November 18, 2016

Unbundling of approved airport projects, ICC guidelines for China-assisted projects gets nod

MANILA – In its second meeting under the administration of President Rodrigo R. Duterte, the National Economic and Development Authority (NEDA) Board confirmed the approval of eight projects on November 14, 2016.

“In our move towards reinvigorating the agricultural and rural enterprise productivity, the approved projects on agriculture, irrigation, and transportation will definitely help us achieve our development goals. Moreover, this approval will continue our efforts in increasing infrastructure spending towards 5.0 percent of the Gross Domestic Product,” said Socioeconomic Planning Secretary Ernesto M. Pernia.

In addition, the NEDA Board also approved the proposal of the Department of Transportation to unbundle airport projects that were earlier approved by the NEDA Board in 2014, as well as the proposed guidelines to be applied for the processing of China-assisted projects under the ICC.

The eight projects approved by the NEDA Board are the following:

1. Scaling Up of the Second Cordillera Highlands Agricultural Resources Management Project (CHARMP 2) of the Department of Agriculture.  The proposal is to scale up the project to cover 18 new barangays in 18 municipalities covered by the ongoing CHARMP 2 in the Cordillera Region, plus 9 barangays already covered under CHARMP 2.  The project is expected to improve the gross value added (GVA) in the Cordillera region’s agricultural sector by capitalizing on the region’s comparative advantage as producer of semi-temperate vegetables, cutflowers, sub-tropical fruits and high-value crops like coffee.

In order to achieve this objective, the project will assist local barangays in participatory investment planning with stakeholders, mobilize and facilitate access to livelihood assistance funds for farmers, and provide small infrastructure projects needed by target barangay beneficiaries.

The project’s total estimated cost is PhP601.09 million and shall be implemented by DA up to December 2018 with the development support from the International Fund for Agricultural Development (IFAD).

2. Expansion of the Philippine Rural Development Project (PRDP) also of DA. The project will expand the existing Philippine Rural Development Project, with World Bank participation, to increase its program for agricultural infrastructure support.  The project supports the enhancement of farm and fishery productivity in 16 Regions and 80 Provinces across the country.  The expansion will increase the current program of agricultural infrastructure sub-projects as follows:

  1. 206 (to a total 386) farm-to-market roads,
  2. 24 (to a total 44) farm-to-market roads with bridges,
  3. 2 (to a total 8) rural road bridges,
  4. 5 (to a total 7) communal irrigation systems,
  5. 17 (to a total 27) level-2 potable water supply systems, and
  6. 65 (to a total 129) other agricultural support infrastructures.

The project’s total estimated cost is PhP20.925 billion and is expected to be completed by October 2020, which is still within the earlier-approved timeline of the original PRDP.

3. Improvement/ Widening of General Luis Road (Quezon City to Valenzuela City) Project  of the Department of Public Works and Highways (DPWH).  The project is expected to resolve the traffic situation in the target road network, which runs from Quirino Highway in Quezon City to Gen. MacArthur Highway in Valenzuela City.  This will facilitate easing out the movement of traffic through three major cities in the NCR, which is, the Cities of Quezon, Caloocan, and Valenzuela.

The total length of road to be improved or widened is 8.98 kilometers.  The project intends to expand the carriage ways of the road network, and also intends to rehabilitate three short bridges along the road network which are located in Malinta, Paseo de Blas, and Maysan in Valenzuela City.

Estimated project cost assuming a 24/7 work schedule is PhP2.956 billion (PhP2.814 billion if a regular work schedule is adopted).  With a 24/7 work schedule, the project is expected to be implemented from January 2018 – January 2019.  DPWH is implementing this project through the Philippine Government’s own funds through the General Appropriations Act.

4. Plaridel Bypass Road Project also of DPWH.  The project will upgrade the 23.3 kilometer Plaridel Bypass road by expanding its carriageway from 2 lanes to 4 lanes.  The project also includes the construction of accompanying road infrastructures along the road network such as bridges, interchanges, overpasses and an intersection.  The road works will start from NLEX Burol Interchange Toll Plaza and extends to the Pan-Philippine Highway in San Rafael, Bulacan.

The project’s total estimated cost is PhP10.496 billion, funded through the Philippine Government’s own funds through the General Appropriations Act, with an implementation period of three years.

