Republic of the Philippines DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS
NAIA EXPRESSWAY PROJECT
Information Memorandum
June 2012
Transaction Advisors Technical Advisor With Assistance From
DPWH – NAIA Expressway Project: Information Memorandum June 2012
DISCLAIMER
This Information Memorandum (IM) has been prepared by the Development Bank of the Philippines (DBP) and the International Finance Corporation (IFC) on behalf of their client, the Department of Public Works and Highways (DPWH), in line with their mandate as Transaction Advisors to the DPWH in the development, structuring and tendering of the NAIA Expressway Project as a Solicited Transaction under the Philippine Build-Operate-Transfer (BOT) Law (or RA 6957 as amended by RA 7718).
This IM does not purport to be all-inclusive or to contain all of the information that a prospective participant may consider material or desirable in making its decision to participate in the tender.
No representation or warranty, express or implied, is made, or responsibility of any kind is or will be accepted by the DBP, IFC, the DPWH, or the Republic of the Philippines (ROP) or any of its agencies or advisors, with respect to the accuracy and completeness of this information memorandum.
The DPWH or the DBP/IFC may amend or replace any of the information contained in this booklet at any time, without giving any prior notice or providing any reason.
In furnishing this IM, the DBP, IFC, the DPWH, or the ROP or any of its agencies undertakes no obligation to provide recipients with access to any additional information, or to update, or to correct any inaccuracies which may become apparent in this IM or any other information made available in connection with the Project. Additional information shall be provided at appropriate times during the formal tender process.
No person has been authorized to give any information or make any representation not contained in this IM and, if given or made, any such information or representation may not be relied upon as having been authorized by DBP, IFC, the DPWH, or the ROP or any of its agencies.
THIS MEMORANDUM DOES NOT CONSTITUTE A SOLICITATION OF BIDS FOR ANY ASPECT OF THE NAIA EXPRESSWAY PROJECT. SOLICITATIONS OF BIDS AND BIDDING GUIDELINES WILL BE DISTRIBUTED SEPARATELY.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
ACRONYMS
BOT Build-Operate-Transfer BTO Build-Transfer-Operate CED Conceptual Engineering Design DBP Development Bank of the Philippines DED Detailed Engineering Design DENR Department of Environment and Natural Resources DOF Department of Finance DPWH Department of Public Works and Highways DTI Department of Trade and Industry EO Executive Order ICC Investment Coordination Committee IFC International Finance Corporation IRR Implementing Rules and Regulations ITB Instructions to Bidders JICA Japan International Cooperation Agency NAIA Ninoy Aquino International Airport NEDA National Economic and Development Authority PAGCOR Philippine Amusement and Gaming Corporation PPP Public-Private Partnership RA Republic Act RFP Request for Proposals ROP Republic of the Philippines ROW Right-of-Way SBAC DPWH Special Pre-Qualification, Bids and Awards Committee TCA Toll Concession Agreement TOC Toll Operation Certificate TRB Toll Regulatory Board VOT Value-of-Time
UNITS
Km Kilometer AADT Average annual daily traffic
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
CONTENTS
I. Introduction ...... 8 II. Project Description ...... 9 A. Type of Toll System ...... 12 B. Traffic Management ...... 13 C. Project Standards and Specifications...... 13 Minimum Performance Standards and Specifications ...... 13 Scope of Design ...... 14 Outputs of the Detailed Engineering Design by the Concessionaire ...... 15 D. Construction Cost ...... 15 III. Project Implementing Agency ...... 16 IV. Traffic Analysis ...... 18 V. Right-of-Way and Resettlement ...... 23 A. Right-of-Way (ROW) Acquisition ...... 23 B. Resettlement of Informal Settlers and the Resettlement Action Plan ...... 23 VI. Concession Structure ...... 24 A. Legal Framework for Concession ...... 24 B. Project Structure ...... 24 VII. Key Commercial Features of the Draft TCA ...... 25 VIII. Procurement Process ...... 28 A. Legal Basis of Procurement ...... 28 B. Outline of the Bidding Process ...... 28 Pre-Qualification ...... 28 Preparation of Bid Proposals ...... 28 Pre-Bid Conference ...... 29 Submission of Bid Proposals ...... 29 Bid Evaluation and Post Qualification ...... 29 Awarding of Bidder and Issuance of Notice of Award ...... 30 Signing of Concession Agreement ...... 30 C. Information Available to Bidders ...... 30 IX. Investment Framework ...... 31 A. Taxation ...... 31 Corporate Tax ...... 31 Income Tax ...... 32 Value-Added Tax (VAT) ...... 32 Tax Treaties ...... 32 Tax Incentives ...... 34 Local Tax ...... 34 B. Foreign Exchange...... 35 C. Foreign Ownership and Management ...... 35 X. Regulatory Framework ...... 37 A. National Economic and Development Authority ...... 37 B. Toll Regulatory Board ...... 37 XI. The Philippine Toll Road System...... 38 XII. Ninoy Aquino International Airport ...... 42 XIII. PAGCOR Entertainment City ...... 45 XIV. Indicative Timetable ...... 46
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
LIST OF TABLES
Table 1: NAIA Expressway Project Description ...... 11 Table 2: Vehicle Class and Toll Rate Multiplier ...... 12 Table 4: Risk Allocation Matrix ...... 27 Table 5: Corporate Income Taxation ...... 31 Table 6: Individual Taxation ...... 32 Table 7: Effective Philippine Tax Treaties ...... 33 Table 8: Amount of Tax Per Annum ...... 34 Table 9: Other Transport Costs in Manila...... 38 Table 10: Philippine Toll Road System Toll Rate (2011 Pesos per Km) ...... 39 Table 11: High Standard Highway Master Plan – 200km Sphere of Metro Manila ...... 41 Table 12: Passenger Traffic at the Ninoy Aquino International Airport (1994-2010) ...... 42 Table 13: Passengers at NAIA, DMIA and the Region (2002-2010) ...... 44
LIST OF FIGURES
Figure 1: NAIA Expressway Road Alignment ...... 10 Figure 2: Traffic Volumes on Roads Surrounding NAIA ...... 19 Figure 3: Hourly Variation of Traffic In NAIA Expressway Study Area (Weekdays) ...... 20 Figure 4: Traffic Composition at the NAIA Terminal Main Gates ...... 21 Figure 5: Travel Speed from Roxas Blvd. to Skyway Expressway (From 5 to 6pm) ...... 22 Figure 7: Total A/D Passengers at NAIA (1994-2010) ...... 43 Figure 8: Aerial Shot of Entertainment City ...... 45
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
PART I. EXECUTIVE SUMMARY: INVESTOR HIGHLIGHTS
The implementation of the NAIA Expressway Project (the “Project”) under an open international competitive bidding process represents an excellent opportunity to invest in a toll road concession in the Philippines. The Project, sponsored by the Department of Public Works and Highways (DPWH), is one of the priority projects of the Republic of the Philippines (ROP) under its Public-Private Partnership (PPP) Program launched by President Benigno Aquino III in November 2010. Under the 2011-2016 Philippine Development Plan, massive infrastructure investments are deemed urgently needed over the medium-term in order for the Philippines to achieve its development targets of sustained and inclusive growth; and PPP is identified as the centerpiece strategy for mobilizing these investments.
The Project, one of the strategic component of the Metro Manila Urban Expressway System that envisions the establishment of a network of high-standard expressways serving Metro Manila, would facilitate the efficient flow of traffic to and from the country’s premier international and domestic airport (the Ninoy Aquino International Airport (NAIA) Complex), link two major expressways serving as the north-south backbone of the eastern and western sections of Metro Manila, and support the development of the PAGCOR Entertainment City located along the Manila Bay reclamation area.
The key highlights of this investment opportunity are as follows:
Robust Legal and Regulatory Framework
The Philippine Constitution recognizes the critical role of the private sector as the government’s main partner in development. This recognition was further reinforced with the landmark passage of Republic Act No. 6957, otherwise known as the Philippine Build- Operate-Transfer (BOT) Law in 1990, which is the first of its kind in Asia, that declared “the indispensable role of the private sector as the main engine for national growth and development” and provided a stable framework for private sector involvement in the financing, construction, operation and maintenance of infrastructure and development projects.
The BOT Law opened to private sector participation various infrastructure sectors and defined contractual arrangements under which such participation may be undertaken. The BOT Law was amended in 1994, further expanding the allowed contractual variants, strengthening the process for government approvals, allowing private sector initiatives through the unsolicited track and prescribing additional incentivizes for projects undertaken through this legal framework. To date, over US$45 billion investments have been mobilized under the BOT Law covering some 70 infrastructure projects.
Government Support
The ROP, represented by DPWH, will be the direct counterparty in the Toll Concession Agreement (TCA) to be implemented under the Philippine BOT Law (Republic Act (RA) 6957 as amended by RA 7718).
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
To promote project viability and sustainability, the Government is prepared to provide the Right-of-Way (ROW) required for the Project by a pre-agreed timeline, which will be specified in the TCA.
The Government is facilitating the arrangement of debt financing on concessional terms from a reputable financing institution of up to Php6.5 billion. This debt facility – the Infrastructure Support Facility (ISF) – will be made available to the winning bidder, or if the winning bidder is a consortium, the corporation it will be required to form after winning the bid. The terms of this debt facility will be circulated to Pre-Qualified Bidders separately once these are firmed up and finalized. The amount to be available under the ISF shall be the criteria for the financial proposal.
Competitive and transparent pre-qualification and bidding process
The Project will be procured strictly following the rules and procedures of the BOT Law and its Implementing Rules and Regulations, which adhere to the principles of competition, transparency, and a leveled playing field, and will therefore be fair and open to all interested parties.
