STUDY ON PRIVATE-INITIATIVE INFRASTRUCTURE PROJECTS IN DEVELOPING COUNTRIES IN FY2011
STUDY ON THE NEW CEBU CONTAINER PORT AND THE REDEVELOPMENT OF THE EXISTING CEBU PORT IN THE REPUBLIC OF THE PHILIPPINES
SUMMARY
February 2012
Prepared for: The Ministry of Economy, Trade and Industry
Prepared by: Oriental Consultants Co., Ltd. Ides Co., Ltd. (1) Background and Necessity of the Project
The Study of the development of Cebu Port was started with the JICA report, ”The Study on the Cebu Integrated Port Development Plan in the Republic of the Philippines” in 2002 In the JICA Study the short-term and long-term development plans were proposed including preliminary design, cost estimate, economical/financial analysis and environmental and social impacts assessment.
After the JICA report in 2002, a study on the feasibility of Japan’s ODA loan, which focused particularly on STEP ODA in 2003, was conducted by the study group which was commissioned by the Ministry of Economy, Trade and Industry in Japan.
In the study report made by JICA in 2004, “The Study on the Master Plan for the Strategic Development of the National Port System in the Republic of the Philippines,” PPOSS (Philippine Port System Strategy) worked out a strategic national port master plan with the target year 2024 and an urgent development plan with the target year 2009. Cebu Port is designated as one of six major national gateway ports (major ports for international container trade) in this national plan.
In addition, Economic Research Institute for ASEAN and East Asia (ERIA) issued a report in 2010, “The Comprehensive Asia Development Plan,” in which Cebu Port is also identified as the major port of the Philippines that needs to be developed urgently.
However, due to a policy change by the proponent of CPA, a proposal for development by a private investor and no agreement by the local government, development of the New Cebu Port has not materialized.
Ten years have passed since the JICA study in 2002. Nowadays, the congestion has become more serious due to increasing cargo volume. The congestion of the international and domestic container terminals is remarkable. In order to handle the increasing container cargo, two quayside gantry cranes installed in 2003 were increased to four gantry cranes in 2010 and will increase to five gantry cranes in 2012 with seventeen RTGs. For other cargoesexcept containers, due to the very narrow apron area, congestion during the loading and unloading is much more serious. Therefore, the efficiency of cargo handling decreases and the safety of port operations will become an issue.
According to information from the shipping companies, the water depth in front of the wharf is too shallow for efficient and economical international shipping operation from/to Kaohsiung, Pusan, Hong Kong and Singapore. They have a lease contract for empty container stocking in the city proper because of the lack of available land in the terminal. Deepening of the berth to accommodate bigger container ships is very difficult because of the structure of the berth, pier type with a retaining wall. Expansion of the wharf into the sea is also difficult due to the narrow strait between Cebu Island and Mactan Island.
1 The Aquino Government started in 2010, announced that national projects should utilize a PPP scheme in order to reduce the governmental burden by introducing private investment. DOTC follows the same policy and is examining their handling projects on the practicality of introducing PPP schemes.
In this Study, the past study JICA 2002 is reviewed taking into account the recent economy and port surrounding conditions. Then, the Project will be renewed applying a PPP scheme, i.e., survey how we can introduce private investment to the Project considering finance methods and procedures.
On the other hand, the cooperating proponent, Mitsubishi Corporation, intends to participate in the operation of the new container terminal as one of the Japanese groups considering partnership with Filipino companies and to confirm the realization of the Project. Another proponent, Nippon Steel Corporation, intends to participate in the supply and construction of the large steel pipe sheet pile type structure for the New Cebu Port. This Study examines and evaluates the various procedures for construction of the New Cebu Container Terminal and for port development and shall provide a proposal with action plans from the viewpoints of the private firms in order to ensure implementation.
2 (2) Basic Policy Concerning Decisions on Project Content
The Study comprises the following steps:
1) Selection of the Site for the New Cebu Container Port
In the 2002 JICA Report, five candidate sites were proposed as shown in Figure 1. As the PPP scheme is assumed for this project, the estimated construction cost is used as the most important factor for evaluation of the site selection even though other factors such as ease of access to the New Port and safe navigation of the ships are also important. To compare the sites, rough port planning was done to calculate the major volume of quantity such as dredging, reclamation, container berth and breakwaters to estimate the construction cost. The Consolacion site is the most economical and recommendable considering evaluation factors as shown in Figure 2. Therefore, the preliminary design, cost estimate of the Project implementation, and economical and financial analysis were made based on the Consolacion site.
Figure 1 Candidate Sites of New Cebu Container Port
Cebu Baseport
Minglanilla Consolacion Cebu South Mactan North Mactan South
(Source: JICA Report 2002)
3 Figure 2 Comparison of Construction Cost for Candidate Sites
0% 100% 200% 300% 400%
A1 5% 83% Assume 1.0 Consolacion 12%
A2 111% 29% 1.4 Mactan-North 4%
A3 Breakwater 83% 92% 24% 47% 2.5 Mactan South Reclamation Dredging Road
A4 166% 28% 71% 2.7 Cebu-South
A5 97% 51% 142% 3.0 Minglanilla
(Source: Study Team)
2) Technical Review
The technical items are studied as mentioned below. a) Cargo Demand Forecast
- Economic Framework The Government of the Philippines formulated the basic strategic policy on national economic development entitled, “The Philippine Development Plan 2011 – 2016.” In this Plan, the Government sets the corresponding targets of a high economic growth rate of 7 to 8% per year for at least 6 years. On the other hand, considering growth rate forecast of the International Monetary Fund (IMF), an annual growth rate of 4.9% until 2016 and 5.0% after 2016 has been established in this study as a conservative estimate. - Cargo Demand The actual annual growth rate of the total cargo volume was over 3% after 2000 at Cebu Baseport. A high correlation (coefficient of determination＝0.8297) has been observed between total cargo volume and GRDP. Based on the above growth rate of the economic framework, total cargo volumes are estimated as 16 million tons and 24 million tons in 2020 and 2030 respectively. - Forecast by type of trade Cargo volume of import, export, domestic loading, and domestic unloading are forecasted either through correlation analysis or elasticity analysis with GRDP. Import growth rate is the biggest among all cargoes from 2010 to 2030 and import cargo will reach 7.9 million MT around 2030, which exceeds the domestic unloading volume of 7.8 million MT. - Forecast by Package Type
4 Four package types of bulk cargo, break-bulk cargo, container cargo, and rolling were forecasted. Shares by package type are set for each trade type taking into account the past achievements and recent development. Thus, cargo volume by trade type and by package type can be estimated. - Demand Forecast for International Containers (TEU) To forecast the future foreign container volume, a correlation analysis between container volume (TEU) and GRDP of Region VII is implemented. A high correlation between the two variables is confirmed with a determination coefficient of 94.0%. Resultant foreign container volume is estimated at 343,000 TEU in 2020, and 594,000 TEU in 2030. Cargo volume by trade type by package type can be estimated as shown in Table 1.
