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INFRASTRUCTURE

Metro Manila flood control master plan gets fundingThe newly-crafted flood control master plan for Metro Manila gets traction after receiving P5 billion from the national budget. This is the initial funding for the 2-decade master plan that aims to permanently address the problem of flooding in the metropolis. The amount will finance structural flood mitigation measures in Metro Manila and nearby provinces.

for low-lying areas. These projects add up to an estimated cost of P352 billion. Funding sources being eyed for the FMMP include government financing and foreign assistance.

The amount of P5 billion that the government has so far allotted for the FMMP will fund 15 projects, including the construction and rehabilitation of flood control structures, and river improvement and dredging in NCR, Central Luzon, and CALABARZON (see table). These measures support the 11 major FMMP projects, and were prioritized based on degree of flood risk in the concerned

The master plan takes the river basin approach to flood management that targets the causes of flooding, instead of resolving pocket problems individually.

On September 18, the Department of Budget and Management (DBM) announced that the Aquino administration had set aside P5 billion for the immediate

implementation of flood control interventions in Metro Manila and nearby provinces. This amount represents the initial funding allocation for the Flood Management Master Plan (FMMP) for Metro Manila and surrounding areas.

The FMMP is a long-term, comprehensive program offered by the Aquino administration to solve the problem of flooding in the National Capital Region (NCR), Central Luzon (Region III), and CALABARZON (Region IV-A), which are considered high-risk areas. The master plan takes the river basin approach to flood management that targets the causes of flooding, instead of resolving pocket problems individually. The Metro Manila FMMP identifies 3 main causes of flooding in the covered areas:

1) Excessive spillover from the Marikina Watershed; 2) Overflowing of riverbanks due to intense rainfall; and 3) Abundance of low-lying areas. The FMMP seeks to address these sources of flooding by

offering structural measures. At present, there are 11 major projects included in the FMMP (see table). These include river and drainage improvements, as well as “land-raising” projects

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areas and the viability of implementing the projects’ technical, social, and environmental aspects. The projects are expected to be completed between 2012 and 2013. The Department of Public Works and Highways (DPWH) will lead the implementation, with support from the Metro Manila Development Authority and concerned local governments, and in close coordination with the National Disaster Risk Reduction and Management Council.

Meanwhile, the implementation of the full Metro Manila FMMP will span 23 years, from 2012 until 2035. The 11 major projects in the master plan are expected to benefit some 4.6 million people, and to result in the displacement of about 930,000. The Public Works department has given an assurance, however, that the affected population would also receive priority consideration, with resettlement strategies incorporated in project development.

According to the Public Works and the Budget departments,

This map provides a partial illustration of the Flood Management Master Plan (FMMP) for Metro Manila and surrounding areas. The FMMP calls for the construction of a large flood control dam located at the Upper Marikina River. This will be complemented by retarding basins for water spillover along the path of the Marikina River leading into the Pasig River. Other flood control structures will also be strengthened and constructed along the way. (Source: Official Gazette)

the administration’s flood management initiatives are aimed towards developing a society that is resilient to floods, and ensuring that the country is able to sustain economic growth even in the midst of natural disasters. The Metro Manila flood control master plan forms just one “aspect” of the country’s overall FMMP, which has yet to be unveiled.

The Metro Manila FMMP is based on a flood risk assessment study conducted by the DPWH from February 2011 to February 2012. The study was funded through a $1.5-million technical grant from the World Bank and the Australian Aid for International Development.

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Flood ManageMent Master Plan (FMMP) For Metro Manila and surrounding areas

Implementing Agency: Department of Public Works and Highways

Coverage: National Capital Region (NCR); Central Luzon (Region III); and CALABARZON (Cavite-Laguna-Batangas-Rizal-Quezon or Region IV-A)