5. New Cebu International Container Port Project of the Department of Transportation (DOTr) / Cebu Ports Authority.  The project involves the construction of a new sea port in Consolacion, Cebu given that the existing Cebu International Port (CIP) in Cebu City is already congested at a utilization rate of 97%.  The existing CIP is proposed to be used for general and break-bulk cargo.  The project is expected to reduce vessel waiting time and increase container yard capacity from the current 7,373 TEUs to 14,400 twenty-foot equivalent units or TEUs.  The proposed site of the new sea port is in Barangay Tayud in Consolacion, Cebu.  The port will be constructed offshore on a reclaimed 25 hectare island.

The project’s total estimated cost is PhP9.2 billion and is expected to be implemented from the 3rd quarter of 2017 to the 2nd quarter of 2020.  The Philippine Government will explore South Korean development assistance for the project.

6. North-South Railway – South Line Project of the DOTr.  The proposed railway upgrade is composed of two Public-Private Partnership (PPP) projects:

Project 1 – Commuter Line operating between Tutuban to Calamba using Build-Gradual Transfer Operate-and-Maintain (BGTOM) contractual arrangement (approximately 54 kms).

Project 2 – Long Haul Line operating between Calamba to Sorsogon, with branch from Calamba to Batangas City using Build-Transfer (BT) contractual arrangement (580 kms total).

The NEDA Board approved the following DOTr proposal subject to refinement of project cost estimates based on ongoing technical studies:

  1. Shift from rehabilitation of old PNR tracks and structures to full reconstruction of the South Commuter Line from Manila to Calamba (including CAPEX and OPEX to Los     Banos depot);
  2. Shift from narrow to standard gauge tracks;
  3. Increase in ROW acquisition and resettlement cost to accommodate the updated number of households affected by the project and ROW adjustment to identify optimal alignment and accommodate freight service in the future;
  4. Phased implementation of South Long-haul components; and
  5. Requirement for single PPP operator to ensure seamless and integrated train operations from the entire commuter line.

The North-South Railway – South Line Project’s total estimated cost is PhP170.699 billion.

7. Malitubog-Maridagao Irrigation Project, Stage 2 of the National Irrigation Administration.  The NEDA approved the proposed changes in project scope, cost, and mode of financing.  The project is an ongoing irrigation project located in North Cotabato and the Maguidanao area. The project will divert irrigation water from Maridagao River to deliver timely and adequate irrigation water to 9,784 hectares of agricultural lands.

The estimated total cost of the project is PhP5.444 billion.  Upon approval the project is expected to be completed by 2018.  The Philippine Government will explore Japanese development cooperation in support of the project, through the Japan International Cooperation Agency (JICA).

8. New Nayong Pilipino at Entertainment City of the Department of Tourism.  The PPP project involves the design, construction, operation and maintenance of a theme park located at the Entertainment City in the reclaimed Manila Bay area.  The project includes putting up themed zones, historical and cultural attractions, recreational and retail attractions, including administration and site support and parking facilities.

The project’s total estimated cost is PhP1.473 billion.  The concession period is for 20 years, exclusive of construction period.  The project is planned to be rolled out for procurement in December 2016.

Apart from the projects, the NEDA Board also approved the proposal of the Department of Transportation to unbundle five of its airport projects that were approved by the NEDA Board in 2014 under Public-Private Partnership (PPP) scheme.  The rationale for the proposal is to expedite early completion of PPP selection and award.  The five projects, which all involve operation and maintenance (O&M), have a combined cost of PhP108.180 billion.  These five PPP airport projects are the: (i) Iloilo Airport Development O&M Project, (ii) Bacolod Airport Development, O&M Project, (iii) Laguindingan Airport Development, O&M Project, (iv) Davao Airport Development, O&M Project, and the (v) New Bohol (Panglao) Airport Development, O&M Project.

Lastly, the NEDA Board also approved the proposed ICC Guidelines on Processing China-assisted Projects, which details the guidelines and procedures for processing project proposals, for ICC review and approval, which require the availment of Chinese support for the conduct of pre-investment and investment activities.  The rationale of the proposal is to establish a single clearing house, which is the ICC, for the expected influx of projects or investments proposed to be supported by China.