Table 1 Summary of Demand Forecast by Trade Type and by Package Type
Foreign Trade Foreign Trade Domestic Trade Year Container Import Bulk Export Bulk Import Export Container Inbound Bulk Outbound Inbound Outbound Inbound Outbound Passenger TEU MT MT Brkbulk (MT ) brkbulk (MT ) TEU (MT) Bulk (MT) Brkbulk (MT) Brkbulk (MT) Rolling (MT) Rolling (MT) Pax 2000 103,944 48,203 14,338 372,268 2,651 299,630 1,366,913 1,494,780 0 0 10,059,048 2001 112,700 70,971 5,542 417,270 2,647 310,845 32,255 2,332 1,741,965 2,251,422 0 0 10,156,654 2002 103,139 53,912 20,000 406,547 2,484 337,370 42,507 6,824 1,696,717 2,611,269 0 0 10,738,198 2003 115,246 73,986 10,027 259,359 3,520 335,092 45,060 9,625 1,913,186 2,143,714 0 0 10,934,435 2004 120,281 60,931 6,000 192,140 31,735 311,282 78,396 99,700 1,852,455 2,255,197 0 0 11,785,915 2005 128,803 44,206 2,000 333,910 21,254 317,317 70,573 37,200 1,740,712 2,146,086 0 0 11,945,178 2006 146,459 75,648 7,800 276,922 30,177 279,442 10,666,071 2007 169,191 42,056 0 350,477 30,100 292,548 10,921,179 2008 157,634 93,287 0 423,989 32,062 295,155 10,321,278 2009 178,879 125,543 0 411,523 8,335 257,469 122,699 71,662 1,780,891 2,421,876 269,250 314,158 9,784,977 2010 202,213 156,373 0 358,674 0 247,295 273,754 194,678 2,030,300 2,303,575 279,634 366,817 10,993,921 2011 202,454 174,708 0 382,455 2,279 278,904 266,807 187,470 2,089,791 2,349,794 291,742 381,172 11,195,137 2012 215,129 195,129 0 408,142 4,648 294,434 259,636 180,064 2,153,060 2,398,818 304,562 396,248 11,396,353 2013 228,425 217,245 0 434,623 7,109 301,115 251,954 172,295 2,218,174 2,448,861 317,834 411,768 11,597,568 2014 242,372 241,163 0 461,922 9,664 307,946 243,739 164,153 2,285,186 2,499,945 331,575 427,745 11,798,784 2015 257,003 266,998 0 490,061 12,317 325,429 234,970 155,625 2,354,150 2,552,090 345,798 444,190 12,000,000 2016 272,351 294,871 0 519,063 15,070 332,810 225,626 146,700 2,425,122 2,605,319 360,519 461,115 12,000,000 2017 288,779 325,344 0 549,681 17,933 340,523 215,787 137,419 2,499,377 2,660,698 375,937 478,721 12,000,000 2018 306,029 358,190 0 581,264 20,905 348,414 205,316 127,708 2,575,830 2,717,250 391,900 496,846 12,000,000 2019 324,142 393,560 0 613,836 23,988 356,486 194,187 117,554 2,654,543 2,774,999 408,427 515,505 12,000,000 2020 343,160 431,616 0 647,424 27,186 364,744 182,372 106,942 2,735,582 2,833,972 425,535 534,712 12,000,000 2021 363,128 460,195 0 690,292 27,730 373,863 186,931 109,081 2,803,972 2,890,651 436,173 545,406 12,000,000 2022 384,096 490,202 0 735,304 28,285 383,209 191,605 111,263 2,874,071 2,948,464 447,078 556,314 12,000,000 2023 406,111 521,710 0 782,566 28,850 392,790 196,395 113,488 2,945,923 3,007,433 458,255 567,440 12,000,000 2024 429,228 554,794 0 832,191 29,427 402,609 201,305 115,758 3,019,571 3,067,582 469,711 578,789 12,000,000 2025 453,500 589,532 0 884,298 30,016 412,675 206,337 118,073 3,095,060 3,128,934 481,454 590,365 12,000,000 2026 478,986 626,006 0 939,010 30,616 422,992 211,496 120,434 3,172,436 3,191,512 493,490 602,172 12,000,000 2027 505,746 664,305 0 996,457 31,229 433,566 216,783 122,843 3,251,747 3,255,343 505,827 614,216 12,000,000 2028 533,845 704,518 0 1,056,777 31,853 444,405 222,203 125,300 3,333,041 3,320,449 518,473 626,500 12,000,000 2029 563,348 746,742 0 1,120,113 32,490 455,516 227,758 127,806 3,416,367 3,386,858 531,435 639,030 12,000,000 2030 594,326 791,077 0 1,186,615 33,140 466,904 233,452 130,362 3,501,776 3,454,596 544,721 651,810 12,000,000 (Source: Study Team) b) Port Planning
- New Cebu Port
Among international container, domestic container, international bulk and international general cargo, the rate of increase in the international container demand forecast is 5.5% per year and the others are 2.5%. The tariff of domestic container handling is set at 60 - 70% of the international container value. Therefore, the priority to move international containers to the New Port is thought to be highest from the viewpoint of financial feasibility for the private terminal operator.
The timing of opening the New Port should be adjusted to the time the cargo volume of the existing port reaches
5 its full capacity. The handling capacity of the international container terminal of the existing port is estimated as approximately 300,000 TEU per year. Referring to the result of the demand forecast curve, the time of opening the New Port is proposed to be the year 2018. The initial capacity of container handling of the New Port is expected to be 400,000 TEU per year and is scheduled to increase to 500,000 TEU per year by 2023 by installing additional QCs and RTGs. The demand forecast of international container and New Port development are shown in Figure 3.