11 Major Projects(implementation: 2012-2035)

15 Projects-items under the P5-Bn allocation-

(implementation 2012-2013)Project naMe cost Project naMe allocation

VERY HIGH PRIORITY

1. Marikina large dam and Pasig-Marikina River Improvement

P198.43 billion

1. Valenzuela-Obando-Meycauayan flood management and drainage system projects

P830 million

2. West Laguna Lakeshore Land Raising P25.2 billion

2. Caloocan-Malabon-Navotas-Valenzuela flood control and drainage system projects

P800 million

HIGH PRIORITY

3. Malabon-Tullahan River Improvement P21.6 billion3. Manila Bay seawall

strengthening and floodgates construction

P765 million

4. Meycauayan River Improvement P14.04 billion 4. Improvement of inflow rivers to Laguna de Bay P750 million

5. East Manggahan Floodway and Cainta-Taytay River Improvement P26 billion 5. Upper Marikina River

Improvement Project P370 million

6. Land raising for small town around Laguna de Bay P7.15 billion 6. Central Luzon flood

control projects P272.19 million

7. Improvement of inflow rivers to Laguna Lake P637 million 7. Western Manggahan Floodway Project P262.40 million

8. Manila Core Drainage Improvement P27.2 billion 8. CALABARZON flood control projects P205 million

9. Valenzuela-Obando-Meycauayan River Improvement P8.63 billion

9. Mandaluyong and San Juan River Improvement Project

P62.50 million

MARGINAL PRIORITY10. West Manggahan Area Drainage Improvement P5.52 billion 10. Pampanga flood control

projects P64 million

11. South Paranaque-Las Pinas River Improvement P17.3 billion 11. Tarlac flood control

projects P71 million

total P351.7 billion

12. Drainage cleaning and de-clogging P43.33 million

13. Zambales flood control projects P36 million

14. Dredging equipment P274.61 million

15. Undisclosed --

total P4.81 billion

Sources: DPWH, NEDA, DBM, gov.ph, press statements

NEDA approves LRT-2 East Extension

The NEDA (National Economic and Development Author-ity) Board recently approved the Light Rail Transit Line 2 (LRT-2) East Extension Project. This is a P9.8-billion project that would extend the LRT-2 from its existing terminus at Santolan, Pasig City to Masinag Junction in Antipolo. The NEDA Board approval was earlier deferred to make way for a population study to determine the project’s viability. The project financing has yet to be finalized, but railway completion is eyed by 2016.

In its 7th meeting for the year held on September 4, the NEDA Board approved the LRT-2 East Extension project. This project would extend the existing LRT-2 eastward by 4.19 kilometers (km), from the Santolan station in Pasig City to Masinag Junction in Antipolo City, Rizal (please see box). It

will entail the construction of 2 additional stations in Cainta and Antipolo City, both in Rizal. The existing LRT-2 is a 13.8-km, 11-station railway stretching from Recto in Sta. Cruz, Manila to Santolan. The Department of Transportation and Communications (DOTC) is the implementing agency for the project.

The East extension project has a cost of P9.76 billion, and does not require any right-of-way acquisitions. DOTC Assistant Secretary for Planning Atty. Jaime Raphael Feliciano revealed that the financing for the project has yet to be finalized. He said, however, that the PPP (public-private partnership) scheme had already been ruled out, despite the project being previously included in the PPP pipeline. Among the financing options presently being considered are government appropriations or loans.

Prior to securing the NEDA Board’s approval, the LRT-2 East Extension project was subjected to a population study to determine its viability, upon the order of President Aquino who serves as chairperson of the Board. In June 2012, reports surfaced that the

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The LRT-2 East Extension will primarily benefit residents in the east of Metro Manila, particularly in Marikina, Cainta, and Antipolo.

lrt-2 east extension Project sequence oF eventsYear event2002 NEDA Technical Board gives its initial approval to the LRT-2 East Extension project, initial feasibility study (FS) is prepared

2006 Existing FS is updated by the Light Rail Transit Authority (LRTA)

2009 Existing FS is further updated

2nd quarter of 2009- 2010

Through a grant from the Ministry of Economy Trade and Industry of Japan, the Marubeni Corporation, together with Katahira and Engineers International, Tonichi Engineering Consultants, Inc. and Oriental Consultants Co., Ltd. prepare a new feasibility study

2011 Japanese International Cooperation Agency conducts a new feasibility study on a grant basis

May 2012 NEDA-Investment Coordinating Committee (NEDA-ICC) approves LRT-2 East Extension project

Sept. 4, 2012 NEDA Board approves the project

LIGHT RAIL TRANSIT LINE 2 (LRT-2) EAST ExTENSION PROJECT

implementing agency: Department of Transportation and Communications (DOTC) - Light Rail Transit Authority (LRTA)