The bid process is expected to take approximately seven (7) months from the publication of the Invitation to Pre-Qualify to Bid to the signing of the Toll Concession Agreement. Prospective Bidders are given around three (3) months from the Notice of Pre-Qualification to the Bid Submission Date to provide them sufficient time to conduct due diligence, review and comment on the transaction documents, and meet with DPWH representatives. A data room will be set up by DPWH to aid the conduct of such due diligence.
Pre-defined requirement and process for TOC issuance, and a toll rate structure that promotes bankability
The complete requirements and process for the issuance of the Toll Operation Certificate (TOC) by the Toll Regulatory Board (TRB) will be provided to bidders and incorporated in the TCA. Upon compliance with these requirements, DPWH will ensure the issuance by the TRB of the TOC to the Concessionaire or its duly appointed Facility Operator within a prescribed period to be stipulated in the TCA.
The Project will have a toll rate structure that is affordable and competitive, with levels set that are comparable with those charged in existing toll roads serving Metro Manila. A toll adjustment formula will be prescribed in the TCA and its application over the concession period will be guaranteed by the DPWH.
Environment and Social Considerations
The project will comply with environmental standards and safeguards required by local laws as well as international standards required by multilateral and bilateral financing institutions.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012 PART II. THE NAIA EXPRESSWAY PROJECT
I. INTRODUCTION
The Philippine government launched in November 2010 an aggressive program for PPPs in order to develop much needed infrastructure that would support its objectives of sustained and inclusive economic growth.
The NAIA Expressway is among the government’s priority PPP to be implemented under the BOT Law through the solicited mode (the Transaction).
The Project was approved by the NEDA Board on 30 May 2012.
In preparation for the competitive tender, the DPWH availed of the support of the Japan International Cooperation Agency (JICA) to review and update the feasibility study for the Project conducted by by Filipinas Dravo in association with Philipps Technical Consultants Corporation in 2008/2009.
Furthermore, DPWH engaged the services of the Development Bank of the Philippines (DBP) with the International Finance Corporation (IFC), an affiliate of the World Bank, to act as Lead Transaction Advisors in developing, structuring the PPP transaction, preparing the tender documents, and assisting DPWH in the conduct of the competitive tender process for the Project. IFC in turn has hired specialized consultants for this project to support the work of the Advisors: expressway technical specialists (LeighFisher), international legal consultants (Hogan Lovells Lee & Lee, Singapore), and local lawyers.
The Philippine Public-Private Partnership Center (PPP Center), under the National Economic and Development Authority (NEDA), is also assisting the DPWH and its advisors in the preparation and implementation of the tender for the Project. The PPP Center was formerly known as the Build-Operate-Transfer Center (BOT Center) attached to the Department of Trade and Industry (DTI). Executive Order No. 8 series of 2010 signed in September 9, 2010 renamed and reorganized the BOT Center into the PPP Center and transferred it to NEDA to efficiently and effectively implement the Medium-Term Philippine Development Plan by facilitating the coordination and monitoring of the PPP programs and projects of the Government.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
II. PROJECT DESCRIPTION
With the existing NAIA Terminals nearing capacity, the Republic of the Philippines sought to address this problem by constructing the NAIA Terminal 3 in the early 2000s to promote investments and tourism in the country. Furthermore, with the sale and commercialization of a portion of the Villamor Airbase and the planned development of the reclamation area along Manila Bay, increased economic activity in these areas are expected to drive up usage of the existing road network around the airport.
Thus, the NAIA Expressway was conceived to provide fast and reliable access to the three NAIA Terminals and connect the South Luzon Expressway/Skyway with the Manila-Cavite Toll Expressway/Roxas Boulevard, the gateway to the rising PAGCOR Entertainment City complex (Entertainment City). Broadly, the objectives of the project are as follows:
to provide quicker access between all three NAIA Terminals to Roxas Boulevard, Macapagal Boulevard, and the Entertainment City complex.
To reduce traffic congestion of roads in the vicinity of the NAIA Terminals;
To improve international/domestic investment environment for faster economic development; and
To support the development of Entertainment City as a prime tourism destination.
The NAIA Expressway is composed of two phases. Construction of Phase I of the NAIA Expressway and its related roads project started in 2003 and was completed in 2010. The NAIA Expressway Phase I is a fully elevated expressway that runs from the Metro Manila Skyway to Sales Road near NAIA Terminal 3 with on and down ramps beside the Resorts World complex.
In order to ensure the safety and interest of the public, an Interim Operation Agreement covering Phase I was entered into by the DPWH, the TRB and the Skyway O&M Corporation (SOMCO) last 28 October 2011. The Interim Operation Agreement shall expire the day after the issuance by the TRB of the Toll Operation Certificate for the whole NAIA Expressway (Phase I and II).
The proposed alignment for Phase II has an approximate length of 4.83km for the main expressway from its tie in point at the terminus of Phase I to its connection with Roxas Boulevard/Manila Cavite Toll Expressway and Diosdado Macapagal Boulevard and Entertainment City.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
FIGURE 1: NAIA Expressway Road Alignment
The Project is composed of the following components:
Phase I Adjustment Works:
Adjustments to the 0.6 km Phase I viaduct, starting from Skyway Stage 1 at km 0+810 to km 1+398.27 including ramps, to achieve operations and maintenance standards comparable with standards to be set for Phase II that would enable seamless operations.
Phase II Works:
Design and construction of approximately 4.83 km 4-lane viaduct extension from the existing Phase I near NAIA Terminal 3 to Roxas Boulevard and Diosdado Macapagal Boulevard, over the existing roads of Sales Road, Andrews Avenue, Domestic Airport Road and NAIA Road.
Design and construction of Minimum of 6 on and 6 off ramps to Terminals 1, 2 and 3 and other strategic locations.
Design, construction and provision of toll plazas, plus additional toll operating equipment and safety facilities for the DPWH-constructed Phase I to standards compatible with those of Phase II.
Reconstruction of affected at-grade roads due to Phase II construction.
At-Grade Entertainment City Works:
Design and construction of approximately 2.22 km 4 to 6-lane at-grade feeder road within the Entertainment City, the maintenance and operations of this section shall be turned over to the Government upon completion.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
Operations and Maintenance:
Operation and Maintenance of the entire NAIA Expressway (Phase I and Phase II, but not including the At-Grade Entertainment City Works) as a tolled expressway.
The Project description is summarized the following Table.
TABLE 1: NAIA Expressway Project Description Elements Characteristics Phase I (existing, for adjustments) 0.6 km Phase II - Main Expressway, four-lane 4.83 kms - 12 Ramps, 6.34 km single-lane equivalent to four-lane 2.32 kms At-Grade Entertainment City Works 2.22 kms - four to six-lane Total Length (Phase I & II) 9.97 kms No. of Lanes 4 lanes (2-lane x 2-direction); 1 lane for ramps Ramps 6 on and 6 off Concession period 30 years Construction period Approximately 2 years Preparation of the Detailed Engineering Approximately 10 months; partial delivery and Design approval allowed At-grade road turn-over by Dec.2013; Partial operations by April 2015 (Terminals Operation start year 1 and 2 to/from Roxas Blvd. / Macapagal Blvd. / Entertainment City); Full operations by 2016
The Six new on-ramps, six new off-ramps and one existing off-ramp shall be provided as follows: One on-ramp for NAIA Terminal 3 exit traffic and one existing off-ramp from Skyway for access to NAIA Terminal 3; One off-ramp for traffic from Paranaque bound for Terminal 3; One on-ramp along Andrews Ave. to collect traffic from NAIA Terminal 3 and Andrews Ave; One off-ramp access to NAIA Terminal 1; One off-ramp access to NAIA Terminal 2; One on-ramp to collect traffic from NAIA Terminal 1 and Terminal 2; One on-ramp and one off-ramp from/to Roxas Boulevard towards the Manila-Cavite Coastal Expressway; One on-ramp and one off-ramp at Macapagal Boulevard towards Manila; and One on-ramp and one off-ramp at Entertainment City.
Two connection ramps will also be constructed to link vehicles to and from Roxas Boulevard, Macapagal Boulevard and Entertainment City to and from Terminals 1 and 2.
Furthermore, one existing on-ramp (entry to the Skyway) of Phase I should be removed.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
Should the Concessionaire propose to provide any additional on and off ramps, aside for the minimum of twelve ramps in the abovementioned locations, the Concessionaire shall bear the costs of construction, operation and maintenance thereof, as well as the cost of the additional right-of-way needed.
The number of traffic lanes of the main expressway shall be four (4) lanes (2-lane x 2- directions) meanwhile the number of traffic lanes of all ramps shall be one (1).
Upon issuance of the Toll Operation Certificate for the NAIA Expressway, the TRB may then require the Concessionaire to enter into interconnection agreements with the Skyway operator for connection with the Skyway and with the Cavite Expressway operator for connection with the Cavite Expressway. These agreements are necessary for the seamless integration of these expressway systems.
A. TYPE OF TOLL SYSTEM
The "open toll system" shall be used in which motorists pay the following flat toll rate:
a) Short-segment Rate - a fixed toll rate for the appropriate vehicle class, for motorists travelling on the NAIA Expressway between: i. the Skyway and NAIA Terminal 3; and ii. NAIA Terminals 1 and 2 and Roxas Boulevard/Macapagal Boulevard/Entertainment City.
b) Full-route Rate - a fixed toll rate for the appropriate vehicle class, for motorists travelling on the NAIA Expressway, other than those covered above.
The proposed toll rate is tentatively set at: Full-route Rate: Php45.00 (inclusive of VAT) Short-segment Rate: Php35.00 (inclusive of VAT)
The following table shows the toll rate multiplier to be applied per vehicle class on the fixed toll rate described above.