Figure 3 Demand Forecast of International Container and New Port Development
700 Phase 2 Expansion 600
Additional QC/RTG = 500,000TEU 500
Phase 1 New Port = 400,000TEU 400 Existing Terminal Capacity = 300,000TEU 300
Throughput (1,000 TEU) (1,000 Throughput 200
100 Past Record Forecast
0 2018 2023 2000 2005 2010 2015 2020 2025 2030 Year
(Source: Study Team)
The berth length of the New Port is considered as two berths in order to prevent ship-waiting time. With a long berth one next generation container ship of 3,000 TEU and one present average sized ship of 1,000 TEU can berth at the same time. Also, the long berth can accommodate two ships of the present maximum size of 2,000 TEU at the same time as shown Figure 4.
Figure 4 Berth Length of New Port
LOA 240m (3,000 TEU) LOA 150m (1,000TEU) Full Loaded Draft = 12.1m Full Loaded Draft =8.8m
Future Maximum Size Present Average Size
LOA 180m (2,000TEU) LOA 180m (2,000TEU) Full Loaded Draft = 11.0m Full Loaded Draft = 11.0m
Pres enyt Maximum Size Pres ent Maximum Size
Berth Length 450m (Source: Study Team)
The location of the reclamation area has been decided to be the area where sea level is around 0.00 m in order to
6 minimize reclamation and dredging volume and the location of the berth to be the area where sea level is around -13.0 m. The reclamation area is moved 200 m to the south from the JICA study. The reclamation area is located approximately 250 m from the shoreline so that the mangrove plants can be saved by water exchange through tide flow. The access road is planned to be an elevated bridge-way for the same reason. The layout plan of New Cebu Port is shown in Figure 5.
Figure 5 Layout Plan of Phase 1 Development (New Port)
Reclamation 350m x 600m
Berth Length 450m Turning Basin
(Source: Study Team)
The container terminal layout is planned with consideration of the maximum handling capacity of 500,000 TEU containers. Four gantry cranes (initially three) with a capacity of 15 container rows, a 450 m long berth, a terminal area, and a back yard for port operation facilities have been studied as shown Figure 6. Cebu North Coastal Road is one of the major development projects of the DPWH in the Metro Cebu area to develop Cebu province. A length of 1.39 km out of 6 km of Cebu North Coastal Road was completed in 2009 by DPWH. The new access road of the New Cebu Container Port will be connected to Cebu North Coastal Road. Two traffic lanes are required for each direction based on the traffic forecast and an elevated bridge-way on the shoreline and a cutting mound type road near Cebu North Coastal Road has been designed. A trumpet type interchange near Cebu North Coastal Road will be constructed by DPWH. The terminal layout and bird’s eye view are shown in Figures 6 and 7.
7 Figure 6 Terminal Layout Plan of New Cebu Port
(Source: Study Team)
Figure 7 Bird’s Eye View of New Cebu Port
(Source: Study Team)
8 - Cebu Baseport A study must be done on reorganizing the existing port functions after shifting the international container terminal from the existing port to the New Port. In addition, in redevelopment of the existing port, it is also important to establish a safe and convenient port station and to create commercial space closely related to the people’s life activities. The background and necessity of the redevelopment Project are explained from following points: - CPA has to reshuffle the layout of the existing port based on the future port demand forecast. - Income from the international container terminal will vanish for the existing port. It is considered that the Project is a financially closed unit in which the financial aspects of the New Port are separate from those of the existing port. In order to raise the feasibility of the Project, cost saving and introduction of alternative income sources will be required. - It has been observed that the high risk of accidents in the cargo handling operation and passenger traffic is mainly due to the narrowness of the cargo yard in the vicinity of the quay-wall. It is essential that CPA ensure improvement of the safety. - The guarantee of a safe and comfortable trip is important for passengers who use the port to depart to / arrive from Manila, Mindanao, etc. using a ferry or RORO. - To improve the financial status of regional citizens, a strategy must be developed where the port, as a center of commercial activities, will activate the economy. The PPP policy introducing private finance for development is based on this activation of the economy. - Taking advantage of the location close to the urban core of Cebu, a part of the Cebu Baseport area will be redeveloped for commercial and business use. Thereby, a combination of town and open space is created and will contribute to the promotion of redevelopment in the urban core.
The Present Conditions of the Existing Port
In order to clarify the present condition of the existing port, the berthing time of each berth, berth occupancy ratio, cargo operation (in and out), yard operation, handling capacity, etc. should be observed and analyzed. One of the most important factors in port planning is the berth occupancy ratio, which is shown in Figure 8 for international container and bulk berth.
9 Figure 8 Berth Occupancy Ratio of International Terminal
100% Others 90% Rice 80% Container 67% 70% 8% 54% 60%
50% 23% 40%
Berth Occupancy 25% 27% 30% 57% 8% 20% 5% 13%
10% 23% 20% 14% 0% B2 B3 B4 B5 (L=130.5m) (L=128.0m) (L=128.0m) (L=128.5m) Berth No. (Source: Study Team)
Port Planning of the Existing Port
The basic plan of the Project is as follows: - International container terminal will be moved to the New Port according to the increase in port demand (scheduled by 2018). - Evaluate whether the capacity of the existing port is adequate or not before opening of the New Port. - After commencement of operation of the New Port, study is required on facility investment of the existing port as the short-term development plan 2020. - Minimum required development on the existing port should be recommended. A PPP scheme should be introduced on redevelopment by leasing the CPA owned port land so that the gained income will complement the budget of the existing port. - For the middle-term development plan targeted in 2030, some port functions should be relocated section by section to the New Port when the capacity of the existing port is saturated. - For the further long-term plan after 2030, only the passenger terminal should remain at the existing port and all cargo functions should be moved to the New Port.
Degrees of Congestion of International Terminal
The international terminal handles both container and bulk / general cargo and it is not easy to evaluate congestion separating these functions. Therefore, it is assumed that all international cargoes will be handled at the berths B2 - B5 (4 berths, 515 m long) by 2018 as discussed. The limit capacity of the berth occupancy is assumed at 65%. The following figures show the curve of demand for international container and international bulk/general cargo
10 calculated by the commodity-wise demand forecast.