Project details: The project involves the design and construction of a 4.19-kilometer (km) extension to LRT-2, from the railway’s existing terminus at Santolan station to Masinag Junction at the intersection of the Marcos and Sumulong Highways in Antipolo City, Rizal. There will be 2 stations for the East extension, to be located at:

1. Emerald Drive, Cainta, Rizal

2. Masinag Junction, Antipolo City, Rizal

Project cost: P9.76 billion Project Financing: To be determined

Project implementation: 2012-2016

status: Approved by the NEDA Board on September 4, 2012

Sources: Department of Transportation and Communications-Light Rail Transit Authority, NEDA, and press statements

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Board deferred its approval of the project pending the results of the study. DOTC Secretary Mar Roxas explained that the study only sought to determine if the extension to Masinag Junction is necessary, particularly if the Antipolo station would serve a “sufficient population base,” and that plans for the extension to Cainta were already definite. Industry observers, however, questioned the need for a new population study. They pointed out that previous feasibility studies on the project, conducted between 2002 and 2011, already included thorough ridership studies (please see sequence of events). All reportedly found the extension to Masinag Junction viable. Despite this, the DOTC still undertook the population study commissioned by Pres. Aquino. As expected, the study again proved the necessity of the extension to Masinag Junction in Antipolo City, thus leading to the NEDA Board approval of the project.

The LRT-2 East Extension project is expected to commence construction later this year, and to be completed in 2016. It is expected to provide a rapid and reliable mode of transit to and from the east of Metro Manila, primarily benefitting residents of Marikina, Cainta, and Antipolo. The extension is projected to transport an additional 120,000 passengers per day, increasing LRT-2’s current daily ridership estimated at 177,000. Of the projected additional ridership, 40% will come from the Masinag station and 60% from the Cainta station.

Meanwhile, there are 2 other plans in the pipeline that involve the LRT-2. First is the LRT-2 Operations and Maintenance contract that covers the existing LRT-2 and the East extension. The project cost is yet to be determined. It is being considered for PPP financing, and is presently undergoing a feasibility study. The other project is the LRT-2 West Extension, which involves the extension of the LRT-2 by 1.62-km from the Recto station to the market district of Divisoria in Manila. There have been no updates on this project recently.

…and 2 big ticket airport projects in key tourist destinations

The NEDA Board also gave its approval to 2 big ticket airport projects in key tourist destinations in the Luzon and Visayas regions. These are: the Bicol Airport Project and the New Bohol Airport Project. Both these projects involve the development of new domestic airports to replace the existing airports in their respective provinces that are hounded by issues of limited capacity for expansion and operational safety concerns.

On September 4, the NEDA Board gave a green light to the Bicol Airport Project and the New Bohol Airport Project, both of which involve the construction of new domestic airports in the provinces of Albay, Bicol and Bohol (see table). On one hand, the Bicol Airport Project involves the completion of a new airport that is currently under construction in Daraga, Albay in Bicol. Pre-construction activities for the Daraga airport began in 2007, and by early 2012, the runway component had already been completed. The New Bohol Airport Project,

on the other hand, broke ground in 2008, but has yet to start civil works. Construction of the new Bohol airport is expected to commence following the recent NEDA Board approval.

The Bicol Airport Project will replace the existing Legazpi Airport. Airport modernization was deemed necessary in light of the continued rise in passenger traffic at the airport. Passenger arrivals at the Legazpi Airport have been increasing at an annual average growth rate of 22.3%. The initial plan was to expand the Legazpi Airport, but this was abandoned due to the physical constraints posed by the area’s terrain. The Legazpi Airport is flanked by hills at one end and a mountain range at the other. Because the leveling of the terrain turned out to be too costly at a price of P3 billion, excluding other upgrade expenses, the government opted to develop a new airport in Daraga, Albay instead.