TABLE 2: Vehicle Class and Toll Rate Multiplier Vehicle Class Toll Rate Multiplier
Class I: Light Vehicles - Car, Jeep, Passenger Van/ 1.0x Pickup, Taxi, Mega-Taxi, Jeepney, Mini-Bus
Class II: Medium Weight Vehicles - Aircon& Non Aircon Bus, Goods Van/Pickup, 2-Axle Truck, Dump 2.0x Truck, Tanker, Mixer
Class III: Heavy Vehicles – Rigid Truck with 3 or more 3.0x Axles, Trailer (Articulated)
It should be noted that as an integrated system connected to the existing Metro Manila Skyway (Skyway), SOMCO collects a toll of Php20 for Class 1 vehicles passing through the NAIA Expressway Phase I coming from or leading to the Skyway under the Interim Operations Agreement mentioned above.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
B. TRAFFIC MANAGEMENT
To ensure the continuous use of the existing roads and to minimize the impact of traffic during the construction of NAIA Expressway on traffic, during construction, at-grade roads will be required to be opened at all time with the following number of operable lanes:
TABLE 3: Number of Traffic Lanes of At-Grade Roads No. of Traffic No. of Traffic Existing No. of At-grade Road Lanes During Lanes After Traffic Lanes Construction Construction 3 (Before on-ramp) East Bound 2 3 2 (After on-ramp) Sales Road 3 (Under off-ramp) West Bound 2 3 2 (Under off-ramp) Andrews Avenue East Bound 3-4 3 3-4 (Sales Ave – Roundabout) West Bound 3 3 3 Andrews Avenue East Bound 3 3 3 (Roundabout – Domestic Rd) West Bound 3 3 3 North Bound 3 2 3 Domestic Road South Bound 3 2 3 NAIA (MIA) Road East Bound 4 2 4 (Domestic Rd – Quirino Ave) West Bound 4 2 4 NAIA (MIA) Road East Bound 4 2 4 (Quirino Ave – Roxas Blvd) West Bound 3 2 3 Diosdado North Bound 4 2 4 Macapagal Blvd. South Bound 4 2 4
A detailed traffic management plan will be required as part of the Technical Proposal to be submitted by the Bidders for the evaluation and approval of DPWH.
C. PROJECT STANDARDS AND SPECIFICATIONS
MINIMUM PERFORMANCE STANDARDS AND SPECIFICATIONS
Ramp Layout
Six on-ramps and six off-ramps shall be provided. The one existing on-ramp of Phase I is to be removed. An emergency exit for overloaded trucks shall be provided for Skyway-bound traffic after the weighbridge. The existing toll plaza (A) under Phase I near the Skyway should be maintained.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
Number of Traffic Lanes of Main Expressway and Ramps
The number of traffic lanes of the main expressway shall be four (4). The number of traffic lanes of each ramp shall be at least one (1).
Vertical Clearance
The desirable vertical clearance for the expressway and at-grade roads shall be 5.00 m. The absolute minimum vertical clearance is 4.88 m applicable to the section controlled by the NAIA Navigational Height Limitations.
NAIA Navigational Height Limitations
The NAIA Expressway Project shall comply with the Maximum Allowable Top Elevation (MATE) or Height Limitation at critical points of the Project stated in the letter dated May 30, 2011 of the Civil Aviation Authority of the Philippines (CAAP).
Basic Right-of-Way
The Maps of the Basic Right of Way, to be delivered by the DPWH, corresponding to the Minimum Configuration described above are given in the MPSS. The Concessionaire may locate the Expressway center line within the Basic Right of Way.
Environmental Compliance Certificate (ECC) Requirements
The requirements of the ECC for the Project issued in 2002 shall be complied with. The Environmental Management Bureau (EMB), DENR, in a letter dated 17 June 2011, informed the DPWH that this ECC, which covers both Phases I and II, is still valid.
Indicative Minimum Requirements for Phase I Adjustments Works
These consist of the replacement of longitudinal expansion joints between the Skyway and Phase I, replacement of expansion joints between spans of Phase I, repair of 10% of the pavement, and miscellaneous repairs.
SCOPE OF DESIGN
The Concessionaire shall prepare the Detailed Engineering Design (DED) covering the construction of the Phase II Works, the Phase I Adjustment Works, and the At-Grade Entertainment City Works, and submit it for review and certification by the Independent Consultant. The Concessionaire shall prepare the DED (a) based on its Conceptual Engineering Design (CED) submitted in the Technical Proposal, and (b) in accordance with the MPSS.
The certified DED, together with the MPSS for Construction, shall govern the Phase I Construction and the Phase I Adjustment Works.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
OUTPUTS OF THE DETAILED ENGINEERING DESIGN BY THE CONCESSIONAIRE
a) Phase II DED:
1. Detailed design of expressway, on and off ramps, Phase I-II interconnection, at- grade roads, and appurtenant structures, including plans, profiles and cross- sections; 2. Detailed design of viaduct structures, including substructure and superstructure; 3. Detailed design of toll facilities, including toll plazas and tolling systems/equipment; and 4. Detailed design of expressway traffic safety devices, including signage.
b) Phase I Adjustment Works DED.
c) At-Grade Entertainment City Works DED.
d) Plans, elevations, and typical cross-sections.
e) Supporting data for a), b), and c) above, including topographic, geotechnical, and hydrologic, geometric and pavement design reports, structural analysis and calculations, detailed specifications of materials, safety audit, and value engineering.
f) Updated/detailed Construction Plan, including Schedule, including milestones, and S- curve, and Traffic Management Plan.
D. CONSTRUCTION COST
The construction cost was estimated based on several factors, as follows: a) Unit price was used for similar ROP and BOT projects implemented or tendered from 2010-2011; and b) Procedures and composition for the derivation of base construction cost, used in similar projects.
The civil works cost was divided into four components: a) General requirement; b) Expressway Ramp and Viaduct; c) Construction of At-Grade Road; and d) Toll Plaza.
The estimated civil works cost for NAIA Expressway is approximately Php11 billion. This does not include any contingencies or consultancy costs nor does it include costs related to financing or insurance.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
III. PROJECT IMPLEMENTING AGENCY
The Project is being implemented by DPWH, a department of the executive branch of Government. It is the engineering and construction arm of the Government. DPWH is primarily responsible for the planning, classification, design, construction, operation, maintenance, and supervision of all public works and infrastructure facilities, particularly national roads and highways.
Its specific legal mandate in relation to national roads and highways is set out in its charter, Executive Order (EO) No. 124 as amended under Book IV, Title V, Chapter 1, Section 3 of EO 292 or the Administrative Code of 1987 as follows: a) Provide technical services for the planning, design, construction, maintenance, or operation of infrastructure facilities; b) Develop and implement effective codes, standards, and reasonable guidelines to ensure the safety of all public and private structures in the country and assure efficiency and proper quality in the construction of public works; c) Ascertain that all public works plans and project implementation designs are consistent with current standards and guidelines; d) Identify, plan, secure funding for, program, design, construct or undertake prequalification, bidding, and award of contracts of public works projects with the exception only of specialized projects undertaken by Government corporate entities with established technical capability and as directed by the President of the Philippines or as provided by law; e) Provide the works supervision function for all public works constructions and ensure that actual construction is done in accordance with approved government plans and specifications; f) Assist other agencies, including the local governments, in determining the most suitable entity to undertake the actual construction of public works projects; g) Maintain or cause to be maintained all highways, flood control, and other public works throughout the country except those that are the responsibility of other agencies as directed by the President of the Philippines or as provided by law; h) Provide an integrated planning for highways, flood control and water resource development systems, and other public works; i) Classify road and highways into national, regional, provincial, city, municipal, and barangay roads and highways, based on objective criteria it shall adopt; provide or authorize the conversion of roads and highways from one category to another; j) Delegate, to any agency it determines to have the adequate technical capability, any of the foregoing powers and functions; and, k) Perform such other functions as may be provided by law.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
In addition to its charter, EO 686, which was issued in 2007, provides that the DPWH also has the powers to: a. Determine the kind, type and nature of roads and highways; b. Enter into construction, operation and maintenance contracts for roads and highways; and, c. Condemn private property for roads and highways.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
IV. TRAFFIC ANALYSIS
A JICA study team was commissioned by DPWH to conduct a traffic study for NAIA Expressway. The traffic estimation was based on a network traffic model developed using the JICA STRADA software, including all steps of the travel model calibration and demand forecasting. The results of this traffic study will be provided to bidders.
Base year for the model is 2010 and Annual Average Daily Traffic (AADT) values were derived from observed data extrapolated from the following two documents:
Feasibility study completed in February 2010 by Filipinas Dravo Corporation in association with Philipp’s Technical Consultants Corporation on behalf of the Ministry of Economy & Trade, Government of Japan and the Economic Research Institute for ASEAN and East Asia; and
JICA Study on Airport Strategy for Greater Capital Region (January 2011).
