I.

Introduction

Public-private partnerships are collaborations between a government organization and a

business from the private sector that can be used to fund, construct, and run projects like parks,

convention centers, and public transit systems. A project's funding through a public-private

partnership may enable an earlier completion or even the project's potential. Public-private

partnerships may include giving up tax or other operating money, liability protection, or a portion

of ownership rights over things that are ostensibly public. The Public-Private Partnership (PPP)

Service is tasked to handle PPP projects in the Department. The Office has come up with a short

and long list of priority PPP projects proposed for implementation. These priority projects are the

outputs of the on-going JICA-assisted Preparatory Survey for Public-Private Partnership

Infrastructure Development Project in the Philippines. PPP refers to a public good or private

enterprise that is financed, built, and run as a result of a collaboration between the public and

private sectors. In the Philippines, PPP is similarly defined as a contractual agreement between

the Government and a private firm targeted towards financing, designing, implementing and

operating infrastructure facilities and services that were traditionally provided by the public sector

(Public-Private Partnership Center, 2015b).

II. Topic

Project Name: CENTRAL LUZON LINK EXPRESSWAY (CLLEx) Phase II (CABANATUAN-SAN

JOSE, NUEVA ECIJA)

Project Description: This project is under the Department of Public Works and Highways. The

project is a four (4)-lane, 35.70 km extension of Central Luzon Link Expressway (CLLEX) Phase

I, Tarlac to Cabanatuan City, which will connect from Cabanatuan City to San Jose City. The

project will pass through the municipalities of Talavera and Llanera in Nueva Ecija and will provide

a free-flowing alternative route decongesting traffic along the Pan Philippine Highway (PPH)

between said cities of Nueva Ecija and Tarlac Province. It also includes the construction of the
Toll Facilities of CLLEX Phase 1. The opening of CLLEX Phase 2 is expected around April next
year, it will also be permanently free of charge. Phase 2 will extend from Cabanatuan City to San

Jose in Nueva Ecija. Once fully completed, the whole CLLEX will have a total distance of 65km.

This project is Solicited Proposal which refers to projects identified by the implementing agency

(IA) from the list of their priority projects. In a solicited proposal, the IA formally solicits the

submission of bids from the public. The solicitation is done through the publication of an invitation

for interested bidders to submit bids, and selection of the private proponent is done through a

public competitive process

Project Benefits: CLLEX is an important east-west link in Central Luzon, shortening travel time

between Tarlac and Cabanatuan cities from 70 to 20 minutes. CLLEX will also ensure a seamless

traffic flow to and from Metro Manila through the North Luzon Expressway, SCTEX and TPLEX.

Expected to serve some 11,200 people daily, it will decongest traffic on Daang Maharlika, boost

ecotourism and allow farmers and entrepreneurs to deliver goods faster. A second phase will

extend CLLEX to San Jose City in Nueva Ecija, making the whole route 65.7 km long. CLLEX is

just one of DPWH’s 15,000 projects for 2016-2020 across Central Luzon—Tarlac, Nueva Ecija,

Aurora, Bataan, Bulacan, Pampanga and Zambales. Regionwide, the agency completed 2,438

km of road and 489 national bridges. That tally covers the Pulilan-Baliuag Bypass Road opened

in March and the Bagac-Mariveles Diversion Road opened in December. Last May, DPWH

opened the Luyos-Buliran Bridge in San Antonio, Nueva Ecija, as well as an access road leading

to declared tourist destinations from the MacArthur Highway to New Clark City (NCC) via

Kalangitan Road in Capas, Tarlac.

Project Objectives:

This project aims to:

● Provide fast, safe, comfortable and reliable means of transportation from Metro Manila to

various destinations in the Central Luzon area for socio-economic development, thus

contributing to the decongestion of over-concentrated Metro Manila.

 ● Form an important lateral (east-west) link of the overall Expressway network in Region III.
● Provide a linkage between the existing Subic-Clark-Tarlac Expressway (SCTEX) and PPH

at some latitude above the cities of Cabanatuan and San Jose.

● Provide a highway of international standards with a number of intersections.

Project Cost:

● Php 11.9830 B - Construction

● 0.6282 B - ROW

Project Status:

- The Notice to Proceed (NTP) was issued to the Consultant.

- The Contract Agreement was approved by the Department and concurred by the

Japan International Cooperation Agency (JICA).

Project Alignment:
 III. Case Study A.

