JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) No. DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH) THE REPUBLIC OF THE PHILIPPINES TheTh Development D lp t of f TheTh Public-private PPublic blblippq private i t Partnership P t hhi TTechniqueechnique h i forfThfThMtMiloeetoaa The Metro Manila il UrbanUbbp Expressway Epy y Network NNt k FINAL REPORT SUMMARY MarchMhac 2003 003 ALMEC Corporation Cp ti NIPPON KOEI CCo.,Ltd.LdLtd SSF JR 03-49 The exchange rate used in the report is J. Yen 119.2 = US$ 1 = Philippine Peso 50.50 J. Yen 1 = Philippine Peso 0.4237 (selling rate of the Philippine Central Bank as of July 2002) JAPAN INTERNATIONAL COOPERATION AGENCY (JICA) DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS (DPWH) THE REPUBLIC OF THE PHILIPPINES The Development of The Public-private Partnership Technique for The Metro Manila Urban Expressway Network FINAL REPORT SUMMARY March 2003 ALMEC Corporation NIPPON KOEI Co.,Ltd. SSF JR 03-49 PREFACE In response to the request from the Government of the Republic of the Philippines, the Government of Japan decided to conduct a masterplan study of the Development of the Public-Private Partnership Technique for the Metro Manila Urban Expressway Network and entrusted the study to the Japan International Cooperation Agency (JICA). JICA selected and dispatched a study team consisting of ALMEC Corporation and NIPPON KOEI headed by Mr. Tetsuo Wakui of ALMEC Corporation to the Philippines from December 2001 to March 2003. In addition, JICA set up an advisory committee headed by Mr. Tadashi Okutani of the Ministry of Land, Infrastructure and Transport between December 2001 and March 2003, which examined the study from specialist and technical points of view. The team made a careful review of past studies and experiences in urban expressway projects, conducted transportation demand forecast and economic/financial analyses; and, through a series of discussions with the officials concerned of the Government of the Philippines, reached the conclusions in this final report. I hope that this report will contribute to the improvement of traffic conditions in the Metropolitan Region through acceleration of urban expressway network development. Finally, I wish to express my sincere appreciation to the officials concerned of the Government of the Philippines for their close cooperation extended to the study team. March 2003 Takao Kawakami President Japan International Cooperation Agency March 2003 Mr. Takao Kawakami President Japan International Cooperation Agency Letter of Transmittal Dear Sir, We are pleased to formally submit herewith the final report of “The Development of the Public-Private Partnership Technique for the Metro Manila Urban Expressway Network”. This report compiles the results of the study which was undertaken both in the Philippines and Japan, jointly by the study team organized by ALMEC Corporation & Nippon Koei and the Philippine Counterpart Team, from December 2001 to March 2003. We owed a lot to many people for the accomplishment of this report. First, we would like to express our sincere appreciation to all those who extended their kind assistance and cooperation to the study team, in particular, the BOT Project Management Office of the Department of Public Works and Highways. We also acknowledge the officials of your agencies, especially the members of the Steering Committee, the JICA Advisory Committee and the Embassy of Japan in the Philippines for their valuable advice and cooperation given to us throughout the course of the study. We wish the report would contribute to development of the Metro Manila urban expressway network to solve traffic problems in the National Capital Region. Very truly yours, Tetsuo Wakui Team Leader, The Study Team for the Development of the Public-Private Partnership Technique for the Metro Manila Urban Expressway Network TABLE OF CONTENTS Page INTRODUCTION ............................................................................................................... 1 1. METRO MANILA URBAN EXPRESSWAY NETOWORK (MMUEN)............ 2 1.1 Existing Expressways in Metro Manila.............................................................. 2 1.2 Future Expressway Network MMUES and MMUTIS ....................................... 2 1.3 Metro Manila Urban Expressway Network........................................................ 2 1.4 Financial Analysis.............................................................................................. 4 1.5 Toll Rate Affordability ....................................................................................... 5 2. PPP TECHNIQUE FOR METRO MANILA EXPRESSWAY DEVELOPMENT ...........................................................................6 2.1 Review and Assessment of PPP Techniques.......................................................6 2.2 Guidelines for PPP Development ......................................................................10 2.3 Proposed Scheme for PPP Project Development ..............................................12 2.4 Guidelines for Network Development through PPP..........................................13 2.5 Action Program for PPP Development..............................................................14 3. OPERATION AND MAINTENANCE GUIDELINE FOR METRO MANILA EXPRESSWAYS .......................................................... 16 3.1 Operation and Maintenance.............................................................................. 16 3.2 Traffic Information System and Electronic Toll Collection System................ 16 3.3 Organization and Cost of Expressway Operation & Maintenance................... 20 4. CASE STUDY OF R10/C3/R9 (+R10/C5 Link) EXPRESSWAY ....................... 22 4.1 Planning Environment ...................................................................................... 22 4.2 Demand/ Revenue Forecast .............................................................................. 22 4.3 Preliminary Engineering Studies...................................................................... 24 4.4 Cost Estimates .................................................................................................. 26 4.5 Environmental Evaluation................................................................................ 27 4.6 Application of the PPP Technique to the Case Study Expressway .................. 28 4.7 Case Study on TIS, ETC and O&M ................................................................. 33 5. PREPARATION OF MODEL BIDDING DOCUMENTS .................................. 35 5.1 Review of Existing Bidding Documents .......................................................... 35 5.2 Preparation of Model Bidding Documents....................................................... 35 5.3 Contract Management and Project Monitoring System ................................... 36 5.4 Points to Keep in Mind at Contract Negociation.............................................. 37 LIST OF FIGURES Study Organization.................................................................................................................1 Figure 1.1 Future Expressway Network for Study.............................................................2 Figure 1.2 Traffic Flow on the MMUEN ...........................................................................3 Figure 2.1 Loan Maturity and Probability of Default.......................................................11 Figure 2.2 Comparative FIRR of Urban Expressways.....................................................13 Figure 2.3 Future Phases in Expressway Development ...................................................14 Figure 3.1 Assumed Development Stages........................................................................19 Figure 3.2 Phased Development Strategy ........................................................................19 Figure 3.3 Assumption of Segmentation..........................................................................20 Figure 4.1 Location of Case Study Expressway...............................................................22 Figure 4.2 Work Flow of Case Study...............................................................................22 Figure 4.3 Demand Forecast for the Case Study Expressway..........................................23 Figure 4.4 Typical Cross-section of Case Study Expressway..........................................24 Figure 4.5 Alignment of Case Study Expressway............................................................25 Figure 4.6 Proposed Link of the Case Study Expressway and MNT C5 Expressway.....25 Figure 4.7 PPP Project Structure for R10/C3/R9 .............................................................30 LIST OF TABLES Table 1.1 Summary of Amended Project Cost................................................................. 3 Table 1.2 Assumed Implementation Schedule for the Metro Manila Rail Network........ 3 Table 1.3 Projects with Strong Mutual Relationships...................................................... 4 Table 1.4 Relationship between Toll Rate and Toll Revenue.......................................... 4 Table 1.5 FIRR of the MMUEN and Its Components ..................................................... 4 Table 1.6 Methodologies in Examining toll Rate Affordability ...................................... 5 Table 1.7 Key Parameters in Defining Reasonable Toll Rate.......................................... 5 Table 1.8 Range of Reasonable Toll Rate and Comparison with Existing Toll Rates..... 5 Table 2.1 DPWH and TRB Views on Contract Issues ......................................................