Traffic volumes (expressed as AADT) on roads surrounding NAIA are discussed below:
As seen in the Figure below, there is a high number of vehicles in the corridor where the future expressway will run – 48,373 on Sales Road, 65,229 on Andrew’s Avenue, 78,405 on NAIA Road (Seaside Drive);
Recorded traffic at NAIA Expressway (Phase I) in 2010 is 18,332 vehicles in both directions. This number increases to 36,391 at beginning of 2011 with 60% of traffic moving in the direction of the Skyway;
Most of these vehicles entering Skyway are exiting at the Makati exits of Skyway (Magallanes exit and Osmena exit). At present, use of the entire stretch of NAIA Expressway Phase I is free of charge as well as use of the portion of the Skyway from NAIA Expressway to the Skyway Makati exits;
The number of vehicles recorded at the main entrance of terminals of the airport is also significant at 16,578 a day at Terminal 1, 16,839 at Terminal 2 and 11,375 at Terminal 3. Traffic recorded at the gate of the Cargo Terminal is 1,149 vehicles a day; and
Observed traffic volume at the major corridors in vicinity of the airport is also high at 95,669 in Roxas Boulevard and 95,675 in EDSA.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
FIGURE 2: Traffic Volumes on Roads Surrounding NAIA
NAIA Expressway (Phase - 1) 82,70595,675 Traffic Data Direction 2010 2011 From Skyway 9,407 14,866 To Skyway 8,925 21,525 Total 18,332 36,391 31,60933,895 85,89095,669 7,50411,071 64,69849,664 18,332 51,28444,958 2,187 16,856 879 11,37561,069 65,229 36,391 (4)41,899
44,47648,373 (1) 90,48578,405 71,445 (2)96,883 12,98513,071 (3)69,174 61,65265,876
16,839 3,668 16,578 2,049 4,542 1,149
61,579 44,476 L E G E N D April 2011 (JICA Study Team) Feb. 2010 (ERIA) Intersection Count Feb. 2010 (ERIA) Jan. 2011 (JICA)
Source: “Review and Update of Feasibility Study of NAIAX Phase II Final Report 2011_06” – Chapter 4
Observations of hourly variation of traffic are as follows:
Traffic accessing the terminals of the NAIA has peak period at noon time (11:00AM to 3:00PM) and dramatically decreases around midnight (1:00AM to 3:00AM). The highest number of vehicles recorded in one hour is 1,283 at Terminal 2. There is no observed difference of traffic characteristics between weekday and weekend day.
The peak hours of traffic on Sales Road are between 8:00AM and 11:00AM during the weekday. On weekend days however there is also a high volume of vehicles from 5:00PM onwards moving in the direction of Andrew’s Avenue.
At Andrews Avenue (near Aurora Road), both on weekday and weekend day, there is a constant high volume of vehicles from 6:00AM to 7:00PM, with each direction having more than 1000 vehicles per hour. The highest recorded number of vehicles in an hour is 2,119 on a weekday and 2,862 on the weekend.
Traffic volume at Andrews Avenue near Domestic Road is also very high and the number of vehicles recorded constantly exceeded 1,000 vehicles an hour from 6:00AM to 9:00PM on weekdays. On weekend days however, the traffic characteristics change and there is a very high peak of traffic at noon time in the direction of Roxas Boulevard, and then again at 9:00PM to 10:00PM in the same direction. This peak hour may be correlated with airline flight schedules.
The highest traffic volume is observed on the NAIA Road (Seaside Drive) where both weekday and weekend day have the same traffic characteristics. The flow in the direction of coastal road is higher than the opposite direction and traffic Page 19 of 46
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volumes substantially decrease from 6:00PM onwards. Peak hours of traffic however are different, with peak hours on weekday from 11:00AM to 5:00PM and on the weekend from 9:00AM to 5:00PM.
The following figures show observed traffic condition at NAIA Expressway study area.
FIGURE 3: Hourly Variation of Traffic In NAIA Expressway Study Area (Weekdays)
AIRPORT TERMINALS SALES ROAD Terminal 1 1,800 1400 Cargo Terminal 1,600 1200 Terminal 2 1,400 Domestic 1,200 1000 Terminal 3 1,000 800 800 600 600 To ANDREWS AVE. 400 400 200 From ANDREWS AVE. - 200
0 6-7AM 7-8AM 8-9AM 1-2PM 2-3PM 3-4PM 4-5PM 5-6PM 6-7PM 7-8PM 8-9PM 9-10AM 12-1PM 9-10PM 10-11AM 11-12AM 6-7AM 7-8AM 8-9AM 1-2PM 2-3PM 3-4PM 4-5PM 5-6PM 6-7PM 7-8PM 8-9PM 1-2AM 2-3AM 3-4AM 4-5AM 5-6AM 9-10AM 12-1PM 9-10PM 12-1AM 10-11AM 11-12AM 10-11PM 11-12PM
ANDREW’S AVENUE (NEAR AURORA ROAD) ANDREW’S AVENUE (NEAR DOMESTIC ROAD) 2,500 2,500 From SLEX 2,000 To SLEX 2,000
1,500 1,500
1,000 1,000
500 500 To ROXAS BLVD. From ROXAS BLVD. - - 6-7AM 7-8AM 8-9AM 1-2PM 2-3PM 3-4PM 4-5PM 5-6PM 6-7PM 7-8PM 8-9PM 1-2AM 2-3AM 3-4AM 4-5AM 5-6AM 6-7AM 7-8AM 8-9AM 1-2PM 2-3PM 3-4PM 4-5PM 5-6PM 6-7PM 7-8PM 8-9PM 9-10AM 12-1PM 9-10PM 12-1AM 9-10AM 12-1PM 9-10PM 10-11AM 11-12AM 10-11PM 11-12PM 10-11AM 11-12AM
NAIA ROAD (SEASIDE DRIVE) Source: "Review and Update of Feasibility Study of 8,000 NAIAX Phase II Final Report 2011_06” – Chapter 4 From Coastal Rd 7,000 To Coastal Road 6,000 5,000 4,000 3,000 2,000 1,000 - 6-7AM 7-8AM 8-9AM 1-2PM 2-3PM 3-4PM 4-5PM 5-6PM 6-7PM 7-8PM 8-9PM 1-2AM 2-3AM 3-4AM 4-5AM 5-6AM 9-10AM 12-1PM 9-10PM 12-1AM 10-11AM 11-12AM 10-11PM 11-12PM
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Regarding vehicle composition, most of the vehicles recorded at the main gates of airport terminals are private cars. For example:
At Terminal 1, 99% are cars and the remaining 1% are buses.
At Terminal 2, share of cars is 86%; jeepneys, 7%; buses at 4%; and trucks, 3%.
At Domestic Airport, 99% of the traffic is cars.
At Terminal 3, share of cars is about 98% and the remaining 2% is shared by buses and trucks.
At Cargo Terminal, cars’ share is 70% and trucks’ share is 30%.
FIGURE 4: Traffic Composition at the NAIA Terminal Main Gates
Truck 18,000 Bus 16,000 Jeepney Car 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - Cargo Domestic Terminal 1 Terminal 2 Terminal 3 Terminal
Source: “ Review and Update of Feasibility Study of NAIAX Phase II Final Report 2011_06” – Chapter 4
The main users of the corridor where the future NAIA Expressway will run are cars. The share of cars at Sales Road is 69%, at Andrew’s Avenue near Aurora Street 67%, at Andrews Avenue near Domestic Road 58%, and at NAIA Road (Seaside Drive) 66%.
A travel time survey was conducted by JICA on 15 April 2011 (Friday) from 7:00AM to 9:00PM where a single run every hour was carried out to determine the most congested period. The survey shows that:
The longest travel time spent in the section is around 40 minutes (5:00 PM) and the direction is from Skyway to Roxas Boulevard. This means travel speed is below 10 km/hr for the entire 5.8 km stretch.
The shortest travel time is 11 minutes (12:00AM) in the direction of Roxas Boulevard to Skyway. Average travel speed is around 30 km/hr.
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If NAIA Expressway Phase II is built the expected travel time is around 8 minutes (excluding any stop time at a toll plaza) from Roxas Boulevard to Skyway. The travel speed is about 45 km/hr for the entire 5.6 km expressway stretch.
The Figure below shows speeds in the most congested hour (5 to 6PM).
FIGURE 5: Travel Speed from Roxas Blvd. to Skyway Expressway (From 5 to 6pm)
EDSA Skyway Skyway / SLEX Roxas BoulevardRoxas Terminal 3
Terminal 2
Terminal 1
L E G E N D
Less than 10km/hr
Manila-CaviteCoatal Road 10km ~ 20km/hr 20km ~ 30km/hr Over 30km/hr
Source: “ Review and Update of Feasibility Study of NAIAX Phase II Final Report 2011_06” – Chapter 4
Road congestion can be observed on many of the existing roads in the area, and the volume of traffic has almost reached the roads theoretical capacity: Sales Street at 84%. Andrews Avenue at 91%. Domestic Road at 86%. NAIA Road at 82%. Imelda Avenue at 81%. Ninoy Aquino Road at 81%. EDSA at 100%. Roxas Boulevard at 100%.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012
V. RIGHT-OF-WAY AND RESETTLEMENT
A. RIGHT-OF-WAY (ROW) ACQUISITION
ROW acquisition area for the Project is about 33,000 square meters wherein majority of the lots are owned by Government through Government-Owned and Controlled Corporations (GOCCs) such as the Manila International Airport Authority, the Light Rail Transit Authority, PAGCOR, Philippine Reclamation Authority and the Philippine Air Force.
The DPWH expects to be able to turn over all the ROW within approximately one (1) year from the signing of the TCA to ensure that the Concessionaire is able to perform its obligations under the TCA. The DPWH may also turn-over ROW in sections to the Concessionaire to accelerate construction.
The DPWH will coordinate with the Concessionaire on the relocation of public utility facilities and structures in accordance with the Concessionaire's construction schedule to avoid delay the construction of the Project. The Concession Agreement shall set out the details of the arrangement for relocating public utility facilities and structures. Presently, the DPWH is already coordinating with the affected utility agencies on this matter since under DPWH Department Order No. 26 series of 2011 on Policy on Diggings/Excavations by Private and Public Utilities on National Roads signed 3 May 2011, a utility agency is obliged to remove or relocate its existing utility facilities or structures located on a national road should this be required by the DPWH for expansion or improvement. Maps of underground utilities will be provided to Pre-Qualified Bidders and will be included in the Data Room.
DPWH has already completed the parcellary survey for the Project. Negotiations with affected parties are on-going for direct acquisition. Formal expropriation proceedings will be conducted after six months if agreement is not reached with affected parties.
