Wanted 34 Billion Pesos in PPP investments required

With the pending PPP project expected to be rolled out this year, the Philippines will need investors to bankroll over 34 Billion pesos (around than AUD$ 750 Million @$45:PHP1). I hope some of that will come from Australia.

From BusinessWorld Philippines

February 02, 2012

Economic boost from PPP deals to be felt in 2013

THE ECONOMIC IMPACT of the public-private partnership (PPP) program will not be felt until next year, a Finance official said, despite government hopes that 2012 growth could be driven by the big-ticket infrastructure projects.

“Assuming we bid out the 16 projects this year, the funding requirements will not come until three, four, five, six months after those bids,” Finance Undersecretary John Phillip P. Sevilla said in an chance interview.

Moreover, construction will likely begin only in the summer of next year to take advantage of good weather, he explained, adding that this includes a schoolbuilding project recently opened to bidders.

“The commitment is to begin the bidding process. But in terms of actually breaking ground, it depends on when the bids are finished, but the bidder will prefer to hold the construction during summer,” Mr. Sevilla said.

The Education department announced its PPP project — involving the design, financing, construction and maintenance of 9,332 classrooms — last month.

Only the P1.96-billion Daang Hari-South Luzon Expressway Link project bagged by Ayala Corp. in December could have an economic impact this year, Mr. Sevilla said.

“The bulk of spending, the economic growth, the multiplier effect will start next year,” he added.

Mr. Sevilla, however, claimed the PPP program could still stimulate the country’s economy to some extent.

“When the government announces it is planning to fix a certain airport, businesses flock to that area and create economic activity,” he explained.

The downside, though, is that it pushes up property values in the area, making it more costly for the government to acquire the right of way.

After the schoolbuilding project, the government plans to offer the Health department’s P900-million Vaccine Self-Sufficiency Program next. It is tentatively scheduled for a first quarter rollout.

Lined up for the second semester are the modernization of the Philippine Orthopedic Center (P5 billion); the Common Fare Collection System (P1.8 billion); the Laguindingan Airport Operations and Maintenance contract (P7.8 billion); the New Bohol Airport project (P8 billion); and the Mactan Terminal 2 Airport Development project (P10.15 billion).

“If we get the projects done, the financing requirements will come next year. The inflow of investments to infrastructure this year, it’s not going to be massive,” Mr. Sevilla said. —Diane Claire J. Jiao

Article location : http://www.bworldonline.com/content.php?Section=TopStory&title=Economic boost from PPP deals to be felt in 2013&id=46154

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