This is also the case for the Bohol airport. The New Bohol Airport Project will be constructed on Panglao Island in the southwest of Bohol province. It will replace the existing Tagbilaran Airport that is considered physically inadequate for the much-needed airport expansion. The Tagbilaran Airport has benefitted from a continued increase in passenger traffic at an annual average growth rate of 30.3%. Despite this, the airport continues to suffer from physical limitations that make it difficult for large aircraft to maneuver and inadequate facilities that contribute to airport congestion and passenger discomfort. As with the Legazpi Airport, further expansion of the Tagbilaran Airport is constrained by the area’s terrain that also features hills and mountain ranges. This prompted the transfer of the airport operations to Panglao Island, which has a “relatively flat” topography with expanses of undeveloped land suitable for airport development.

While the details of the 2 projects are not readily available, it was disclosed that the planned airports are designed to meet international standards in order to improve safety and efficiency of aircraft operations. The Bicol Airport Project has a cost of P4.79 billion, while the New Bohol Airport Project is estimated to cost P7.44 billion. These 2 projects had earlier been considered for PPP (public-private partnership) financing. In fact, both were included in the priority list of 10 PPP projects that was unveiled in November 2010. In mid-2012, though, it was reported that the projects were no longer in the PPP pipeline. Eventually, the NEDA Board approved government funding for the Bicol Airport Project, and official development assistance to partly finance the New Bohol Airport Project (the other funding source was not disclosed).

The Bicol and Bohol airport projects are in line with the Aquino administration’s goal of attracting 10 million tourists to the Philippines by 2016. As Tourism Undersecretary Daniel Corpuz said, “connectivity to key tourist destinations is critical” to meeting this target. The provinces of Albay, Bicol and Bohol offer a variety of tourist attractions, from beaches, cultural heritage sites, natural scenery, etc. By 2020, passenger volume at the New Bicol Airport is projected to reach about 540,000 arrivals per year, while passenger traffic in the New Bohol Airport is expected to surge to over 1 million arrivals (see table).

The civil works for both airports are scheduled to take place in 2013. The New Bicol Airport is expected to be completed first, in 2015; while the New Bohol Airport is eyed for completion by 2017.

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Bicol airPort Project new Bohol airPort Project

iMPleMenting agency dePartMent oF transPortation and coMMunications (dotc)Project location daraga, alBay Panglao island, Bohol

Project Description

This project involves the development of a new domestic (Principal Class 1) airport of international standards in Daraga, Albay to replace the existing Legazpi Airport that has a limited capacity for expansion and is hounded by operational safety concerns.

This project involves the development of a new domestic airport of international standards in Panglao Island in Bohol, to replace the existing Tagbilaran Airport that has a limited capacity for expansion and is hounded by operational safety concerns.

Project Cost P4.79 billion P7.44 billion

FinancingGovernment appropriation (DOTC budget)

Partly through ODA c/o Japan International Cooperation Agency (JICA)

Implementation Timeframe 2013-2015

2012-2017

(Civil works to start in 2013)

Airport passenger trafficCurrent (2010): 435,151

Projected (2020): 537,820

Current (2010): 573,299

Projected (2020): 1,141,332

Significant Events

2007- DOTC releases initial allocations for the pre-construction activities (feasibility study, site development plan, right-of-way acquisition) for the new Bicol airport

End-2012- 2-kilometer runway completed

2008- Groundbreaking in Panglao Island for the New Bohol Airport

Status

• Approved by NEDA Board on September 4

• The invitation to bid for the airside development component of the new Bicol Airport was published on Sept. 21. Other components will be bid out separately.

• Approved by NEDA Board on September 4

• Transportation Sec. Roxas has reportedly signed a Department order for the creation of project implementation committees and a project management office for the New Bohol Airport Project.

Sources: DOTC, NEDA, SONA 2012 Technical Report, PPP Center, Press statements

The Bicol and Bohol airport projects are in line with the goal of attracting 10 million tourists to the Philippines by 2016.

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status oF Big ticket inFrastructure Projects as oF sePteMBer2012

PROJECT TITLE IMPLEMENTING AGENCY

FUNDING SOURCE

CIVIL WORKS TIMEFRAME PROJECT COST STATUS / ISSUES

NAIA-1 Rehabilitation DOTC NG -- P1.64 billion On Sept. 13, the Budget department announced that the administration has earmarked P1.64 billion for the rehabilitation.

Bicol (Daraga) Airport Development DOTC NG 2013-2015 P4.79 billion

Approved by NEDA Board on Sept. 4. Invitation to bid for the airside development published on Sept. 21. Other components to be auctioned separately.