B. RESETTLEMENT OF INFORMAL SETTLERS AND THE RESETTLEMENT ACTION PLAN
The implementation of the NAIA Expressway is expected to yield a number of involuntary resettlement impacts as a result of land acquisition for ROW.
More than sixty (60) households of informal settlers have been identified as affected by the Project. Other affected areas are commercial establishments with expired leases (with MIAA) that have partially affected offices and facilities along the road alignment.
DPWH is currently coordinating with MIAA and the Pasay City Local Government for the possible relocation site for the affected households. Resettlement will be done in accordance with the rules and regulations of the Philippine Government, and guidelines of the World Bank, Asian Development Bank, and JICA.
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VI. CONCESSION STRUCTURE
A. LEGAL FRAMEWORK FOR CONCESSION
The BOT Law provides the legal framework for government agencies to enter into PPP contracts with qualified private sector proponents for the prosecution of government infrastructure or development projects. In particular, the BOT Law and its Revised IRR describe the requirements and procedures for the preparation, approval, tendering and implementation of PPP/BOT projects.
The Project will be a public utility. The Project provides flexibility for the Concessionaire to both own the income stream and operate the Project, provided it satisfies the Filipino nationality requirement under Art. XII, Section 11 of the Philippine Constitution, or to own the income stream from the Project and appoint a Facility Operator to operate the Project. Under the second option, only the Facility Operator needs to satisfy the Filipino nationality requirement.
B. PROJECT STRUCTURE
The Project will be implemented as a variant of the Build-Transfer-Operate (BTO) contractual arrangement, which is one of the PPP variants specifically authorized under the BOT Law. In a BTO scheme, the private sector party or concessionaire will be required to construct the infrastructure facility and assume construction-related risks arising from cost overruns, delays and other performance risks connected to construction. Once the facility is commissioned satisfactorily, title over the facility is transferred to the implementing agency, but the private sector party operates the facility on behalf of the implementing agency pursuant to the terms of the TCA. As a form of repayment for financing, constructing, operating and maintaining the facility, the private sector party is authorized to charge and collect tolls, fees and charges from the end users.
The principal terms and conditions governing the transaction are set out in the TCA, which provides for the obligations of the DPWH and the Concessionaire in respect of the development and operation of the facility, and other mutual undertakings, covenants and conditions to be performed or fulfilled by each of the parties.
The Government further recognizes the need to extend fiscal support to the Project in order to reduce the impact on commuter fares and to enhance the viability and bankability of the Project. For this Project, the Government will provide for the ROW and the transfer of Phase I assets of the Project.
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VII. KEY COMMERCIAL FEATURES OF THE DRAFT TCA
The following are some of the indicative key commercial features and terms that are contemplated under the draft TCA being prepared for the Project:
Grant of a 30-year concession (inclusive of construction period), reckoned from the delivery of the government of the ROW1, to the Project Proponent to exclusively undertake the following:
o raise financing for the balance of the Project cost (not covered by the Infrastructure Support Facility) and achieve financial close within one year from the signing of the TCA;
o design the Phase I adjustments, Phase II works, and At-Grade Entertainment City Works;
o construct the Phase I adjustments and Phase II works within two years from approval of the Detailed Engineering Design;
o construct and turn-over the At-Grade Entertainment City Works by December 2013;
o operate and maintain the adjusted Phase I and completed Phase II, or if the Concessionaire is foreign-owned or controlled, through its qualified Facility Operator to undertake the operation of the Project to defined levels of performance standards;
o collect the authorized toll from users of the NAIA Expressway which shall be operated as an open system;
o assume the commercial risks for the profit or loss in the Project as a going business concern; and
o turn-over the NAIA Expressway in good condition to DPWH at the end of the concession period.
DPWH obligations:
o procure and deliver in a timely manner the required ROW;
o subject to Concessionaire compliance with pre-defined obligations, ensure the grant of the TOC from the TRB
o assist the Concessionaire in securing necessary national government consents for the Project;
o ensure the application of the toll adjustment formula prescribed in the TCA and provide compensation in the event of disallowances of authorized computed tolls.
1 Refers to the land or land rights required for the Project based on the conceptual designed prepared by DPWH.
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Other major commercial points include:
o The bid parameter will be the lowest amount required for the Infrastructure Support Facility.
o The selection of the Independent Consultant (IC) will be done by DPWH from a shortlist of firms to be approved by the Concessionaire. The cost of the IC shall be borne equally by DPWH and the Concessionaire.
o There will be two (2) sets of tolls for the Expressway, one applied on the main expressway and the other for the shorter segments between Terminal 3 and the Skyway and Terminals 1 and 2 and Roxas Boulevard/Macapagal Boulevard/Entertainment City.
o Opening tolls will be set by DPWH and approved by TRB. The approved toll rate will be disclosed after Pre-Qualification.
o Periodic toll adjustments shall be made bi-annually and based only on a domestic inflationary index based on the following formula:
TRn= TRo [(CPIn/CPIo)]
where:
TRn = new Toll Rate as adjusted TRo = old Toll Rate as of the last adjustment CPIn = Consumer Price Index for month of the new review date issued by the National Statistics Office CPIo = Consumer Price Index for the month of the last review date issued by the National Statistics Office
o A performance regime related to efficient flow of traffic, ride quality, safety, security and cleanliness will be defined in the TCA and payment obligations will be imposed on failure to meet Key Performance Indicators.
o Force majeure shall be a risk that will be shared by both the Concessionaire and DPWH.
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Below is the risk allocation matrix for the Project.
TABLE 4: Risk Allocation Matrix Risk/Responsibility Allocation Remarks
Traffic Concessionaire No minimum traffic guarantee Compensation provided for Toll & Adjustment Implementation DPWH disallowance of adjustment based on agreed formula Terms and Conditions for the subordinated financing facility shall Financing institution / Infrastructure Support Facility be disclosed during the Bid Concessionaire Process; the ISF shall be managed by a reputable Bank/Trustee Project Financing Concessionaire Private financing Relief provided for domestic inflation Inflation & Foreign Exchange Concessionaire through Toll Adjust formula Free and clear, delivered by pre-agreed Basic ROW Acquisition & Delivery DPWH timeline Performance Security for Construction Design/Construction Concessionaire posted in favor of DPWH KPIs set with corresponding penalties for non-compliance, Performance Operation/ Maintenance Concessionaire Security for Operations posted in favor of DPWH Political Risks DPWH Limited events Relief provided to Concessionaire on O&M performance of obligations, Concessionaire and Force Majeure procedure and mechanism for DPWH addressing impact of FM events to be provided in the TCA At pre-agreed conditions, testing & Turn-over at the end of Concession Concessionaire acceptance regime included in TCA
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VIII. PROCUREMENT PROCESS
A. LEGAL BASIS OF PROCUREMENT
The international competitive bidding for the Project (the Bidding) will be conducted in accordance with the procurement rules and procedures set forth in the BOT Law (Republic Act No. 6957, as amended by Republic Act No. 7718) and its Revised Implementing Rules and Regulations (April 2006) (the Revised IRR).
The Special Bids and Awards Committee for Public Private Partnership Projects of the DPWH (SBAC) created by Special Order No. 68 dated 28 March 2011 shall administer the process of pre-qualification and bidding for the project.
B. OUTLINE OF THE BIDDING PROCESS
The Bidding for the Project will be conducted in an open and transparent manner following the two-envelope/two-stage system for soliciting bids under the Revised IRR.
The general procedure for the Bidding will be as follows:
PRE-QUALIFICATION
a) The first stage is the pre-qualification Process, which will be governed by the Instructions to Prospective Bidders. Prospective Bidders may be partnerships, corporations or unincorporated consortiums of two or more partnerships and/or corporations. During the Pre-Qualification stage, Prospective Bidders will have to submit documents that establish that they meet the legal, technical, and financial requirements set by the DPWH to bid for the Project.
b) Prospective Bidders will be asked to apply to pre-qualify to bid by submitting their Qualification Documents on the Qualification Documents Submission Date. After reviewing the documents, the SBAC will determine which Prospective Bidders fulfill the requirements to pre-qualify, and inform all Prospective Bidders who are pre-qualified within ten (10) days of the Qualification Documents Submission Date. Only Pre- Qualified Bidders will be invited and allowed to submit a Bid for the Project.
PREPARATION OF BID PROPOSALS
c) After all Pre-Qualified Bidders are informed that they have pre-qualified, they may purchase the Instructions to Bidders and other Bidding Documents
d) The Instructions to Bidders will contain the detailed rules and procedures for preparation, submission, and evaluation of Bid Proposals, the date, time, and location of the Pre-Bid Conference, and the Bid Proposal Submission Date, which will be no less than 90 days after completion of pre-qualification. It will also describe the procedures to be followed from the Bid Proposal Submission Date until the signing of the Concession Agreement between the DPWH and the Winning Bidder or the corporation to be formed by the Winning Bidder.
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e) Pre-Qualified Bidders will be allowed to send any comments and inquiries on any of the Bidding Documents, including the Draft Concession Agreement and the Minimum Performance Standards and Specifications.
PRE-BID CONFERENCE
f) During the Pre-Bid Conference, Pre-Qualified Bidders will be invited to raise any questions and issues regarding the Project, the Bidding Process, and the Bidding Documents. In addition, DPWH will make arrangements for Pre-Qualified Bidders which wish to have one-on-one discussions with it on any topic relating to the Bid
g) No later than 30 days before the Bid Proposal Submission Date, the DPWH will release to Pre-Qualified Bidders the final drafts of the Concession Agreement, and if there are any changes to them, the Minimum Performance Standards and Specifications and the Deed of Sale for ASDI Assets.
