Philippines to award 15 PPP infrastructure projects by 2016

By Erik dela Cruz, Reuters

Posted at Dec 19 2013 05:39 PM | Updated as of Dec 20 2013 01:39 AM

MANILA - The Philippines will put two infrastructure projects worth P100.3 billion ($2.3 billion) up for tender in April and will push through about a dozen other projects before President Benigno Aquino steps down in three years' time, a government official said.

The Cavite-Laguna Expressway project worth P35.4 billion and the LRT Line 1 Cavite Extension railway project worth P64.9 billion are among 15 infrastructure deals the government aims to award to the private sector under a public-private partnership (PPP) scheme by 2016.

Manila is offering a series of PPP projects to investors to further boost growth in one of Asia's fastest-growing economies.

The government has said it needs to raise infrastructure spending from around 3 percent of GDP now to 5-7 pct of GDP, or by about P300 billion to P500 billion ($6.95 billion to $11.59 billion) annually, to keep pace with its regional neighbours and sustain its growth momentum.

"We're working on having at least 15 PPP contracts signed and seven projects completed and at least 10 infrastructure facilities turned over to the private sector," Cosette Canilao, executive director of Manila's PPP Center, told reporters on Thursday.

"These are our working targets by end of 2016, which we think are achievable."

Underinvestment, including in infrastructure, along with the government's failure to transform protectionist policies and liberalise more sectors, have contributed to the country's high unemployment and underemployment rate, the World Bank said in a report on jobs in the Philippines earlier this year.

But there have been delays in a number of high-profile tenders, including that for the LRT Line 1 extension, raising doubts about the government's goal to boost infrastructure investment.

The government has so far awarded five PPP deals three years after launching its programme to improve infrastructure, including the $380 million Manila airport expressway project won by San Miguel Corp. in April.

Last week India's GMR Infrastructure Ltd. and Philippine contractor Megawide Construction Corp. emerged the likely winners of a $400 million airport terminal tender.

Three more projects may be awarded in the next few weeks.

Prequalified bidders for the Cavite-Laguna expressway project - groups led by Philippine conglomerates San Miguel, Ayala Corp., Metro Pacific Investments Corp., and Malaysian firm Alloy MTD - have until April 21 to submit bids.

San Miguel and Metro Pacific are also among several groups interested in the LRT Line 1 extension project.