New Bohol (Panglao) Airport Project DOTC ODA/PPP 2013-2017 P7.44 billion

Approved by NEDA Board on Sept. 4. DOTC Sec. Roxas has issued a department order creating project implementation committees for this.

Puerto Princesa Airport Development DOTC ODA/PPP 2013-2015 P4.5 billion (const.)

Feasibility study for the O&M contract is ongoing. Dept. of Finance recently signed an agreement with the Export-Import Bank of Korea for a $71.6-million loan to fund the airport construction. Civil works expected to start in 2013.

Mactan International Airport Development (Passenger Terminal)

DOTC-MCIAA PPP 2013-2015 P10.28 billionNEDA deliberation on the project is eyed by October. Project rollout expected within the year, as awarding is seen by 3Q/4Q 2013.

Clark Airport (Budget Terminal) DOTC-CIAC -- 2013-2016 P12 billion

Target completion for the pre-feasibility study is in mid-October, with the full-blown feasibility study expected to begin 6 months after.

Daang Hari-SLEx Link Road Project DPWH PPP 2014-2015 P1.96 billion

Currently conducting the right-of-way survey for the implementation of the project. Pre-construction activities are expected to finish by 4Q2013.

NAIA Expressway Phase II DPWH PPP 2013-2015 P15.9 billion

Pre-qualification bids were submitted on Oct. 1 instead of Sept. 25. Schedule for the submission of bids will remain in January 2013 despite the delay. Full operation of the project is expected in 2016.

CALA Expressway DPWH PPP/ODA 2014-2017 P43.3 billion

In the process of securing NEDA Board approval. It was considered by the NEDA Board on Sept. 4, but approval was deferred because the Board still needed to clarify how the project would fit in with the national road integration program.

NLEx-SLEx Connector Road Project DPWH PPP 2013-2015 P23.6 billion

Awaiting NEDA approval. Project recently gained “no objection” notice from DOTC and the Toll Regulatory Board for use of PNR alignment. Once approved by NEDA, a Swiss challenge will take place in October.

LRT-1 South Extension DOTC-LRTA PPP/ODA 2013-2015 P59.2 billion

Deadline for submission of prequalification documents was moved from Sept. 28 to Oct. 22. Bidding for the extension project to Bacoor, Cavite is expected to finish by April 2013. The new segment from Bacoor to Dasmariñas is still under study and is eyed for bidding in 3Q2013.

LRT-2 East Extension DOTC/LRTA To be determined 2012-2016 P9.76 billion Market study commissioned by Pres. Aquino concluded, and the

project was subsequently approved by the NEDA Board on Sept. 4.

MRT-3 Privatization DOTC-LRTA PPP -- P6.3 billion

Metro Pacific submitted to the DOTC a revised proposal to operate and expand MRT-3. The revised proposal calls for the granting of a new concession, instead of assuming the existing concession. The proposal is being reviewed by the DOTC.

MRT-7 DOTC PPP 2013-2016 $3.4 billion

The contract stipulates that the project be re-submitted to NEDA-ICC for approval if financial closure is not secured by the given deadline. The deadline was not met, thus the contract was re-submitted to the NEDA-ICC.

Strengthening of Angat Dam and Dike Project (Angat Dam Rehabilitation)

MWSS NG 2013-2016 P5.72 billion Approved by NEDA Board on Sept. 4. The Budget department had earlier earmarked P5.7 billion for the project.

Angat Water Transmission Improvement Project MWSS -- -- -- ADB recently approved the offer of a technical assistance worth

$800,000 for the project.

Balara Water Hub MWSS PPP -- P20 billion Project development ongoing. Expected to be rolled out this year.

Marikina Dam DPWH/DENR -- -- P198.43 billion

This is a “very high priority” component of the Metro Manila flood control master plan. Though the master plan will soon commence implementation, details of the dam project have yet to be disclosed.

Agus VI Hydroelectric Power Plant (Units 1 & 2) Uprating

DOE-NAPOCOR NG 2012-2014 P2.6 billionThe NEDA Board has recently approved the change of financing scheme “of internally-generated funds of PSALM and on-lending by the national government.’

South Harbor Expanded Port Zone PPA PPP -- -- For procurement of a consultant to conduct a study on the

development of the project.