SUBMISSION OF BID PROPOSALS
h) The Bid Proposals to be submitted by Bidders on the Bid Proposal Submission Date shall contain:
A Bid Letter in a prescribed form, corporate authorizations to bid, a Bid Security, and other supporting documents A Technical Proposal which will include: o Traffic Study o Conceptual Engineering Design for Phase II of the Project o Construction Plan o Operation and Maintenance Plan o Other documents as may be required by DPWH A Financial Proposal which will include: o Bid Amount stating the lowest amount required for the Infrastructure Support Facility (ISF). o Supporting financial model
i) Pre-Qualified Bidders will be asked to bid for the Project by submitting their Bid Proposals on the Bid Proposal Submission Date.
BID EVALUATION AND POST QUALIFICATION
j) The SBAC will first review the Bidders’ Bid Letter and supporting documents. Only Bidders whose Bid Letters and supporting documents are complete will have their Technical Proposals opened. The SBAC will then review the Bidders’ Technical Proposals and evaluate them on a pass/fail basis. Bidders will be informed as to whether their Technical Proposals were passed. The SBAC will return the Financial Proposals of Prospective Bidders whose Technical Proposals did not pass.
k) Financial proposals of Bidders whose Technical Proposals were passed will be opened and evaluated. The Pre-Qualified Bidder whose Technical Proposal is passed and who submits a Bid with the highest amount of Government Payment will be subject to a post- qualification process to verify the accuracy of the statements it made in its Qualification Documents and Bid Proposal.
l) Post-qualification will be done to verify and validate whether the Pre-Qualified Bidder whose Technical Proposal is passed and who submits a Bid with the highest amount of Page 29 of 46
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Government Payment passed all the requirements and conditions as specified in the Bidding Documents. Should the Bidder fails to meet any of the requirements or conditions, he will be “post-disqualified” and the SBAC will conduct the post-qualification on the Bidder with the next highest amount of Government Payment.
AWARDING OF BIDDER AND ISSUANCE OF NOTICE OF AWARD
m) If the Winning Bidder with the highest amount of Government Payment passes the post- qualification process, it will be designated the Winning Bidder and receive a Notice of Award.
SIGNING OF CONCESSION AGREEMENT
n) The Winning Bidder will have to provide proof of incorporation, capitalization, and availability of debt financing and post a Construction Performance Security within thirty (30) days of receipt of the Notice of Award, and will have to enter into a Concession Agreement immediately after providing these required documents.
C. INFORMATION AVAILABLE TO BIDDERS
Immediately after notifying Pre-Qualified Bidders that they have been pre-qualified, DPWH will allow Pre-Qualified Bidders access to a physical data room located at the DPWH Main Office that will contain documents and relevant background information relating to the Project, including but not limited to the following documents:
1. Review and Update of Feasibility Study of NAIAX Phase II Final Report prepared by the JICA Study Team; 2. Feasibility Study on the NAIA Expressway Project Phase II by Filipinas Dravo in association with Philipps Technical Consultants Corporation; 3. As-Built Drawings of Phase I; 4. Asset Register of Phase I; 5. Original Plans and Specifications of Phase I; 6. Geotechnical Investigation Data for Phase I; 7. Maps of underground utilities; 8. Environmental Compliance Certificate; and 9. Environmental Impact Assessment.
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DPWH – NAIA Expressway Project: Information Memorandum June 2012 PART III. OTHER INFORMATION
IX. INVESTMENT FRAMEWORK
A. TAXATION
Laws governing the Philippine taxation are provided in the National Internal Revenue Code, as revised by the Tax Reform Act of 1997, effective January 1, 1998. Taxation is administered by the Bureau of Internal Revenue (BIR) under the Department of Finance.
CORPORATE TAX
Corporate tax is a tax to be paid by a corporation based on the amount of profit generated. Below is a table showing the various tax rates applicable:
TABLE 5: CORPORATE INCOME TAXATION Domestic/Resident Non-resident Foreign Sources Foreign Corporation Corporation Taxable income not subject to 30% 30% special tax rates
Interest on foreign loans 20% 35% Interest income derived by a domestic corporation from a depository bank under the N/A 20% expanded foreign currency deposit system Dividends from domestic 7.5% N/A corporations
Gains on sales of shares of stock
not traded in the Stock Exchange
Not over PhP100,000.00 5% 5%
On any amount in excess of 10% 10% PhP100,000.00 Source: Board of Investments
A Minimum Corporate Income Tax (MCIT) was also established under the Tax Reform Act. A minimum of 2% MCIT on gross income on an annual basis is imposed on corporations whose regular corporate income tax liability is less than the MCIT beginning the fourth taxable year following the year they commenced business operation. Any excess of the MCIT over the normal tax will be carried forward and credited against the normal tax for the succeeding three (3) taxable years.
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Aside from that, there is Improperly Accumulated Earnings Tax, which is a 10% tax imposed on the improperly accumulated earnings of a corporation, except in the case of publicly held corporations, banks, and other non-bank financial intermediaries and insurance companies. When a corporation allows its earnings or profit to accumulate beyond its reasonable needs, it is assumed that the purpose is to avoid tax on stockholders, unless proven to the contrary.
INCOME TAX
Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 less the deductions and/or personal and additional exemptions, if any, authorized for such types of income, by the Tax Code or other special laws.
TABLE 6: INDIVIDUAL TAXATION Sources Rates Non-resident aliens not engage in trade and 25% business flat income tax rate
Resident citizens/aliens (gainfully employed) 0-35% Graduated income tax rates Source: Bureau of Internal Revenue
VALUE-ADDED TAX (VAT)
VAT is a form of sales tax. It is equivalent to 12% of the gross selling price or gross value in money of goods or properties sold, bartered or exchanged. It is a tax on consumption levied on the sale of goods and services and on the imports of goods into the Philippines. Those required to file VAT returns are as follows: Every person or entity who in the course of their trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed One Million Five Hundred Thousand Pesos (P 1,500,000.00) for any twelve month period. A person required to register as VAT taxpayer but failed to register. A person who imports goods.
VAT registered entities are required to issue an invoice or receipt for every sale and, in addition to regularly required accounting records, they must maintain subsidiary sales and purchase journals exclusively for VAT purposes. VAT reports must be submitted on a quarterly basis, twenty-five days after the end of the quarter. VAT payments must be made on a monthly basis.
TAX TREATIES
The Philippines has tax treaties with various countries like the United States, UK, Canada and Singapore, which provide for tax relief on income derived by foreign or local residents of the Philippines and the foreign country from sources within their respective territories.
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The tax relief includes tax exemption or entitlement to preferential tax rates on certain types of income such as interest, royalties and dividends.
The business profits of a resident of another country with whom the Philippines has a tax treaty are taxable in the Philippines only if the resident has a permanent establishment in the Philippines to which the profits are attributable.
As of June 2010, the Philippines have a total of 37 effective tax treaties. Following is the list of countries and their dates of effectivity:
TABLE 7: EFFECTIVE PHILIPPINE TAX TREATIES
Country Date of Effectivity Date and Venue of Signature 1. Australia January 1, 1980 May 11, 1979, Manila, Philippines 2. Austria January 1, 1983 April 4, 1981, Vienna, Austria 3. Bahrain January 1, 2004 November 7, 2001, Manila, Philippines 4. Bangladesh January 1, 2004 September 8, 1997, Manila, Philippines 5. Belgium January 1, 1981 October 2, 1976, Manila, Philippines 6. Brazil January 1, 1992 Sept. 29, 1983, Brasilia, Brazil 7. Canada January 1, 1977 March 11, 1976, Manila, Philippines 8. China January 1, 2002 November 18, 1999, Beijing, China 9. Czech January 1, 2004 November 13, 2000, Manila, Philippines 10. Denmark (Renegotiated) January 1, 1998 June 30, 1995, Copenhagen, Denmark 11. Finland January 1, 1982 October 13, 1978, Manila, Philippines 12. France January 1, 1978 January 9, 1976, Kingston, Jamaica 13. Germany January 1, 1985 July 22, 1983, Manila, Philippines 14. Hungary January 1, 1998 June 13, 1997, Budapest, Hungary 15. India January 1, 1995 February 12, 1990, Manila, Philippines 16. Indonesia January 1, 1983 June 18, 1981, Manila, Philippines 17. Israel January 1, 1997 June 9, 1992, Manila, Philippines 18. Italy January 1, 1990 December 5, 1980, Rome, Italy 19. Japan January 1, 1981 February 13, 1980, Tokyo, Japan 20. Korea January 1, 1987 February 21, 1984, Seoul, Korea 21. Malaysia January 1, 1985 April 27, 1982, Manila, Philippines 22. Netherlands January 1, 1992 March 9, 1989, Manila, Philippines 23. New Zealand January 1, 1981 April 29, 1980, Manila, Philippines 24. Norway January 1, 1998 July 9, 1987, Manila, Philippines 25. Pakistan January 1, 1979 February 22, 1980, Manila, Philippines 26. Poland January 1, 1998 September 9, 1992, Manila, Philippines 27. Romania January 1, 1998 May 18, 1994, Bucharest, Romania 28. Russia January 1, 1998 April 26, 1995, Manila, Philippines 29. Singapore January 1, 1977 August 1, 1977, Manila, Philippines 30. Spain January 1, 1994 March 14, 1989, Manila, Philippines 31. Sweden (Renegotiated) January 1, 2004 June 24, 1998, Manila, Philippines 32. Switzerland January 1, 2002 June 24, 1998, Manila, Philippines 33. Thailand January 1, 1983 July 14, 1982, Manila, Philippines 34. United Arab Emirates January 1, 2009 September 21, 2003, Dubai, UAE 35. United Kingdom of Great January 1, 1979 June 10, 1976, London, United Kingdom Britain and Northern Ireland Page 33 of 46
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36. United States of America January 1, 1983 October 1, 1976, Manila, Philippines 37. Vietnam January 1, 2004 November 14, 2001, Manila, Philippines Source: Bureau of Internal Revenue
TAX INCENTIVES
The Omnibus Investments Code grants tax holidays of either four or six years to Board of Investments-registered enterprises, provided qualifies under the annual Investments Priority Plan entitlements.
