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EO 30 to speed up implementation of power projects Executive Order (EO) 30 streamlines the regulatory procedures affecting energy projects with the creation of an Energy Investment Coordinating Council (EICC) tasked to harmonize, integrate and speed up requirements especially with priority energy projects.

resident signed EO 30 on June 28, 2017, which seeks to put in place an efficient and Peffective administrative process for energy projects of national significance (EPNS) to avoid unnecessary delays in the implementation of the Philippine Energy Plan (PEP). The EO ensures stable and affordable power supply by reducing red tape and delays in the release of required permits. As Department of Energy (DOE) Secretary Alfonso Cusi puts it, the “the longer the processing of energy projects gets, the more expensive it becomes, which could also impact on the delivery of energy services and their affordability.” EO 30 provides that government agencies concerned with energy projects should act upon applications for permits involving EPNS within a specified timeframe not exceeding 30 days from the submission of complete documentary requirements. If no decision is granted within 30 days, the approving agency hh Complex technical processes and engineering designs; and/or may no longer deny the application and should issue the permit within 5 working days after the lapse of the 30-day period. hh Significant infrastructure requirements. EPNS are major energy projects for power generation, One of the main functions of the EICC under EO 30 is to transmission, and/or ancillary services including those establish a simplified approval process and harmonize relevant required to maintain grid stability and security. Identified rules and regulations of all government agencies involved and endorsed by the DOE as projects of national significance in obtaining permits and regulatory approvals. This aims to or those that possess any of the following attributes: hasten the development and implementation of EPNS and hh Capital investment of at least P3.5 billion; other important energy projects. The council is also tasked to maintain a database of information and a web-based monitoring hh Significant contribution to the country’s economic system to serve as source of information and updates on the development or consequential economic impact; applications of EPNS and other energy projects. The EICC will hh Significant contribution to the country’s balance of payments; prepare rules governing the resolution of inter-agency issues hh Significant impact on the environment; the timely implementation of EPNS and other energy projects.

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EO 30 to speed up the implementation of energy projects of national significance.

Chaired by the DOE, the EICC is composed of the Clark airport dev’t up for bid Department of Environment and Natural Resources (DENR), National Electrification Administration (NEA), National The government has begun to invite bidders for the P12.55- Grid Corporation of the Philippines (NGCP), National Power billion Clark International Airport Terminal, the first project Corporation (NPC), National Transmission Corporation (NTC), under the government’s hybrid public-private partnership Department of Finance (DOF), Department of Justice (DOJ), (PPP) scheme. Target completion is 2019. Department of Transportation (DOTr), Housing and Lawn Use Regulatory Board (HLURB), Palawan Council for Sustainable In cooperation with the Department of Transportation Development, and other agencies whose participation in the (DoTr), the Bases Conversion and Development Authority EICC may be deemed necessary. Some of the arm agencies of (BCDA) has started to invite interested parties to qualify and DENR, DOF, DOTr, and DOJ are also members of the council. bid for the project, which includes the engineering, procurement, and construction contract for the airport facilities, as well as the development of a new passenger terminal. Both local and foreign parties are allowed to bid. The invitation to pre-qualify and bid can be purchased for a non-refundable fee of P1 million. Located in the Clark Freeport and Special Economic Zone, Clark International Airport is around 2-3 hours away from Metro Manila. The new terminal is expected to be completed by 2019, and will consist of an 82,600-square meter terminal building that can accommodate 8 million passengers yearly, twice the present capacity of 4.2 million passengers. Because of its proximity to Metro Manila, the government has long been considering Clark Airport as an alternative gateway to decongest Ninoy Aquino International Airport (NAIA), which accommodated more than 39.5 million passengers in 2016, exceeding its capacity of 30.5 million.

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Clark International Airport Terminal is the first project to be implemented under the hybrid PPP scheme.

The expansion project will be financed through a mix of official development assistance (ODA), state funding, and PPPs. Under this hybrid PPP scheme, the government will be in charge of building the facility, after which it will be turned over to the private sector for maintenance and operation. According to the BCDA, this scheme could lower costs compared to when a private proponent builds and operates the facility. A number of firms submitted unsolicited proposals to develop Clark International Airport even with the government’s announcement that it intends to build the project on its own and then bid out the operation and management (O&M) to private companies. Among the companies that submitted proposals were Metro Pacific Investments Corp. (MPIC); Megawide Construction Corp. with its partner, Bangalore-based airport operator GMR Infrastructure Ltd.; the Gotianun-led Filinvest group; and JG Summit Holdings, Inc. Also, the bidding for O&M will be conducted within the year, where the operator of the project is required to provide input on the design and construction.

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STATUS OF BIG TICKET INFRASTRUCTURE PROJECTS IN THE PIPELINE AS OF AUGUST 2017