Figure 9 Demand Forecast of International Container and Rate of Increase from Present Year 2011
International Container (TEU) 700
600 594
500
400 343 306
300 70% Increase 202 200 Throughput (1,000 TEU) (1,000 Throughput 51% Increase
100
0 2000 2005 2010 2015 2020 2025 2030 Year
(Source: Study Team)
Figure 10 Demand Forecast of Bulk / General Cargo and Rate of Increase from Present Year 2011
Import/Export Bulk (MT) 2,500
2,000
1,500 1,106 960 1,000 98% Increase 559
Throughput (1,000MT) Throughput 500 72% Increase
0 2000 2005 2010 2015 2020 2025 2030 Year (Source: Study Team)
From these figures, international containers are estimated to increase 51% over the present throughput volume, while international bulk / general cargo will increase 72% by 2018. On the other hand, the current berth occupancy ratios of international container and bulk / general cargo berths (B2 - B5) are estimated at 15% (container) and 29% (bulk / general). From this information, berth occupancy before New Port opening (2018) is calculated as shown in Figure 11. It is foreseen that the occupancy ratio will increase to 71% (B2 - B5 total), which will nearly reach the maximum capacity.
11 Figure 11 Forecast of Berth Occupancy Ratio before Opening New Port (2018) Berth Berth Total Berth Occupancy Occupancy Occupancy Container Bulk/Brkbulk At present 2011 15% 29% 43% 51% Increase 72% Increase 2018年 22% 49% 71% (Source: Study Team)
The same calculations were made for other domestic containers, bulk, general cargoes and passengers to prepare the short-term development plan in 2020.
The Suitable Location of Commercial and Public Spaces for Development
The location of commercial development sites by private sectors or public space sites such as a parks, etc. at Cebu Baseport, is considered from the following viewpoints: - Requirement of facilities and equipment as renewal port - Appropriate location, function and scale as a commercial/public area in consideration of surrounding land use and the city master plan - Circulation of port-related traffic and other traffic - Intention of redevelopment by private landowners in the port zone - Private developer’s view on redevelopment - Profitability of CPA land by sale or lease.
Regarding the location of the commercial development sites or public sites at Cebu Baseport, the following three places are assumed as proposed sites with the Existing International Container Port area recommended as the most feasible space. - Existing International Container Port area - Existing private lots in Port area - The area around Fort San Pedro
12 Figure 12 Proposed Sites for Commercial Development or Public Space
SitesSite for Commercial proposed or Public Spaces for
(Source: Study Team)
Based on the above study, the Redevelopment Plan of the Baseport and Bird’s Eye View are shown Figures 13 and 14.
Figure 13 Redevelopment Plan of Cebu Baseport (2020)
International Domestic Domestic Bulk/General Container Ferry/RORO/General
Passenger
Superferry
Bulk/General
Container Yard
Sky-Walk for Passenger
Parking Parking Convert Terminal (Pier 1 & 3) Port Commercial Center Passenger → General Cargo
Commercial Development
(Source: Study Team)
13 Figure 14 Bird’s Eye View of Cebu Baseport (2020)
(Source: Study Team)
Port Plan 2030 The proposed port layout plan for 2030 is shown in Figure 15. In this plan, parts of port functions are moved to the New Port when the capacities of each function are saturated due to an increase in demand. According to the demand forecast study, initially, congestion of the international bulk / general cargo terminal will become serious followed by the domestic container terminal. The proposed plan is dependent on these port functions (part of the international bulk / general and the entire domestic container will be moved to New Port) being moved from the existing port.
14 Figure 15 Proposed Layout Plan of Existing Port 2030
International Domestic Bulk/General Ferry/RORO/General
Passenger
Superferry
Bulk/General
Sky-Walk for Passenger
Parking Parking
Port Commercial Center
Commercial Development
(Source: Study Team)
Port Plan after 2030 The proposed port layout plan after 2030 is shown in Figure 16. Port related parties have suggested that most of the cargo terminals should eventually be moved to the newly developed port outside the downtown area of the city in view of the social environment as well as the safety and efficiency of port operation as the present port space is quite narrow. This study follows the same concept; thus, the plans of 2020 and 2030 represent the vision in the process of this final port development strategy. Bird’s Eye View is shown in Figure 17.
15 Figure 16 Proposed Layout Plan of Existing Port after 2030
Terminals will be moved to outside the port, then waterfront area might be Passenger Terminal redeveloped as new commercial Complex district Superferry, Cruise-ship
Passenger boats
Ship Passenger Center
Parking Parking
Port Commercial Center
Commercial Development
(Source: Study Team)
Figure 17 Bird’s Eye View of Existing Port after 2030
(Source: Study Team) c) Preliminary Design
- New Cebu Port The location of the reclamation area was moved to the south about 200 m from the location noted in the JICA study in 2002 in order to minimize dredging volume. The major structure of the container berth was designed based on the existing seabed elevation and soil condition and it was found that steel pipe sheet pile type with
16 anchor pile is the most economical and suitable for the new container port. Two traffic lanes are required for each direction based on the traffic forecast and a bridge type superstructure in the coastline area and a cutting mound type road near Cebu North Coastal Road is recommended. The typical substructure type will be multi-column with a pier-head type pier and a bored pile foundation. The column section will be a circular shape, especially in the seashore area, to minimize the streaming inhibition because it is the most economical and widely used in the Philippines.
- Existing Cebu Port For the structural type of pontoons, several options are available such as steel, fiberglass, concrete or hybrid-concrete, etc. Considering the cost, durability, ease of local procurement and construction capabilities, concrete type pontoons are proposed. For the foundation of the building, precast concrete piles are proposed because they have good durability, low cost and are easy to procure in the local market. The structure of the building is to be made of RC beam and slab. d) Construction Cost
The Project cost estimated for the construction of New Cebu Port and the redevelopment of Existing Cebu Port separately. The Project cost consists of civil work, building, utilities, container handling equipment, detailed engineering cost, construction supervision cost, right of way acquisition cost and administration cost. Based on the plan of New Cebu Port (Figure 6) and the redevelopment plan of Existing Cebu Port (Figure 13), rough quantities were calculated for the facilities and estimated the cost. Cost of right of way for the access road is estimated using the current price of the public works. e) Environmental and Social Impacts
For the assessment of environmental issues, dredged materials from the New Cebu Port will be disposed in the deep sea. In order to mitigate seawater contamination, a silt protector should be provided during the disposal of the dredged material. There is small area of mangrove trees in the proposed site. It is assured that the number of new mangrove trees that are planted will exceed the numbers that are cut down during the construction as instructed by DENR.