Tax credits are also granted for purchase of Philippine-made capital equipment and raw materials.
Under the BOT Law and its IRR, projects costing more than Php1 billion are entitled to incentives, upon registration with the Board of Investments (BOI), as provided under the Omnibus Investment Code. Other incentives may be provided through P.D. 535 (1974), otherwise known as the “Tourism Incentives Program of 1974”.
LGUs may also provide additional tax incentives, exemptions or reliefs, subject to the provisions of the Local Government Code (LGC) of 1991.
LOCAL TAX
The LGC of 1991 provides for the fiscal autonomy of cities or local governments from the national government, and allows them to impose local and real property taxes.
Las Pinas City and Muntinlupa City, where the Project will be operated, are allowed to impose business taxes, based on their respective revenue ordinances or enacted resolutions/ordinances.
Local contractor’s tax under which the Concessionaire could be subject is a graduated tax with a maximum of between 0.5% to 0.75% of gross receipts under the Local Government Code.
Below is a table showing the schedule of taxes that municipalities may levy on contractors, per gross receipts for the preceding calendar year. However, the rates of taxes that cities may levy may exceed the maximum rates allowed for the province or municipality by not more than 50%.
TABLE 8: AMOUNT OF TAX PER ANNUM Gross Receipts Amount of Tax Per Annum (in PhP) (in PhP) Less than 5,000.00 27.50 5,000.00 or more but less than Php 10,000.00 61.60 10,000.00 or more but less than 15,000.00 104.50 15,000.00 or more but less than 20,000.00 165.00 20,000.00 or more but less than 30,000.00 275.00
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30,000.00 or more but less than 40,000.00 385.00 40,000.00 or more but less than 50,000.00 550.00 50,000.00 or more but less than 75,000.00 880.00 75,000.00 or more but less than 100,000.00 1,320.00 100,000.00 or more but less than 150,000.00 1,980.00 150,000.00 or more but less than 200,000.00 2,640.00 200,000.00 or more but less than 250,000.00 3,630.00 250,000.00 or more but less than 300,000.00 4,620.00 300,000.00 or more but less than 400,000.00 6,160.00 400,000.00 or more but less than 500,000.00 8,250.00 500,000.00 or more but less than 750,000.00 9,250.00 750,000.00 or more but less than 1,000,000.00 10,250.00 1,000,000.00 or more but less than 2,000,000.00 11,500.00 at a rate not exceeding fifty percent 2,000,000.00 or more (50%) of one percent (1%) Source: Local Government Code of 1991, Book II Local Taxation and Fiscal Matters
B. FOREIGN EXCHANGE
Foreign exchange may be bought and sold freely by foreign corporations operating in the Philippines and may be brought into or sent out of the country with few restrictions.
Foreign investments and profits can also be repatriated in foreign exchange with minimal control from the Bangko Sentral ng Pilipinas (BSP or Central Bank of the Philippines). Registration of foreign investments with the BSP requires proof of inward remittance of the foreign exchange used to fund the investment and has now become essentially an automatic process after the necessary corporate registration has been completed by the Philippine Securities and Exchange Commission. Should the banking system be also used for the payment of royalties, the related royalty contract should be registered with the Technology Transfer Registry of the Bureau of Patents, Trademarks, and Technology Transfer.
C. FOREIGN OWNERSHIP AND MANAGEMENT
The Philippine Constitution and a number of Philippine laws operate to limit the extent to which non-Philippine nationals may participate in the ownership and management of public utilities. No franchise, certificate or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to 60% Foreign – 40% Filipino companies.
Only forty percent (40%) ownership of common shares, and not of the total outstanding capital stocks (common and non-voting preferred shares), of corporations operating public utilities is allowed to non-Philippine nationals. All executive and managing officers of such corporation are then restricted to Filipino citizens.
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To ensure compliance with these nationality requirements, Commonwealth Act No. 108, also known as the “Anti-Dummy Law,” provides that any person, corporation or association with a right, franchise or privilege, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to the citizens of the Philippines or to 60/40 companies, is prohibited from permitting or allowing the use, exploitation or enjoyment of such right, franchise or privilege by a non-qualified person or entity or in any manner permitting or allowing any non-qualified person to intervene in the management, operation, administration, or control thereof, whether as an officer, employee or laborer therein, with or without remuneration, except technical personnel whose employment may be specifically authorized by the Secretary of Justice. The Anti-Dummy Law, however, allows the election of aliens as members of the board of directors or governing body of corporations in proportion to their allowable participation in the capital of such entities and the employment of foreigners in the capacity of technical consultants.
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X. REGULATORY FRAMEWORK
A. NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
The National Economic and Development Authority (NEDA) is the country’s independent economic development and planning agency. The NEDA is primarily responsible for formulating the country’s social and economic policies, plans and programs, including the formulation of annual and medium-term public investment programs.
National projects implemented through the BOT Law and costing more than PhP300 million must be submitted to the NEDA Board for approval upon the recommendation of the Investment Coordination Committee (ICC).
The NEDA Board is headed by the President, with the Secretary of Socio-Economic Planning, concurrently NEDA Director-General, as vice-chairman. The other members of the NEDA Board are the Executive Secretary and the (a) Secretary of Finance, (b) Secretary of Trade and Industry, (c) Secretary of Agriculture, (d) Secretary of Environment and Natural Resources, (e) Secretary of Budget and Management, (f) Secretary of Labor and Employment, and (g) Secretary of Local Government.
B. TOLL REGULATORY BOARD
The TRB is a government agency created on 31 March 1977 by virtue of Presidential Decree No. 1112 (PD 1112), otherwise known as the “Toll Operation Decree.” It is an attached agency of the Department of Transportation and Communications.
The TRB Board is composed of the Secretary of Transportation and Communications as Chairman, and its members are the Secretaries of DPWH, the Department of Finance, and NEDA, or their duly authorized representatives with ranks not lower than Undersecretary. A representative from the public sector, preferably a lawyer or an economist with adequate experience in public utilities regulation, also serves on the Board.
The TRB has the powers to: a) grant authority to operate a toll facility and to issue the necessary Toll Operation Certificate; b) issue, modify and promulgate the rates of toll that will be charged the direct users of toll facilities; and c) approve or disapprove petitions for toll increases.
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XI. THE PHILIPPINE TOLL ROAD SYSTEM
The Philippine High Standard Highway Master Plan is shown in the Figure below. It provides the long list of proposed Expressways as identified in the Master Plan for implementation in the Medium Term Plan, 2011-2016 and beyond.
The DPWH completed on July 2010 the Study of Master Plan on High Standard Highway (HSH) Development in the Republic of the Philippines through technical assistance of the Japan International Cooperation Agency (JICA). It focused on Metro Manila and its surrounding areas extending 200 KM radius including Metro Cebu and Tagum, Davao and General Santos Corridor.
The toll rate proposed for the NAIA Expressway will be comparable with the current Skyway toll per km and is therefore considered to be an acceptable rate, particularly taking into account the higher willingness to pay of people accessing the Airport.
The following tables show other transport costs that can be used as benchmarks for understanding the willingness to pay the new toll on the NAIA Expressway.
TABLE 9: Other Transport Costs in Manila Good Cost
1 liter of gas (unleaded) Php52.60-57.67
1 liter of diesel Php42.80-54.35
Airport Taxi Php70 boarding and Php4.00 per 300m
Taxi Php40 boarding and Php3.50 per 300m
Jeepney Php8.00 for first 4kms then Php1.40/km
Local bus (air con) Php12 for first 5kms then Php2.20/km
Shared Taxi / Shuttle Php12 minimum; Php2.00/km
LRT fare (current) Between Php12 to Php20
Makati on street parking 35 for 2 hours
Day flat rate airport parking fee (for cars and jeeps) 35
Overnight airport parking 50 per night
Park N Fly 300 per full day (including overnight) Source: Dept. of Energy, Oil Price Monitor as of April 2012; TRB as of October 2011 October
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TABLE 10: Philippine Toll Road System Toll Rate (2011 Pesos per Km) Class 1 Class 2 Class 3 Car, Heavy Toll Road Light Remarks Jeep, Truck, Truck Pick-up Trailer
NAIA Ex. Phase I 35 70 - Per entry fixed fee**
Skyway/Buendia – Elevated Phase I 6.84 13.68 20.53 Metro Manila Skyway Bicutan (9.5km) Alabang-Bicutan Elevated Phase II 11.92 23.84 35.76 (6.88km) Magallanes-Alabang At grade 7.85 15.70 23.56 (13.50km)
North Luzon Expressway (NLEX) 2.38 5.92 7.08
Alabang-Calamba-Sto. Tomas Alabang – Sto. Tomas, 3.02 6.04 9.10 Expressway (ACTEX) Batangas R-1 Extension to Phase I 3.33 6.82 9.85 Manila Cavite Toll Bacoor (6.6km) Expressway (MCTE) Bacoor Bay to Kawit, Phase II 8.96 17.92 26.87 Cavite (6.475km)
Southern Tagalog Arterial Road (STAR) 1.43 2.86 4.26
Subic-Clark-Tarlac Expressway (SCTEX) 2.68 5.36 8.04 Source: TRB, 2011 May Note: Skyway, Manila Cavite Expressway, part of NLEX are open systems **Discounted toll of Php20 for Class 1 and Php40 for Class 2 self-imposed by operator as of March 2012.
