Govt eyes P400B in funding for PPP projects

government expects to clinch some P400.98 billion worth of private sector funding for its Public-Private Partnerships (PPPs) program in the next three years or up to 2013, according to the National Economic Development Authority (NEDA).

Socioeconomic Planning Secretary Cayetano Paderanga Jr. yesterday reported to members of the lower house that PPP projects would be a major growth driver as construction assumes an agressive role as among those sectors expected to spur wider economic expansion starting next year.

Paderanga, in a power-point presentation before the House appropriations committee, said the P400.98 billion of private sector- funded PPP projects will come from transportation, water, communications and social infrastructures.

He said these investments should be worth P214.389 billion for transportation sector; P112.285 billion for the water sector; P3.5 billion, communications; and, P70.721 billion for social infrastructures projects.

NEDA data showed the total PPP-private sector funding is also part of the comprehensive and integrated infrastructure program worth P3.126 trillion which were drew up way back in 2009.

Paderanga earlier said bidding for the PPP projects will likely start early next year.

“We have 70 [projects] right now, but we are trimming them down to at least 50. Hopefully, by the end of the year, we will be able to come up with 10 and trim it further by early next year”, Paderanga said.

Budget Secretary Florencio Abad said about P200 billion of funding for PPP projects could be generated in the “near term.”

He said the P200-billion PPP undertakings may likely happen in 2011.

This was slightly higher by P20 billion from the P180 billion target originally quoted by President Benigno Aquino III in his budget message to Congress.

“We are targeting some P180 billion worth of PPP undertakings in 2011 to bridge the gap between the 5 percent historical GDP growth rate and the envisioned 7-8 percent growth target,” the president said.

Aquino said the NEDA would be given an additional P50 million for value engineering studies to ensure that projects developed are at the least cost and at the most efficient option.

Aside from this, another P15.6 billion in ‘seed money’ is being earmarked for government agencies that would play a key role in the implementation the PPP program.

Abad said the spending allocation would be used as counterpart funds of the Aquino government in PPP projects that it would solicit from the private sector starting in the last quarter.

Of the total amount, P15 billion will be shared by the Department of Public Works and Highways (DPWH), Department of Transportation and Communications (DOTC) and Department of Agriculture (DA) and would be spent for “counterpart requirements” such as paying for road right of ways (RROWs).

Abad said another P500 million is being earmarked for use by the DPWH and P100 million for DOTC to undertake separate feasibility studies on the PPP program.

Finance Secretary Cesar Purisima earlier said the government will have to shell out its own funds to kick start the PPP program.

“Obviously, we need some amount to jumpstart the PPP program,” Purisima said.

He also said government guarantees might also be needed to cover the loans that would be obtained by PPP proponents from the planned pool of infrastructure funds.

Purisima said the government is currently holding discussions with multilateral lending agencies and even state pension funds in setting up the pool of funds to finance PPP projects.

He said these institutions could provide the government loans the private sector can tap for the PPP projects.

An estimated $10 billion is said to be needed to power up the PPP program but this has been officially denied by the finance department.

The government will use the PPP program to implement key infrastructure projects with the help of the private sector that could cover tourism, food supply chain and general infrastructure projects.

The Aquino government has formally submitted to Congress this week its spending plan for 2011, worth P1.645 trillion, which represents a 6.8 percent increase from the current national outlay of P1.541 trillion. Dino Ng


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