- Government contributions to PPP projects are made in kind in order to increase their

appeal to private investors. Providing capital subsidies, providing income subsidies, including tax

reductions, providing guaranteed annual revenues for a specific length of time, or transferring

existing assets are a few examples. The private party undertakes significant financial, technical,

and operational risks while offering a public service or project. The primary goal of organizations

in the public sector is to carry out tasks that benefit the broader public. Profits from commercial

operations are the primary goal of the private sector. Tax revenue, excise and other levies, bond

sales, treasury bills, and other sources provide funding for public sector organizations. PPP

benefits the public sector financially and otherwise. It overcomes the constrained funding sources

for public sector local infrastructure or development projects, allowing public monies to be

allocated for other local priorities. It is a system for dividing project risks between the public and

private sectors. In PPPs, the party that is most qualified to handle and bear the consequences of

the risk involved assumes the risks (Public-Private Partnership Center, 2015b). The public sector

is better positioned to assume legal and political risks (such as those related to the legal system,

dispute resolution, the regulatory system, government policy, taxation, expropriation, and

nationalization, among others) than the private sector is to assume commercial risks (such as

supply and demand risks) (European Investment Bank, 2015a). According to the Asian

Development Bank (2008), PPP should lead to better and less expensive services for the

consumer and a reduced overall financial expenditure for the government with efficient

implementation. The government's cost commitment is likely to be targeted, limited, and

structured within a logical overall finance plan; it is further said that this is true even if it continues

to pay some of the investment or operational costs.

PPP is designed to benefit both sectors by enhancing project implementation procedures

and service delivery processes. Value for Money (VfM), which focuses on lower costs, better risk
distribution, quicker implementation, improved services, and potential revenue generation, is what

PPP emphasizes most. Better and more efficient public and private services and goods are

produced when public and private entities work together. In public-private partnerships, project

preparation is more meticulous to guarantee that the project is highly bankable and can withstand

public scrutiny. Adherence to the project design within the set timescales will result from better

project planning and execution. The government establishes the minimum performance criteria

and requirements for each project in PPPs with the goal of delivering high-quality infrastructure

and services (Public-Private Partnership Center, 2015b). Participants can exchange and share

knowledge, experiences, know-how, and expertise through collaboration. Governments have a

big part to play in encouraging industry to be more socially and ecologically conscious, and a

welldesigned corporate responsibility program for their jurisdictions can strengthen ties with the

business community as well.

B.

- There are many ways to form partnerships between the public and private sectors for

infrastructure and development projects. Prescribed in RA 7718 (amended BOT Law), there are

nine broad contractual arrangements possible, namely: build-operate-and-transfer (BOT),

buildand-transfer (BT), build-own-and-operate (BOO), build-lease-and-transfer (LT), build-

transferand-operate (BTO), contract-add-and-operate (CAO), develop-operate-and-transfer

DOT), rehabilitate-operate-and-transfer (ROT), and rehabilitate-own-and-operate (ROO). The

BOT Law does not include every type of contract conceivable. Other types of contractual

agreements can be eligible for PPP status under the BOT Law if the President approves them.

Concession and management contracts are two more contractual arrangements that qualify as

PPPs.

Below is a summary description of each of the contractual arrangements.

Table 1. Summary description of contractual arrangements:
PPP Private Sector Role Government Role Notes

Modality

Build- Finances and constructs; Provides franchise (if Includes a supply-

Operateand- operates and maintains required) and andoperate scheme, a

Transfer facility for a fixed term; regulates activities of contractual arrangement

(BOT) collects fees and charges BOT contractor; whereby the supplier of

to recover investments acquires ownership of equipment and machinery

facilities at the end of
plus profit; transfers facility cooperation period. for a given infrastructure

at facility, if the interest of the

the end of cooperation Government so requires,

period (maximum of 50 operates the facility.

years).
Buildand- Finances and constructs; Acquires ownership of May be employed in any
turns over ownership of
Transfer the facility to government facility after project, including critical
after project completion
(BT) construction; facilities which, for security
compensates
proponent at agreed or strategic reasons, must
amortization schedule
be operated by the

Government.

Build- Finances, constructs and Provides authorization All BOO projects upon

Own-and- owns facility; operates and and assistance in recommendation of the

Operate maintains facility in securing approval of NEDA-Investment

(BOO) perpetuity (facility operator BOO contract; Coordination Committee

may be assigned); collects
possesses the option (ICC) shall be approved by
 fees and charges to to buy the the President of the
recover investments
and profits. output/service Philippines.
provided by the
BOO operator.

BuildLeaseand- Finances and Compensates

Transfer constructs; turns proponent by way

(BLT) over project after of lease of facility at

completion; transfers agreed term and

ownership of facility schedule; owns

after facility after
cooperation/lease cooperation/lease
period. period.