3) Justification of the Project
The justification of the Project is evaluated by studying the following items. a) Study of Investment Demarcation between Public and Private
In general, in the Philippines, fundamental facilities are the responsibility of the public while operation is the responsibility of private companies. Firstly, construction costs, which should be kept as low as possible, reclamation costs, which need an application to the central government for approval, berth cost and pavement
17 costs, which are relatively high, should be burdened by the public. Private institutions should shoulder the over investments and expenditures as much as possible. Whether funds for facilities are to be provided by public or private sectors, should be studied through pattern analysis. b) Implementation Schedule
Based on the above demarcation, the implementation schedule is verified by each demarcation and reviewed for expected completion and commencement of operation based on the demand forecast. c) Evaluation of Finance
The possibilities to realize the both project for construction are studied including the case study of the facilities to be shouldered by public or private. d) Contributed Economic Effectiveness
The contribution to economic effectiveness is considered and verified in the cases with execution and without execution.
4) Proposal toward Implementation of the Project
The proposals of the Study Team are compiled based on the above verifications. a) Appropriate Demarcation of Public/Private Investments in View of Commencement of Operation and Profitability
The timing of commencement and appropriate demarcation is proposed in consideration of the implementation schedule and financial evaluation. b) Utilization of Japan ODA Finance Program
The amount and investment objectives are proposed for the Japan ODA.
18 (3) Description of the Project
New Cebu Container Port will be constructed to cope with the congestion of the existing Cebu port and the shallow water depth of the container berths. The redevelopment of the existing Cebu port will be implemented including vacant area of the container terminal. The component of the new Cebu port is to construct international container berths, container terminal and port related facilities and existing port is to construct expansion of berth, floating passenger berths, domestic container terminal and passenger terminal.
1) Implementation Project Cost
The Project cost has been estimated for the New Cebu Port and the redevelopment of the existing Baseport.
The Project cost consists of civil work, building, utilities, container handling equipment, detailed engineering cost, construction supervision cost, ROW acquisition cost, and administration cost. a) Implementation Cost of New Cebu Port
Table 2 New Cebu Port (Unit : 1,000 Peso) Local Foreign Item Description Total Remarks Component Component 1 Civil works for container terminal 1,024,195 2,302,518 3,326,713 2 Port Facilities 129,286 213,243 342,530 3 Building works 48,909 83,453 132,362 4 Access Road 129,827 241,107 370,934 5 Vessel traffic management system 1,637 128,748 130,385 6 Cargo handling equipment 269,103 2,421,926 2,691,029 Operator supply 7 Others 30,975 - 30,975 Total construction cost (1000 peso) 1,633,932 5,390,995 7,024,927 8 Consulting cost (Engineering cost) 147,523 344,221 491,745 Total (1 to 8) 1,781,455 5,735,217 7,516,672 Indirect cost 9 Admi & Eng. Overhead by PMO 105,374 - 105,374 Duties / tariff (3% of equipment & 10 material) by CPA 21,075 - 21,075 11 Duties / tariff by operator 52,687 - 52,687 12 Contingency 105,374 245,872 351,246 13 VAT (12% of total cost) by CPA 842,991 - 842,991 14 VAT by private operator 231,823 - 231,823 Total (9 to 14) 1,359,323 245,872 1,605,196 Grand total (1000 peso) 3,140,779 5,981,089 9,121,868 Total 16.42 bil. Yen （ ） Exchange rate : 1 Peso=1.8 Yen, 1$=42.8 pesos (Source: Study Team)
19 b) Existing Baseport
Table 3 Existing Baseport (Unit : 1,000 Peso) Item DescriptionLocal Component Foreign Component Total Remarks 1 Berth Expansion（Width 10m） 36,980 147,920 184,900 2 Floating Bert (Pontoon) 39,527 158,108 197,635 3 Container Yard 11,479 17,218 28,697 4 Terminal Building 53,853 80,780 134,633 5 Demolition of Existing Terminal Bldgs 1,238 310 1,548 6 Others 7,786 21,163 28,949 Total (1000 peso) 150,863 425,499 576,362 8 Consultancy Service (Engineering Cost 17,291 40,345 57,636 Total (1 to 8) 168,154 465,844 633,998 Indirect Cost Administrative & Engineering 9 Overhead by PMO 8,645 - 8,645 Duties/Tariff (3% of Equipment & 10 Materials) by CPA 865 - 865 11 Duties/Tariff by CPA 2,161 - 2,161 12 Contingency Cost 8,645 20,173 28,818 13 VAT (12% of Total Cost ) by CPA 69,163 - 69,163 14 VAT by Private Operator 9,510 - 9,510 Total (9 to 14) 99,000 20,200 119,162 Grand Total (1000 peso) 267,154 486,044 753,160 Total 1.36 bil. Yen （Exchange rate : 1 Peso=1.8 Yen, 1$=42.8 pesos） (Source: Study Team)
2) Outline of Preliminary Financial and Economic Analysis a) Cebu New Port a)-1 Financial Evaluation of the Project
- FIRR (Base Case): Overall Project 8.98%, CPA 4.34%, Operator 18.01% - Sensitivity Analysis
Sensitivity analysis was carried out for a total of 6 cases: cost increase (Case I), revenue decrease (Case II), and both cost increase and revenue decrease (Case III). In the case of 10% cost and revenue variance for the Overall Project, the FIRR are 7.62% (Case I), 7.48% (Case II), and 6.13% (Case III) as shown below.
20 Table 4 Financial Evaluation of the Project
Cost Increase By 10% Cost Increase By 20% Case I Overall Project CPA Operator Overall Project CPA Operator 7.62% 3.51% 15.61% 6.39% 2.76% 13.48% Revenue Decrease By 10% Revenue Decrease By 20% Case II Overall Project CPA Operator Overall Project CPA Operator 7.48% 3.42% 15.36% 5.81% 2.41% 12.48% Cost Increase & Revenue Decrease By 10% Cost Increase & Revenue Decrease By 20% Case III Overall Project CPA Operator Overall Project CPA Operator 6.13% 2.60% 13.03% 3.16% N.A 7.98% (Source: Study Team)
Assuming a Weighted Average Cost of Capital (WACC) of 2.16% for CPA and 6.43% for TO, both of which are derived from financial plans, the resulting NPVs are PHP 2,087 million and PHP 3,366 million, respectively. Further, B/C Ratios are 1.29 for CPA and 1.59 for TO under the same discount rates. a)-2 Economic Evaluation
- EIRR (Base Case): 20.02% - Sensitivity Analysis
As shown in the table below, the New Cebu Port Project has an EIRR of more than 15% for all of the cases in the sensitivity analysis except for the worst scenario case.
