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CDIA in the Philippines: Back to Where We Started

December 10, 2018
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The Philippines is a country of many beginnings for CDIA. For one, it is the venue of the international conference, “Investing in Asia’s Urban Future,” which paved the way for the establishment of CDIA as an approach to address gaps in infrastructure project development and financing in Asia and the Pacific.

Secondly, it is where CDIA had its first project preparation study (PPS) – in partnership with the Metro Iloilo – Guimaras Economic Development Council (MIGEDC), led by the local government of Iloilo City. In particular, CDIA provided assistance in preparing PPS to modernize the Guimaras Iloilo Ferry Terminal System, and revitalize the Iloilo Downtown Central Business District. Both projects were pursued under public-private partnership (PPP).

11 years since then, CDIA’s portfolio has expanded to 95 commissioned PPS in 95 cities across Asia and the Pacific. Out of which, 80 PPS have been completed, with an estimated expected investment value of USD 9.5 billion.

In the Philippines alone, CDIA had the opportunity to work with 9 cities in preparing PPS to create better integrated, inclusive and sustainable infrastructure projects. Out of the 9 PPS, 6 have been linked to downstream financing amounting to USD 164 million.

By infrastructure sector, drainage and wastewater management account for almost half of the projects while urban transport comprises one-third of the projects in the country.

Some of these projects include the development of framework for infrastructure provision in the City of Cebu, particularly for the South Road Properties Development (SRP). Likewise, CDIA supported the Integrated Naga River Revitalization Project in response to the worsening flood and pollution in the river. A monitoring report in 2015 found out that about 20,000 households – 40% of which are poor – are now benefiting from the flood protection and mitigation project. These benefits have been captured in this short video.

In 2013, CDIA partnered with Cagayan de Oro on wastewater, watershed and solid waste management projects. Early this year, CDIA went back to see the status of project implementation and found out that the city is gradually putting investments to reduce the adverse effects of waste. Moreover in 2013, CDIA worked with General Santos City to prepare a PFS to develop a regional food terminal and rehabilitate its central public market.

In 2014, CDIA supported the City of Valenzuela towards an integrated flood risk management. Valenzuela is now one of the 11 cities in the National Capital Region included in the USD 207.6 million World Bank loan, allowing for the construction and modernization of five pumping stations within the city. The Philippine National Government has likewise allocated USD 19.2 M for the modernization of the Wawang Pulo Pumping Station, expected to be operational by end of 2018. In May of this year, key government officials from Germany and Austria visited Valenzuela and saw first-hand the status of the CDIA projects and their benefits to the city.

In 2015, CDIA worked with Davao City to prepare a PFS on urban transport; while in 2016, CDIA completed its PFS in the cities of Baguio and San Fernando to identify measures for reducing wastewater pollution and flooding, and ensuring a cleaner and safer environment in the two cities.

Significant lessons have been drawn from 11 years of working with Philippine cities. Going back to where it all started, our Iloilo projects provide some insights as to how other cities in the Philippines could develop their infrastructure investments and improve their capacities in project implementation. Together, let’s take a closer look at to the Guimara-Iloilo Ferry Terminal System Project.

Parola Ferry Terminal Complex

Ferry passengers between Iloilo City and the Island Province of Guimaras in the Philippines are now enjoying a better way to travel with the opening of the new Parola Terminal Complex that CDIA helped to plan and implement via a PPP mechanism.

Previously a small dock for loading and unloading passengers has been transformed into a modern terminal complex with air-conditioned lobby, clean public toilets and designated parking areas and drop-off points. Next to the terminal is a community mall with a pharmacy, a number of restaurants, a supermarket and other stores selling daily consumer goods.

Previously in a bad shape, the Iloilo City government handed in an application to CDIA in 2008. The intent was to develop a PFS towards a three-port system servicing the City and the towns of Buenavista and Jordan in the Guimaras Province. CDIA’s technical assistance further included, among others, capacity building on infrastructure development, and financing via PPP.

The integrated ferry terminals did not push through as planned, owing to several reasons, including a change in local administration. However, the Iloilo City Government received an unsolicited proposal from Double Dragon Properties Corporation for a mixed-use development project that included the construction of a community mall and redevelopment of the Parola ferry terminal.

The Joint Venture Agreement was signed in 2012 with effectivity of 25 years, renewable for another 25 years depending on the agreement of both parties. In 2017, the Parola Ferry Terminal finally opened to the public. It now caters to at least 3,500 daily commuters between Iloilo City and the towns of Buenavista and Jordan (Guimaras).

Key Takeaways from the Iloilo Ferry Terminal Project, the First PPP Project of the City

  • Implementing PPP at the local level takes time and does not happen overnight. When the City embarked on their first PPP project, there was still no clear roadmap on PPP at the local level. This prompted the city government with support from CDIA to study the legal implications of various PPP options and seek opinions from various stakeholders.
  • Political will of the city mayor and the city council helped speed up project implementation after attempts were made to derail the project by some sectors with vested interest. Having a PPP champion at the local level, in this case, the City Mayor was a key facilitating factor, as he was very involved with the project.
  • A wider and more inclusive approach to stakeholder consultations could have avoided some of the negative perceptions on the planned infrastructure project from some sectors who were apparently left out in the consultation process.
  • The city government has capitalized effectively on the opportunity to avail of technical assistance provided by CDIA on infrastructure development and financing. Even if the three-port system through a joint venture corporation did not materialize, some activities recommended by the pre-feasibility study were carried out which resulted in the redevelopment of the Parola complex.
  • Investor familiarity with local conditions has been reflected in the final design of the project. For instance, Double Dragon has proposed the community mall within the complex as they are aware that passengers from Guimaras can save time and money by shopping immediately on-site, rather than go to other malls in the city, which would require them at least 6 kilometers of travel. Furthermore, meeting the needs of the passengers has greatly influenced the design of the complex, which keeps the terminal complex attractive.
  • Building the local capacity on various PPP processes has paved the way not only for the financial closure of the Parola Ferry Terminal Complex, but also for succeeding local PPP projects.
  • Benchmarking with other cities and local government units that have successfully implemented PPP projects was instrumental, as they have challenges and lessons worth considering.

 

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