BuildTransferandOperate Finances and Owns facility

constructs on a turn- after
(BTO) key basis; transfers commissioning.
title of facility after
commissioning;
operates the facility
under an agreement.
Contract- Adds to an existing Collects rental There may or may not
be a transfer
Add-and- facility; operates payment under arrangement with
agreed terms and regard to the added
Operate expanded project for schedule; regains facility provided by the
control at the end of project proponent.
(CAO) an agreed franchise lease term.

period.

DevelopOperateand- Builds and operates a Regains possession Project proponent

new infrastructure;
Transfer transfers of property turned enjoys some benefits
property/facility at the
(DOT) end of the cooperation over to the initial investment
period.
investors after creates such as higher

cooperation period. property or rent

values; akin to BOT

with the option to
develop adjoining
property

Rehabilit ateOperate- Refurbishes, operates, Provides franchise Also used to describe

to
and- and maintains facility; the purchase of a facility
ROT company;
Transfer facility is from
regains legal title of
(ROT) turned over after property/facility after abroad, importing,
the franchise period
refurbishing, erecting
franchise period. and consuming it within
the host country.
Rehabilit ate-Own- Refurbishes and Turns over facility Period to operate is
owns dependent on franchise
andOperate and provides agreement.
facility; operates
(ROO) facility in perpetuity as franchise to operate;
long as there is no
franchise violation. may opt to share in

the income of

ROO company.

C.

- An economic intervention is a step that a government or international organization takes

in a market economy to influence the economy in ways other than the usual ones—regulating

fraud, upholding contracts, and offering public goods and services. The government may

occasionally impose regulations to restrict individual and collective decisions regarding social and

economic issues. Government intervention is the process through which the government

intervenes in and alters the way that certain sectors and financial market’s function. Investment

and gains in output are the main drivers of economic growth, which enables employees to earn

better wages and live in higher-standard environments. This project has a big effect on our

economics in the Philippines. CLLEX is set to boost ecotourism, allow farmers, entrepreneurs to

deliver goods faster. To conduct commercial activities successfully and efficiently, it is necessary

to have vital facilities including roads, rail, power, water, and communication. In the present world,

operating any commercial enterprise effectively without these infrastructures is all but impossible.

People and businesses are free to decide on any business-related matters in a laissez faire

economic system. People won't be able to pay for infrastructure decisions such as development

and improvement out of their own pockets, though. Government must therefore meddle in the

economy to build the country's market infrastructure. Government participation in the economy

results in the creation of various laws and ordinances that people or groups of individuals are

required to follow. With the creation of laws and regulations, personal freedom to choose how to
act and spend money is restricted. People find it more challenging to increase their financial

activity, which would result in less economic growth for the country.

Motorists and commuters may now use parts of Central Luzon Link Expressway (CLLEX)

after an 18-km section of the flagship infrastructure project opened on July 15. According to

Department of Public Works and Highways Secretary (DPWH) Mark A. Villar during an inspection

on July 14. “We will inaugurate … the first 18-km section of CLLEX from Subic-Clark-Tarlac

Expressway (SCTEX)/Tarlac-Pangasinan-La Union Expressway (TPLEX) connection in Tarlac

City up to the intersection of Aliaga-Guimba Road in Aliaga, Nueva Ecija”. (2021). Road is

basically one of the needs that we need here in the Philippines so that the product that will travel

has no chance to delay. Despite the COVID-19 pandemic, some of the 30-kilometer Central Luzon

Expressway (CLLEX) was finished, giving drivers in adjacent municipalities more options for

routes. Around 11,200 commuters and drivers make the trip from Tarlac City to Cabanatuan City

each day. Traffic congestion on the main highways and expressways in the Philippines not only

negatively affects people's quality of life but also slows economic progress and creates

environmental hazards. When CLLEX is finished, the Pan-Philippine Highway will be 48 percent

less congested and the travel time between Tarlac City and Cabanatuan City will drop to 20

minutes, according to DPWH Project Manager Engineer Ben Bautista. Additionally, there will be

a shorter travel time between Metro Manila and Cabanatuan City than the current three hours and

six minutes on the Pan-Philippine Highway or the current two hours and fourteen minutes on the

SCTEX - Tarlac Sta. Just one hour, 53 minutes, Rosa Road.

D.