Table 5 Economic Evaluation of the Project
Cost Increase By 10% Cost Increase By 20% Case I 18.03% 16.32% Benefit Decreases By 10% Benefit Decreases By 20% Case II 17.82% 15.55% Cost Increase & Benefit Decrease By 10% Each Cost Increase & Benefit Decrease By 20% Each Case III 15.97% 12.36% (Source: Study Team)
Assuming the social discount rate of 15%, the Benefit Cost ratio (B/C) for the Base Case is 1.29. On the other hand, the NPV of the Project is calculated at PHP 1,860 million. b) Cebu Baseport b)-1 Financial Evaluation of the Project
- FIRR (Base Case): 5.81% - Sensitivity Analysis
21 Sensitivity analysis was carried out for the same 6 cases as the financial evaluation. In the case of a 10% cost and revenue variance for the Project, FIRRs are 4.86% (Case I), 4.76% (Case II), and 3.81% (Case III) as shown below.
Table 6 Financial Evaluation of the Project Cost Increase By 10% Cost Increase By 20% Case I 4.86% 4.00% Revenue Decrease By 10% Revenue Decrease By 20% Case II 4.76% 3.59% Cost Increase & Revenue Decrease By 10% Cost Increase & Revenue Decrease By 20% Case III 3.81% N.A (Source: Study Team)
Assuming the WACC is 7.0%, the NPV of the Cebu Baseport Project is calculated at PHP -85 million and the B/C ratio is 0.89. b)-2 Economic Evaluation of the Project
EIRR (Base Case): 20.97% Sensitivity Analysis
As shown in the table below, the Cebu Baseport Project has an EIRR of more than 15% for all of the cases in the sensitivity analysis except for the worst scenario case.
Table 7 Economic Evaluation of the Project Cost Increase By 10% Cost Increase By 20% Case I 19.18% 17.65% Benefits Decrease By 10% Benefits Decrease By 20% Case II 19.00% 16.96% Cost Increase & Revenue Decrease By 10% Cost Increase & Revenue Decrease By 20% Case III 17.34% 14.09% (Source: Study Team)
Assuming the social discount rate of 15%, the Benefit Cost ratio (B/C) for the Base Case is 1.24. On the other hand, the NPV of the Project is calculated at PHP 105 million.
In general, the New Cebu Port Project has both high FIRR and EIRR values except for the worst scenario case in the sensitivity analysis. On the other hand, there is a possibility that the FIRR of the Cebu Baseport Project is less than the WACC of the Project while the EIRR of the Project is expected to be higher than 20%. It should be noted however, the FIRR of the Baseport Project will improve and the financial problems mentioned above will be resolved if the CPA plot is sold instead of leased or if a project fund with lower interest is secured through ODA assistance. Taking these circumstances into consideration, both Projects can be judged to be sound and feasible.
22 3) Evaluation of Environmental and Social Impacts
3)-1 General
This Study focuses on the environmental and social impacts in the area of the New Cebu Port about 10 km north of the existing Baseport and the redevelopment area in the existing Baseport. - Seawater Quality Dissolved oxygen content and chemical oxygen level are much higher than the DENR limits. The levels of cadmium in the New Port and arsenic at the Cebu Port site are critical. Other heavy metals are below the DENR limits but excessive levels of total coliform and fecal coliform, both indicators of pollution from anthropogenic sources, were observed to be very high in the New Port and existing Baseport. - Sea Bottom Sediment Quality Lead pollution in Baseport and New Port is significantly higher at ten times the Japan limit. Other heavy metals are below the DENR limits. The chemical oxygen level is far higher than the DENR limits in both ports. - Air and Noise All levels of air quality parameters fall below the maximum limits set by DENR. This indicates relatively good air quality at these sites. - Marine Ecology In the existing Baseport, the absence of marine vegetation and macrobenthos, which fish feed on, and regular dredging in the harbor limit the survival of fishes in the area. The mangroves along the shoreline near the New Port site showed the characteristic features of the substrate in the study area. Corals and associated macrobenthos were observed near the Baseport site. The sea grasses provide nutrients for juvenile fishes and other marine organisms in the area. No rare, threatened or endangered species of algae have been encountered.
Magnitude of development is as follows: - New Port : 23 ha reclamation, 450 m berth, 16,000 m³ dredging and 600 m access road - Baseport : 270 m pontoon, 4,800 m² passenger terminal, 4,000 m² yard, 8.5 ha business center by PPP.
3) -2 Positive Environmental and Social Impacts of the Project
With implementation of the New Cebu Port and redevelopment of Cebu Baseport, environmental improvement around the Project site is expected as follows: - By construction of the New Cebu Port, larger-sized vessels with emission control systems can use the port. Reduction of CO₂ emission per TEU is expected. Due to construction of the New Cebu Port, the access distance from Mactan Island will be shortened and the congestion around the existing Baseport will thus be reduced. - With construction of the New Cebu Port and redevelopment of the Baseport, cargo volumes will increase and industrial/regional development in the hinterland and surrounding areas will follow. An increase in job opportunities and local economic development is expected.
23 3)-3 Negative Environmental and Social Impacts of the Project
All impacts on the environment and society are relatively good at both sites. The remarkable environmental and social impacts for the both sites are indicated below;
New Cebu Port Land acquisition for the new access road before the construction of new port may cause a rise in land prices in Consolacion, but considering the acquired land is small area and not located in the center of Consolacion, the impact to the land price will be limited compared with the common national road construction. A negative impact on marginal fishing is irreversible, but minimal in magnitude because the few who catch fish nearby only get a small quantity of small-sized anchovies and small roundscads. Operation-phase impacts of the Project will mainly be positive and highly probable, i.e., increased land values, improved opportunities for livelihood, employment and income, economy and growth, enhanced port productivity, efficiency and berth capacity and improved welfare of women and children. All these are reversible and vary in terms of duration ranging from short to long-term.
Baseport Operation of constructed facilities is expected to generate mainly positive impacts including: improvement in the overall CPA efficiency in handling of cargoes and passengers, increase in space for business and recreation, increased employment and livelihood opportunities, improved CPA financial resources, improvement in workers’ living standards and increased business and tourism activities and importantly.
