of Pampanga based on the pillars of healthy and secure population who are fully and decently employed and enjoying the fruits of economic prosperity.”

He identified the five pillars as Good Governance, Environment Protection and Conservation, Infrastructure Development, Micro and Small, Medium Enterprises Development and Human Resource or Social Development.

Romero explained that the second to the fifth pillars won’t be possible or successful without the first pillar which is good governance. “And there will be no good governance without the other four pillars,” he said.

Romero also said economic development is important among the pillars because it gives access to the people. “There should be affordable and available food on the table at least three square meals a day.”

He pointed out that the right formula is access plus convergence plus progress which is equals to improve quality of life.

“If our poor citizens don’t have access, how can they improve their lives? We should be caring and generous Filipinos,” he added.

Romero also cited the importance of a “well-managed disaster risks and mitigation measures to floods and landslides; infrastructure support to complement the Subic-Clark-Tarlac Expressway, the North Luzon Expressway, Clark International Airport and other national infrastructures and environmental sustainability which can all be achieved through efficient and effective governance.”

Romero said the bottom line is to decongest Metro Manila in favor of countryside development. He also said PamCham supports the “twin airport system” with the Ninoy Aquino International Airport and the Clark International Airport.

source:  Business Mirror

AEV sees infrastructure as key to growth

ABOITIZ Equity Ventures, Inc. (AEV) said it is banking on infrastructure development to boost its business as it expressed interest in other public-private partnership (PPP) projects.

“Participating in more PPP projects is in line with our thrust of focusing on infrastructure to grow our business, as well as our way of supporting the country’s own economic growth,” AEV President and Chief Executive Officer Erramon I. Aboitiz was quoted in a statement on Tuesday as saying.

AEV noted that it sees “infrastructure development as a focal point in growing its business.”

The listed conglomerate also anticipates the awarding of the P35.4 billion Cavite-Laguna Expressway (CALAX) to Team Orion consortium -- which is composed of Aboitiz Land, Inc. (AboitizLand), Ayala-owned AC Infrastructure Holdings Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.

Team Orion offered to pay the government an P11.66-billion premium for the CALAX project during last month’s bid opening, topping the P11.33 billion extended by Metro Pacific Investments Corp.-led MPCALA Holdings, Inc.

Malaysian-owned AlloyMTD Philippines, Inc. brought up the rear with a P922-million bid.

San Miguel Corp.’s Optimal Infrastructure Development, Inc., which was disqualified over a defective bid security, would have topped the CALAX auction with a premium payment of P20.11 billion.

On top of the PPP project, AEV was also awarded a bulk water supply contract in Davao.

AEV said it is “looking at more bulk water supply projects in other parts of the country.”

AEV, the holding firm of the Aboitiz family’s businesses, said it will invest around P88 billion for its capital expenditures (capex) this year, higher than the previous year’s P59 billion.

The bulk of the capex, amounting to P78 billion, has been allocated for Aboitiz Power Corp.’s (AboitizPower) investments.

The remainder will be used by its property (AboitizLand), banking (Union Bank of the Philippines, Inc.) and food (Pilmico Foods Corp.) subsidiaries.

AboitizPower is building a 300-megawatt (MW) coal-fired plant in a site straddling Davao City and Davao del Sur. The plant is scheduled to be operational next year.

Through Therma Visayas, Inc., it is also set to build a 300-MW coal plant in Cebu, which is targeted to be completed in the third quarter of 2017.

Scheduled to also start this year is the 420-MW expansion of the Pagbilao coal plant in Quezon, which will be done in partnership with TeaM Energy Corp.

AboitizPower is also planning to develop solar and wind projects to further expand its energy portfolio.

“We hope that our continued investments in energy infrastructure would help ease threats of a possible power supply shortfall for the country,” said Mr. Aboitiz.

Profit of AEV fell 23.96% to P6.098 billion in the first quarter from P8.019 billion. Revenues jumped 26.76% to P28.117 billion from P22.182 billion, while expenses climbed 51.86% to P21.038 billion from P13.854 billion.