IMPLEMENTING FUNDING CIVIL WORKS PROJECT PROJECT TITLE STATUS / ISSUES AGENCY SOURCE TIMEFRAME COST

ROADS AND BRIDGES The DPWH is reviewing the eligibility and Manila-Taguig Expressway Project DPWH PPP TBD TBD completeness of project documents. Bonifacio Global City to Ortigas Road Posting of Invitation to bid and issuance of bid Link Project, Sta. Ana-Lawton Bridge DPWH GAA TBD P4.01 billion documents is already completed. and Viaduct (Phase I & II-A) Metro Manila Bus Rapid Transit – Line The WB announced that it will shoulder $64.6 million DOTr ODA 2018-2021 P4.79 billion 1 (Quezon Avenue BRT) or some P3.16 million of the total project cost. Metro Manila Bus Rapid Transit - Line The ODA partner for this project is still to be DOTr ODA 2018-2021 P37.76 billion 2 (EDSA/Central) determined. The ICC-Cabcom approved a higher project cost for its implementation, from P10.6 billion to P16.3 billion. Cebu Bus Rapid Transit DOTr ODA TBD P10.62 billion The additional cost would cover the right-of-way acquisition. The DPWH has signed a memorandum of agreement with South Korean firms to act as consultants for the project. They are tasked to assist the agency in Panguil Bay Bridge DPWH ODA 2017-2020 P4.9 billion conceptual design, preparation of bidding documents, design review, construction supervision, and post- construction supervision of the project. This project has secured final approval from President Rodrigo Duterte, and is now for roll-out by the DPWH. Arterial Road Bypass Project Phase II DPWH ODA TBD P4.62 billion Its mode of financing was shifted to ODA from PPP.

AIR AND WATER PORTS

New Bohol (Panglao) Airport Operations, Maintenance & DOTr & CAAP GAA TBD P4.57 billion Development Project

Laguindingan Airport Operations, DOTr & CAAP GAA TBD P14.62 billion Maintenance & Development Project

Davao Airport Operations, DOTr & CAAP GAA TBD P40.57 billion The DOTr and CAAP removed the 5 regional airport Maintenance & Development Project projects from the PPP pipeline. DOTr Secretary explained that these projects will now be funded through the GAA because it is cheaper and it Airport Operations, DOTr & CAAP GAA TBD P20.26 billion allows the project completion to be more efficient and Maintenance & Development Project faster.

Iloilo Airport Operations, Maintenance DOTr & CAAP GAA TBD P30.40 billion & Development Project

NAIA PPP Project DOTr & MIAA PPP TBD P74.56 billion The DOTr and MIAA are still reviewing the project.

The BCDA is inviting prospective bidders, both foreign Clark International Airport Expansion and local, for the project. They are also coordinating BCDA GAA TBD P12.55 billion Project with the DOTr for the bidding of the engineering, procurement, and construction contract of the project. The approval of the project has been delegated to the DOTr. Davao Sasa Port Modernization Project DOTr & PPA GAA TBD P4.5 billion Finance Secretary Sonny Dominguez expressed his support to the project because of its potential economic benefits.

RAILWAYS

Construction of the project will begin on 2Q2018. The Mindanao Railway Project Phase 1 House committee on Appropriations has earmarked DOTr GAA TBD P35.26 billion (Tagum-Davao-Digos Segment) an initial amount of P6.58 billion to kick off the construction. This project has secured final approval from President Rodrigo Duterte, and is now for roll-out by the DOTr. LRT 1 North Extension Project – Its operation, maintenance, and development will be Common Station (Unified Grand DOTr GAA TBD P2.8 billion shouldered by Light Rail Manila Corp. and the DOTr. Central Station) Groundbreaking for this project is expected by September, according to DOTr Secretary Arthur Tugade. Operations & Maintenance of LRT DOTr & LRTA PPP TBD No CAPEX Bid submission for the project is delayed. Line-2 LRT Line 6 Project DOTr PPP TBD P65.09 billion The project is still under evaluation.

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This project has secured final approval from President Malolos-Clark Railway (PNR North 2) DOTr ODA TBD P211.43 billion Rodrigo Duterte, and is now for roll-out by the DOTr.

East-West Railway Project PNR PPP TBD TBD The project is still undergoing evaluation by the ICC.

UTILITIES

Batangas-Manila (BatMan) 1 Natural The DOE and PNOC are reviewing the scope and PNOC PPP TBD TBD Gas Pipeline Project structure of the project. OTHER PROJECTS

Manila Bay Integrated Flood Control, The ICC-Technical Working Group and Sub-committee Coastal Defense and Expressway DPWH PPP TBD TBD members are awaiting the response of DPWH on the Project issues and concerns that they raised about the project.

Regional Prison Facilities through PPP DOJ & BuCor PPP TBD P50.20 billion Bid proposal submission for the project is suspended. This project has secured final approval from President Rodrigo Duterte, and is now for roll-out by the MWSS. New Centennial Water Source Project MWSS ODA TBD P10.86 billion – Kaliwa Dam Its mode of financing is changed to ODA from PPP, lowering the total project cost to P10.86 billion from P18.72 billion. Cavite Industrial Area Flood Risk This project has secured final approval from President DPWH ODA TBD P9.89 billion Management Project Rodrigo Duterte, and is now for roll-out by the DPWH. This project has secured final approval from President Rodrigo Duterte, and is now for roll-out by the NIA. Chico River Pump Irrigation Project NIA ODA TBD P2.7 billion The NEDA Board has changed its mode of financing to ODA from GAA.

ACRONYMS BuCor Bureau of Corrections CAAP Civil Aviation Authority of the Philippines CIAC Clark International Airport Corporation DOJ Department of Justice DOTr Department of Transportation DPWH Department of Public Works and Highways ICC Investment Coordination Committee LRTA Light Rail Transit Authority MIAA Manila International Airport Authority MPIC Metro Pacific Investments Corporation MWSS Metropolitan Waterworks and Sewerage System NEDA National Economic Development Authority NIA National Irrigation Administration ODA Official Development Assistance PNOC Philippine National Oil Company PNR Philippine National Railways PPA Philippine Ports Authority PPP Public-Private Partnership TBD To be determined WB World Bank

Philippine ANALYST INFRASTRUCTURE July-August 2017