3)-4 Study of Findings and Action Plan a) New Cebu Port
- According to DENR, an EIA shall be prepared to apply for ECC because of the New Port. - Land acquisition for construction of the access road is necessary. Coordination with DPWH and Consolacion town is necessary to adjust the intersection and transition area to the Cebu North Coastal Road designed by DPWH. - EIA should provide legal proof to show its authority to reclaim and develop the New Cebu Port site. This should be done together with an application for a special land patent from the Land Management Bureau of DENR and a Presidential Proclamation for reservation of the Project site as a container port zone. - CPA must consult with DENR Provincial Environment and Natural Resource Office (PENRO) and/or the Community Environment and Natural Resource Office (CENRO) as well as the Protected Area, Wildlife and Coastal Zone Management Service of DENR-7 to obtain clearance to acquire and develop the port site. - CPA must also coordinate with the Philippine Reclamation Authority on its plan to carry out offshore reclamation of Consolacion town. - CPA must coordinate with DENR and Philippine Coast Guard Regional Office – Region 7 for confirmation of designated/approved disposal site for dredged materials during port construction.
24 b) Cebu Baseport
Since the Cebu Baseport involves redevelopment including expansion/modification of the existing port facility, existing DENR guidelines indicate that the EPRMP document must be prepared by CPA.
25 (4) Implementation Schedule
1) New Cebu Port
After the authorization and approval of the New Cebu container Port by the Philippine government, the following will be done: the application for a soft loan, employment of the consultant, conduction of detailed design, preparation of PQ and tender documents, selection of contractor of the civil works and implementation of construction of the works. It is estimated the period of implementation of detailed design and preparation of tender documents, construction of civil works and fabrication/installation of container handling equipment are one year, two and a half years, and one year respectively.
Table 8 Implementation Schedule of New Cebu Port (PPP Scheme)
Description of Works Month 2011 2012 2013 2014 2015 2016 2017 2018 Container Terminal Development 1 Implementing Public Portion by CPA (1) Study on New Cebu Container Port by METI 6 (2) Submission and Review of New Cebu Container Port to NEDA by DOTC 3 (3) Preparation of EIA and Obtain ECC by CPA 3 (4) Financial Arrangement and Requests for Project Loan by CPA/DOTC 12 (5) Procurement of Consultants for the engineering study 3 (6) DD - PQ + T/D Preparation by Consultant 12 (7) PQ for procurement of contractor by CPA 3 (8) Tendering for procurement of contractor by CPA 6 (9) Contract negotiation and signing the contract with CPA 3 (10) Construction works 30 1) Dredging works 4 2) Container berth construction 18 3) Revetment construction 12 4) Reclamation works 12 5) Road and pavement construction 15 6) Building works construction 10 7) Utility works construction 12 8) Access road construction 18 2 Procurement of Private Investor (Concessioner) (1) Project Resolution by Government DOTC/CPA 1) Preparation and Submission of PPP Scheme by CPA 3 2) Evaluation and approval by CPA Board 3 (2) Transaction (Procurement ) of Private Investor 1) Document Preparation of PQ and Tender Documents 6 2) PQ process for short list investors for tendering 4 3) Procurement by Tendering 8 4) Contract negotiation and Signing the contract with CPA/DOTC 5 (3) Installation of the Equipment and Auxiliary Facility 1) Engineering study of facilities 3 2) Fabrication and Installation of the Equipment 12 3) Supply and preparatory work of Auxiliary Facility 6 3 Commencement of Operation of Container Terminal
(Source: Study Team)
2) Existing Baseport
After the authorization and approval of the New Cebu container Port by the Philippine government, the following will be done: application for a soft loan, employment of consultant, conduction of detailed design, preparation of PQ and tender documents, selection of contractor of the civil works and implementation of construction of the works. It is estimated the period of implementation of detailed design and preparation of tender documents, construction of marine works and construction of business/commercial center are eight months, fifteen months and two years respectively.
26 Table 9 Implementation Schedule of Cebu Baseport (PPP Scheme) 2014 to Description of Works Month 2011 2012 2013 2018 2019 2020 2021 2017 Redevelopment of Baseport 1 Implementing Public Portion by CPA (1) Study on New Cebu Container Port by METI 6 (2) Submission and Review of New Cebu Container Port to NEDA by DOTC 3 (3) Preparation of EIA and Obtain ECC by CPA 3 (4) Financial Arrangement and Requests for Project Loan by CPA/DOTC 12 (5) Procurement of Consultants for the engineering study 3 (6) DD - PQ + T/D Preparation by Consultant 6 (7) PQ for procurement of contractor by CPA 3 (8) Tendering for procurement of contractor by CPA 4 (9) Contract negotiation and signing the contract with CPA 3 (10) Construction works 15 1) Demolision of Bldgs 4 2) Widening of wharf (w=10m) 10 3) Fabrication and instllation of pontoon (45mx15m) 12 4) Yard Construction 4 5) Teminal bldg (3 stories) 10 2 Procurement of Private Investor (Concessioner) (1) Project Resolution by Government DOTC/CPA 1) Preparation and Submission of PPP Scheme by CPA 3 2) Evaluation and approval by CPA Board 3 (2) Transaction (Procurement ) of Private Investor 1) Document Preparation of PQ and Tender Documents 3 2) PQ process for short list investors for tendering 3 3) Procurement by Tendering 4 4) Contract negotiation and Signing the contract with CPA/DOTC 3 (3) Construction of Business and Commercial Center 24 3 Commencement of Operation of Redevelopment Plan of Baseport
(Source: Study Team)
27 (5) Feasibility of Implementation
The purpose of this section of the report is to evaluate both the Cebu New Port and Baseport Projects from financial and economic, technological, capability of the project implementation by CPA and advantages for Japanese private firms.
1) Cebu New Port
- Regarding the Base Case, the Project is judged to be financially viable because the FIRR are expected to be higher than WACC both for CPA portion and TO portion. In addition, EIRR of the Project is expected to be about 20%, which is higher than the cut-off rate of 15% currently adopted in the Philippines. The Project is judged to be healthy from a national economic viewpoint. Cash balance will be minus from 2018, but turns to be plus after the two years of operation. Taking these circumstances into consideration, the Project can be judged to be sound and feasible.
- A comparative study of five proposed sites was done to select the most appropriate port in the JICA study in 2002. Specific port planning was done for the main facility such as berth, reclamation, dredging and breakwater to calculate rough quantities for the proposed sites and the cost estimate in this study. Based on the comparison, the Consolacion site is the most recommendable from the economical aspects, accessibility to the Baseport, future expansion, adjustability to the airport and environmental conditions.
- The port function of the Baseport is international cargoes (container, bulk and general cargo) and domestic cargoes (container, ferry and RORO) and passengers. Maintaining this function, international container should be transferred to the New Port considering a PPP scheme. The rate of increase in the international container demand forecast is 5.5% per year. The rate is not very high compared to the rates of other major ports in Asia. Therefore, if we assume the international container terminal should be moved to the New Port, the initial investment share for the public sector should be set at a high level in order to reduce the burden encountered by the private sector.