AEV gained 45 centavos or 0.80% to close at P56.45 on Tuesday. -- Claire-Ann Marie C. Feliciano

source:  Businessworld

Manila airport leads in ticket incorporation of terminal fee

REPRESENTATIVES of Manila International Airport Authority (MIAA) and 33 airlines yesterday signed a memorandum of agreement to integrate the P550 international passenger service charge (IPSC) -- known also as terminal fee -- to airline tickets, which will be implemented this October.


 Michael Arthur C. Sagcal, spokesperson said in a text message: “MIAA had the memorandum of agreement signing ceremony this morning.”

A check with MIAA’s Public Affairs Department showed the 33 airlines were: Air Asia Zest; Air Asia, Inc.; Air China Ltd.; Air Niugini; Air Philippines Corp. (PAL Express); All Nippon Airways Company Ltd.; Asiana Airlines, Inc.; Cebu Air, Inc.; Cathay Pacific; China Airlines; China Eastern Company Ltd.; China Southern Airlines Company Ltd.; Dragon Airlines Ltd.; Emirates Airlines; Etihad Airlines; Gulf Air; Japan Airlines; Jeju Air; KLM Royal Dutch Airlines; Korean Airlines Company Ltd.; Malaysian Airlines System Berhad; Philippine Airlines, Inc.; Qantas Airways Ltd.; Qatar Airways; Royal Brunei SDN Berhad; Singapore Airlines Ltd.; Thai Airways; Tiger Airways Singapore Ltd.; Kuwait Airways; Jetstar Asia Airways; Saudia Airlines; United Airlines; and Eva Air.

CONGESTION
Early last month, MIAA had said integration of IPSC should help ease congestion at the Ninoy Aquino International Airport (NAIA), and free up a sizeable area after terminal fee counters are removed.

MIAA General Manager Jose Angel A. Honrado had noted “exceptions mandated by law, such as overseas Filipino workers, Muslim pilgrims and national athletes endorsed by the Philippine Sports Commission” who should not be charged the IPSC.

Children ages two years and below are also exempted from the P550 terminal fee.

The Transport department has also asked other airport authorities such as the Mactan-Cebu International Airport Authority (MCIA) and Clark International Airport Corp. to follow in NAIA’s wake in integrating the terminal fee to airline ticket costs.

The integration program will begin in October and is expected to be implemented nationwide within a year from that month.

MIAA collects the P550 terminal fee for maintenance of the airport (P390) and aviation security (P60), with P100 going to the national government.

For domestic flights from NAIA, the P200 terminal fee has been included in airline tickets since August 2012. -- CJVDP

source:  Businessworld

SM Prime loses bid for restraining order

A COURT has denied SM Prime Holdings, Inc.’s petition for a preliminary injunction in the firm’s battle to retain control over the planned Metro Rail Transit-Light Rail Transit (MRT-LRT) common station.

SM Prime said it would continue the fight to have the government recognize a deal where, in exchange for a P200-million grant, the firm was given naming rights to the station, to be located in front of the SM North EDSA Mall in Quezon City. The government, however, has said that the station will now be built in front of the nearby Ayala-owned Trinoma Mall, noting that doing so would lead to some P1 billion in savings.

A Pasay regional trial court, in denying SM Prime’s petition, cited Republic Act 8975 that prevents any tribunal, except the Supreme Court, from halting a national government project.

“SM Prime will now focus on its main and more important case, where it seeks to enforce its rights under the valid and legally binding memorandum of agreement, the existence of which has been duly admitted by both the Transportation department and Light Rail Transit Authority (LRTA) in court,” said Ryan C. San Juan, SM Prime vice-president, in a statement.

Transportation department and LRTA officials were not immediately available for comment. The department has said that it is looking to auction off the P1.4-billion Common Station project this December despite the row with SM Prime.

SOURCE:  Businessworld