- The Philippines is a country with a thriving middle class where nobody is in need. People

are generally happy, healthy, intelligent, and creative. The nation has a high level of trust. where

families can thrive in thriving, diversified culture resilient neighborhoods. In comparison to other
ASEAN nations that have been recovering from the Asian Economic Crisis more quickly than the

Philippines, the manufacturing sector has seen substantially less direct investment. This has

contributed to the Philippines' relatively sluggish economic growth. Improving the whole

investment environment, particularly the road network, has been a pressing issue in order to

encourage both domestic and foreign investments. Particularly, the economic activity is very

concentrated in Metro Manila, which accounts for only 0.2% of the country's area but accounts

for 37% of GDP and 13% of the entire population. This excessive concentration results in severe

congestion and delays in the movement of people and commodities, causing significant economic

harm and decreasing the nation's competitiveness as a location for foreign investment.

Before constructing a new factory or embarking on a new project, sensible managers do

a cost-benefit analysis to assess all potential costs and profits generated by the project. The

analysis's findings will determine if the project is financially feasible or whether the business

should move forward with a different initiative. The Japan International Cooperation Agency, which

also provided loan funding for the project, initially proposed CLLEX in 2010. Construction on the

project and its groundbreaking both took place in 2017. According to DPWH, the 30-km

expressway project should be finished under this administration. President Rodrigo R. Duterte

said the newly opened Central Luzon Link Expressway (CLLEX) will benefit entrepreneurs,

consumers and the economy. Duterte emphasized that once completed, the 30-kilometer

expressway will not only connect Tarlac City and Cabanatuan City but will also improve access to

several localities in Tarlac and Nueva Ecija. “This project will greatly benefit commuters going to

and from Metro Manila and Cabanatuan City and improve movement of goods going to and from

Metro Manila and Central Luzon,” Duterte said during Thursday’s Opening of the 18kilometer

Tarlac Interchange to Aliaga Section of CLLEX Project Phase 1. He stressed that the effective,

efficient, safe and timely completion of major infrastructure and transportation-related

developments manifests the government’s commitment to the people. “To our Kababayans, be
assured that this administration will remain committed in fulfilling its mission to provide a more

comfortable life for all Filipinos,” he stressed. Duterte likewise assured transparency,

accountability, and integrity in all development projects. This project's objectives are to: Provide

quick, secure, dependable, and comfortable transit from Metro Manila to a variety of Central

Luzon sites for socioeconomic development, hence aiding in the decongestion of overcrowded

Metro Manila. Because of the success of this project the Duterte administration took a chance to

give some gratitude to the government of Japan who has the idea of CLLEX. “The infusion of P12

billion by the Japan International Cooperation Agency attests to the indispensable role of Japan

as one of our most important partners in attaining inclusive progress through infrastructure

development,” he stated. (CLJD/Trixie Joy B. Manalili-PIA 3).

This kind of Public-private partnership projects has a big role in the life of every Filipino

and to our economy. One of the popular projects of the government is the “Build Build Program”,

and the CLLEX is under that program. The Department of Public Works and Highways serves as

the government's engineering and construction branch and is tasked with continually developing

its technology to guarantee the safety of all infrastructure facilities and to ensure that all public

works and highways are built with the highest level of efficiency and quality. In accordance with

governmental development goals, DPWH is currently in charge of planning, designing, building,

and maintaining infrastructure, particularly the system for developing flood control and water

resources, national highways, and other public works. And they have their mission that they want

to achieve. Which is the “To provide and manage quality infrastructure facilities and services

responsive to the needs of the Filipino people in the pursuit of national development objectives.”

Citations:

https://www.dpwh.gov.ph/dpwh/PPP/PPP_index

https://www.dpwh.gov.ph/dpwh/PPP/projs/cllex_phase2 https://byjus.com/commerce/difference-
between-public-and-private-sector/ https://business.inquirer.net/327387/cllex-set-to-boost-

ecotourism-allow-farmers-entrepreneursto-deliver-goods-faster

https://www.investopedia.com/ask/answers/021715/what-impact-publicprivate-

partnershipshave-economic-growth.asp https://nro13.neda.gov.ph/ppp-knowledge-corner/

https://ppp.gov.ph/ppp-program/what-

isppp/#:~:text=Under%20a%20PPP%20scheme%2C%20the,and%20water%20and%20sanitati

on

%20projects. https://www.businesstopia.net/economics/micro/effect-government-intervention

https://www.jica.go.jp/philippine/english/office/topics/news/210205_01.html

https://www.portcalls.com/tarlac-nueva-ecija-cllex-link-opened/

https://pia.gov.ph/news/2021/07/15/newly-opened-cllex-to-benefit-the-

peopleeconomyduterte?fbclid=IwAR3FMbMimns4g_vY8kn7GyZ96l0CKkLNM11mnvJ4XiHRRf

3wFHl3 Cumsu-A