- The timing of opening the New Port should be adjusted to the time the cargo volume of the existing port reaches capacity. The handling capacity of the international container terminal of the existing port is estimated as approximately 300,000 TEU per year. The capacity of container handling should be increased step by step considering the efficiency and feasibility of the New Port.
- CPA became independent of PPA in 1992 and operates and maintains all ports in Cebu province. CPA is financially sound and designates the new PMO to operate the new project. A financial specialist and lawyer should be employed for the Project because CPA has no experience with PPP schemes.
28 2) Cebu Baseport
- Regarding the Base Case, FIRR of the Project is estimated at 5.81%, which is less than WACC. The FIRR of the Project will however, become higher than WACC if a project fund with a lower interest rate such as an ODA loan and CPA’s retained earning can be used. In addition, EIRR of the Project is expected to be about 20%, which is higher than the cut-off rate of 15% currently adopted in the Philippines. Therefore, the Project is judged to be healthy from a national economic viewpoint. Cash flow of CPA Re-Development Project was calculated based on the assumption that CPA will borrow a long-term loan from Treasury Bank. The cash balance of CPA was minus for almost all of the period, and the minus in cash balance will be accumulated. Selling or leasing the port land should be considered carefully giving comprehensive consideration for the best use of the port land.
- Based on the movement of international container to the New Port, Baseport redevelopment should be planned to use the vacant area of the international container yard for mitigation of the congestion of the port area for target year 2020. The cargo operation is carried out in a way that the cargo transported from private storage by trucks is directly loaded onto the ship; therefore, berth occupancy is taken into account quantitatively for the port planning method.
- Income from the international container terminal will vanish due to the Baseport Redevelopment Project. In order to raise the feasibility of the Project, cost saving and introduction of alternative income sources will be required.
- Regarding the port layout of 2030, overflow cargo from the port capacity should be moved to the New Port. Port related parties have suggested that most of the cargo terminals should eventually be moved to the newly developed port outside the downtown area of the city.
Taking the variety of elements mentioned above into consideration, both the Cebu New Port and Baseport Projects are judged to be feasible for implementation from financial, economic, technological, and social and environmental aspects.
29 (6) Possible Japanese Firms’ Participation in the Proposed Project
1) Cebu New Port
Regarding the participation in the terminal operation, all Japanese operating oversea terminals are efficiently and satisfactorily managed in Indonesia and Vietnam. As Japanese construction firms and suppliers have also acquired knowledge in international competitive bidding, there is a high possibility of participation in the construction of the New Cebu Container Terminal because of their experience in the Philippines.
2) Cebu Baseport
Japanese consulting firms have extensive experience in redevelopment of Japanese ports; therefore, there is an advantage for Japanese Consulting Firms to participate in the Study for Redevelopment of the Baseport. Japanese consulting firms have the intension to participate in redevelopment of the large scale business/commercial and tourist area in the Baseport in 2030.
30 (7) Concrete Schedule for Realizing the Project and Risks Inhibiting
Its Realization
1) Implementation Schedule
The following stages are generally applied for processing PPP scheme projects. The master plan will be implemented in four (4) stages for the Partnership Project, “Planning of Partnership Projects,” “Preparation of Feasibility Study of the Partnership Projects,” “Transaction for Partnership Project” and “Management for Implementation of the Partnership Project.”
Stage1：Planning and Selection of PPP Scheme Project
- CPA will be required to authorize the draft master plan as reviewed and updated by the current Study. - CPA will identify and select the Project components to be implemented by PPP scheme based on the draft master plan. - CPA shall apply for Project resolution by the government and permit the implementation of the proposed Project by PPP Scheme.
Stage 2：Preparation of full scale Feasibility Study of PPP Scheme Project
- CPA shall review the suggestion, recommendation and proposal of the full scale feasibility study. - CPA will check and confirm the full scale feasibility study such as assessment, evaluation, the readiness of the Project implementation, scope and cost of the public and private responsible portions, the financial returns of the Project by CPA and private concessionaire, traffic demands, and implementing schedule of operation. - CPA shall conduct the environmental survey by updating the previous EIA study carried out in 2002 under the JICA study in order to obtain the approval of the EIA from the regional environmental agency.
Step 3： Transaction for Partnership Project (Procurement of private investor, concessionaire)
- CPA shall prepare the documents required for procurements of concessionaire, such as prequalification documents, tender documents, draft partnership agreement documents, PQ and tender evaluation criteria for selection of concessionaire in coordination with DOTC, MOF and Agencies responsible for PPP. - CPA shall prepare the financial arrangement of the Project components responsible by CPA. - CPA may procure a consultant for the engineering study of the Project and a contractor for the construction works of the CPA portion.
31 Stage 4：Management for Implementation of Partnership Project
- CPA will prepare a management plan of partnership contract. - CPA shall report periodically on the results of management activities to the higher authority responsible for the Partnership Project Responsible agency in the Government of the Philippines. - Management unit of CPA manages the fulfillment of preliminary requirements by Business Entity and monitoring in the pre-construction stage as follows:
- Manages the performance of the partnership Project and monitor commercial operation. - Manage various issues stemming from construction works in the construction stage. - Conduct asset appraisal and management in the expiration of partnership agreement stage.
2) Risks to be Encountered for PPP Scheme
The types of risks in PPP projects for infrastructure provision are categorized as “political risk,” “project performance risk” and “demand risk.” The executing agency and its supervisory ministry will be responsible for checking and supervising the following aspects:
- Evaluation of Project feasibility and prioritization with regard to national development priorities are undertaken by DOF and NEDA. DOTC and CPA shall prepare all documents carefully and assist DOF and NEDA to clarify the all issues. - Political Risk: To provide compensation to an asset owner/business enterprise based on a risk-sharing scheme between the Government and Business Enterprise. - Demand Risk: When demand becomes lower revenue than the minimum total revenues guaranteed by the Government on which the agreement was based, extension of contract and/or other financial compensation may be granted. - If there is a delay of land acquisition or increase in land price, CPA will compensate the cost. - If there is a delay in approval of commencement of commercial operation, delay in tariff adjustment and changes, there will be an extension of contract and/or other financial compensation.
32 (8) Project Location Map
Figure 18 Location Map of the Project
Project Location
(Source: Study Team)
33