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FIGURE 6: High Standard Highway Master Plan
NAIA Expressway
Source: DPWH
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TABLE 11: High Standard Highway Master Plan – 200km Sphere of Metro Manila Existing Length (Km) Subic-Clark-Tarlac Expressway* 93.77 North Luzon Tollway* 82.62 C-5 Expressway (Segment 8.1) 2.34 Metro Manila Skyway, Stage 1* 9.30 SLEX (Magallanes-Alabang)* 13.43 Manila Cavite Toll Expressway* 6.75 South Luzon Tollway* 36.03 Manila-Cavite Toll Expressway (R-1 Extension)* 7.00 Metro Manila Skyway, Stage 2* 6.86 Southern Tagalog Arterial Road (Star)* 42.00 Total 300
Planned/On-Going Length (Km) Tarlac-Pangasinan-La Union Toll Expressway 88.58 C-5 Expressway (Segment 8.2, 9 & 10) 19.92 NLEX-SLEX Connector* 13.34 Total 122 Source: DPWH *Toll Road
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XII. NINOY AQUINO INTERNATIONAL AIRPORT
Historical passenger traffic at NAIA is summarized in the Table below.
TABLE 12: Passenger Traffic at the Ninoy Aquino International Airport (1994-2010) Year International Domestic Total % Change Transit 2000 7,129,881 5,538,320 12,668,201 - 96,715 2001 7,143,613 5,401,264 12,544,877 -1.0% 74,094 2002 7,466,379 5,282,351 12,748,730 1.6% 63,185 2003 7,126,338 5,791,115 12,917,453 1.3% 38,356 2004 8,416,005 6,740,636 15,156,641 17.3% 29,880 2005 9,222,006 6,971,585 16,193,591 6.8% 22,440 2006 9,766,649 8,159,025 17,925,674 10.7% 16,791 2007 10,723,715 9,707,219 20,430,934 14.0% 36,693 2008 11,272,647 10,720,343 21,992,990 7.6% 33,494 2009 11,203,029 12,716,150 23,919,179 8.8% 26,622 2010 12,380,600 14,739,299 27,119,899 13.4% n.a. 2011 12,969,466 16,582,798 29,552,264 8.97% n.a. Compound Average Annual Growth Rates 2000-2011 5.75% 10.75% 8.14% 2000-2005 5.57% 4.96% 5.23% 2006-2011 5.91% 15.58% 10.75% Source: MNL 2008-2010, NAIA web site: http://125.60.203.88/miaa/ MNL 1994-2007: ACI World Traffic Report
International passenger traffic at NAIA accounts for 44% of total traffic in the airport. On the other hand, domestic passenger traffic has been growing faster than international passenger traffic and now accounts for 56% of total passenger traffic at NAIA.
International passenger traffic grew strongly between 2003 and 2008 while the recession in 2009 caused a small downturn. However, growth in 2010 was very strong at 10.51% and was grew by 4.76% in 2011. Since 2000, the average annual growth rate of international passengers has been 5.75%.
For domestic passenger traffic, growth has been fairly steady as it averaged 10.75% since 2000 and has even accelerated in the past 5 years averaging 15.58% over that period. This is likely attributed to the emergence of budget carriers such as CebuPacific Air, ZestAir, and AirPhilippines which has made domestic air travel more competitive, affordable and accessible.
The total number of arriving/departing (A/D) passengers at NAIA in 2011 was 29.55 million, the highest recorded in history. This was up by around 9% over 2010 totals. Growth in total A/D passengers has averaged 10.75% per year over the past 5 years and 8.14% per year since 2000.
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FIGURE 7: Total A/D Passengers at NAIA (1994-2010)
The lack of adequate terminal facilities at the airport has likely constrained growth to some extent prior to the opening of Terminal 3 in 2008. Terminal 3 handled 9.5 million passengers in 2010 and has a capacity of 10 million passengers with expansion possible to 15 million. Growth in traffic could also be restricted by the capacity of the runway system and property developments close to the airport at the end of runway 06/24 (3750m) that negatively impact operation of this runway. Terminal 1 has already been operating at over- capacity for years and is currently undergoing renovations. The Government also intends to fully utilize Terminal 3 within the next few years after necessary repairs are made to ensure passenger safety and world-class service. Furthermore, Government has earmarked Php1.16 billion for the renovation of the NAIA Terminal 1 and for the construction of two rapid exit taxiways which will help alleviate congestion at the runways and also avoid flight delays due to congestion problems.
Apart from NAIA, the closest domestic and international airport to Metro Manila is the Diosdado Macapagal International Airport (DMIA) which is located in Angeles City, Pampanga, approximately 85 km from NAIA. An airport strategy study for the greater capital region is now being undertaken by the Department of Transportation and Communications (DOTC) with support from JICA for the “Project for the Study on Airport Strategies for the Greater Capital Region in the Republic of the Philippines” to look at long- term options to develop DMIA but more as a complementary alternate international airport given the aforementioned capacity limitations at NAIA. DMIA’s current capacity is 2 million passengers and the airport serviced 725,023 international passengers in 2011.
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One major consideration in the development of DMIA is its location. Based on common experience, the trip from Clark to downtown Manila takes over 2 hours. The travel time is too long and would be unacceptable to many passengers. It should be noted that 80% of the main airports of big cities are 30 km or less from downtown.
Traffic at DMIA and total traffic at the two airports is summarized in Error! Reference source not found.. Traffic at DMIA currently accounts for only 2% of the region’s traffic and after initial strong growth in traffic, there has been almost no growth over the past 3 years from 2007 to 2010. Published seat capacity for 2011 at DMIA is 4% below the 2010 level.
TABLE 13: Passengers at NAIA, DMIA and the Region (2002-2010) NAIA DMIA NAIA + DMIA Year A/D Pass. A/D Pass. % Change A/D Pass. % Change % NAIA 2003 12,917,453 7,880 12,925,333 1.4% 99.9% 2004 15,156,641 58,988 649% 15,215,629 17.7% 99.6% 2005 16,193,591 232,313 294% 16,425,904 8.0% 98.6% 2006 17,925,674 488,756 110% 18,414,430 12.1% 97.3% 2007 20,430,934 533,619 9% 20,964,553 13.8% 97.5% 2008 21,992,990 565,240 6% 22,558,230 7.6% 97.5% 2009 23,919,179 600,000 6% 24,519,179 8.7% 97.6% 2010 27,119,899 536,441 -11% 27,656,340 12.8% 98.1% Compound Average Annual Growth Rates 2005-2010 10.9% 18.2% 11.0% Source: DMIA: various web sites Note: Value for DMIA for 2009 is approximate.
The International Air Transport Association (IATA) releases five-year forecasts of passenger traffic by country. Their 2010 forecasts for the Philippines are summarized as follows: International Domestic 2010 11.0% 12.1% 2011 7.6% 11.3% 2012 7.3% 9.7% 2013 6.5% 9.5% 2014 5.5% 8.6% 2010-2014 7.6% 10.2%
Given broad forecasts of GDP growth between 4-5% for 2012 and 2013, it may be expected that airport passenger traffic will grow at approximately 5% per year in the early years possibly slowing in the medium to longer term (10-20 years). The IATA forecasts indicate very strong growth in the short-term.
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XIII. PAGCOR ENTERTAINMENT CITY
The master planned PAGCOR Entertainment City (Entertainment City), also formally known as the Bagong Nayong Pilipino Entertainment City Manila project, is an approximately 120 hectare Manila Bay waterfront development west of Roxas Boulevard and south of the SM Corporate District (SM Mall of Asia).
The Entertainment City will be developed from purely private investments including four PAGCOR Licensees, namely Bloomberry Resorts and Hotels Inc., the consortium of Malaysia’s Genting Group and Alliance Global Group Inc. under Travellers International Hotel Group, the SM consortium through Belle Corp., and Japan’s Universal Entertainment Corp. through Tiger Resort Leisure and Entertainment, Inc.
Each locator is required to invest an initial US$ 650 million out of their US$ 1 billion commitment as a Licensee of PAGCOR.
Presently, several projects are on-going at the Entertainment City. Bloomberry has broken ground with its Solaire Manila Project which is an integrated resort complex housing a five-star hotel, gaming facilities, leisure facilities, and restaurants. On the other hand, Universal Entertainment Corp. also broke ground on its 45-hectare Manila Bay Resorts project last January 2012.
A 30 hectare project named the Resorts World Bayshore is the planned development of Travellers International Hotel Group which also features a possible Grand Opera House and performing arts venue with a 2,500 seating capacity. This project is around three times the size of another Travellers development in Newport City located across Terminal 3 of Ninoy Aquino International Airport in Pasay City.
Lastly, the Belle Grande Manila Bay of Belle Corp. is likewise under construction with completion targeted in 2013.
According to PAGCOR estimates, the Entertainment City is projected to generate at least 400,000 jobs and boost tourism in the country by possibly attracting an additional one million tourists annually. It is also expected to contribute at least US$11.5 billion to the economy annually which is roughly 10 percent of the global gaming market.
FIGURE 8: Aerial Shot of Entertainment City
Source: http://i268.photobucket.com/albums/jj23/SNL_oRbz/Manilaaerial5_PP_sized.jpg
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XIV. INDICATIVE TIMETABLE
2012 June - Publication of Invitation to Participate and Bid July - Pre-qualification Conference August/September - Submission of Pre-Qualification Documents Notice of Pre-qualification Release of Draft TCA to Pre-qualified Bidders September/October - Bid Conference November/December - Bid Submission
2013 January - Signing of the TCA December - Turn-over of At-Grade Entertainment City Works
2015 April - Start of Partial Operations
2016 January - Start of Full Operations
2043 January - Turn-over of the NAIA Expressway to DPWH
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