Harnessing Public-Private Partnership (PPP) with Local

Government Units (LGUs) for SWM Projects

Department of Energy’s Waste-to-Energy Forum 2023

Eleazar E. Ricote
Deputy Executive Director
PPP Center of the Philippines

Iloilo City, Iloilo | May 4, 2023

1
Presentation outline

1 PPP Concepts

2 PPP Options for SWM

3 The PPP Program and the PPP Center

4 Other Initiatives in the SWM Sector

2
PPP concept

Integrated approach (design + build +

GOVERNMENT PRIVATE SECTOR operate + maintain) can reduce whole-of-
life project cost

More efficient delivery of public services

by tapping private sector’s capacity and
technology
▪ A long-term contractual agreement
between government and a private firm
▪ Targeted towards financing, designing,
implementing and operating
Optimal risk allocation (where risk is
infrastructure facilities and services
allocated to party who can best manage it)
▪ That were traditionally provided by the
can also reduce project cost
public sector
PPP legal frameworks in the Philippines

NEDA Joint Local PPP

Implementing RA 7718 Special
Venture (JV) Code or JV
agency (BOT Law) Charters
Guidelines Ordinances

National
government
agencies
✓   
SUCs, GOCCs,
GCE, GICP, GFI,
(including ✓ ✓  ✓
WDs)

Local
government
units
✓  ✓ 
5
Common project modes and structures

Solicited BOT-type arrangement

mode PPP under BOT Law
Project
Enabling
mode Unsolicited Joint Venture thru Local PPP
Laws Code/NEDA JV Guidelines
mode

Full Private sector undertakes all aspects of the project

PPP Design Construction O&M Recovery of Investment
by Private Sector
Project Partner
Private sector undertakes only certain portions of the project
structures Other ✓ User fee
forms of Design Construction O&M ✓ Availability payment
PPP ✓ Commercial
(hybrid or Design Construction O&M revenues
blended
Legend: financing) Design Construction Operation Maintenance
Gov’t IA

Private sector 7
Presentation outline

1 PPP Concepts

2 PPP Options for SWM

3 The PPP Program and the PPP Center

4 Other Initiatives in the SWM Sector

8
Advantages of PPPs in SWM
➢ In PPPs, there is a natural incentive for the
private sector to ensure timely completion of
the project since, repayment commences
during operations or availability of the facility.
Similarly, in the case of integrated/full PPPs,
the projected duration (O&M phase) to make
revenue out of the asset will not be reduced if
the project is delivered as scheduled.
➢ An increase in cost reduces expected benefits from
the project. Therefore, as much as possible, hidden
costs associated with cost overruns should be
Reduction of taken into account. Innovative and efficient
cost overruns designs and construction methods of the private
sector minimize development costs in particular,
and contribute to life-cycle costs savings as a
whole.
Reduction of
delays in delivery
➢ The operation and maintenance of the assets to be
used by the project requires skills, systems and
Increased processes that are either lacking or not inherent in
management the implementing government agency. Whenever a
efficiency private operator takes over O&M, there is usually a
reduction in operating costs as a result of more
efficient management.
9
PPP options for SWM projects
A. Integrated / Full PPP approach B. Hybrid Approach
Integrated Private sector partner (PSP) to develop and maintain the whole Specific stand- PSP to undertake selected project components (e.g., design &
development integrated solid waste management system alone projects construction only, operations & maintenance only, operations
only) of the solid waste management system
Possible scope Financing, design, development, and maintenance of the Possible scope Operations and maintenance of the integrated solid waste
integrated solid waste management system management system

Repayment scheme User Fees Repayment scheme Depending on the scope of the PSP, the repayment scheme can
• Applicable to services with potential for revenue generation be through:
• User fees
Availability Payments • Availability payments
• Applicable to sectors where the end-users are not expected • Combination of user fees and availability payments
to make payments for services availed or transactions made.

Advantages • Single procurement process and point of accountability Advantages • Only key components will involve a PPP proponent
• Minimal interface risk between components

Design & Build O&M

Design Construction O&M (Development of specific
component)

Figure A: Illustrative PPP contract

example of integrated Traditional
PPP approach PPP contract
Company X (Special purpose vehicle) procurement
10
Figure B: Illustrative example of unbundled approach
Potential PPP projects in the SWM sector

Waste Segregation Waste Collection SWM Disposal / Treatment

Projects Arrangements Technologies

Installation of Material Sanitary Landfill

Collection vehicles
Recovery Facilities

Waste-to-Energy Facility
Communal bins for
Training programs for
collection of segregated
LGU’s to household Waste-to-Value Facility
wastes

Sample bundling of SWM Major Scopes as Potential PPP Projects

Project A

Project B 11
SWM PPP Projects in the pipeline
Under implementation Under development

▪ LGU-GWMS Material Recovery Facility

(MRF) Project
▪ Municipality of Malay Ecological Solid
Waste Management Project
▪ Dagupan Waste-to-Energy Project
▪ Joint-Venture Agreement for the Puerto
Princesa City Waste to Energy Project
▪ Tagum City Waste-to-Energy Plant Project
▪ Hermosa Sanitary Landfill
▪ Passi, Iloilo SWM Project
General Santos Sanitary
Landfill Project
O&M of General Santos City
Sanitary Landfill (SLF) and the
establishment and
implementation of a waste
conversion program.
Quezon City Integrated SWM
Facility
Construction and O&M of
waste-to-energy facility (up to
3,000 MT of waste and up to
36 MWe of generated power).

▪ Province of Catanduanes Solid Waste Management

Project
▪ Zamboanga City Integrated SWM System
▪ South Cotabato Waste to Energy Project
Project development of local SWM projects
Initial steps in PPP project development
1 2 3 4 5
Prepare list of Prioritize Submit viable
programs and Conduct PPP Conduct of PPP
projects for PPP Projects
projects for Multi-Criteria Feasibility
potential PPP further for PPP
Assessment Studies
implementation development Approval

▪ LGUs may include its proposed SWM projects in its required plans such as the Comprehensive
Land Use Plan (CLUP), Comprehensive Development Plan (CDP), and most especially its 10-year
SWM Plan.

▪ A Multi-Criteria Assessment geared from PPP may be undertaken by the LGU to determine
whether the SWM Project shall be prioritized for further preparation of its feasibility study.

13
Presentation outline

1 PPP Concepts

2 PPP Options for SWM

3 The PPP Program and the PPP Center

4 Other Initiatives in the SWM Sector

14
 Localand
PPPs PPPthe
Projects
Philippine Infrastructure Development Program

Job creation through infrastructure

8-POINT
4 •
improvement, among others,
Accelerate spending and increase investments
SOCIOECONOMIC in infrastructure
AGENDA • Continue and expand, wherever possible, the
existing government infrastructure program

FINANCING AND IMPLEMENTATION MECHANISMS

Government Financing Government Borrowings
Domestic & foreign debt,
General appropriations,
corporate funds official development
assistance (ODA)
Private Sector Financing
Public-Private Partnership
(PPP)

15
Philippine Development Plan (PDP) 2023-2028
The PDP 2023-2028 identifies infrastructure as critical to the
economic transformation. The following were among the strategies
discussed:

➢ Broaden waste minimization and diversion initiatives

▪ Intensify waste recovery, reuse, and recycling as well as manufacturing and production
using secondary raw materials to encourage public and private investments (e.g. green
technologies and facilities)

➢ Explore technology options for SWM and WTE

▪ Promote research and development, technology development and science-based policy
recommendations
▪ Viability of waste-to-energy technologies will continue to be studied and the
appropriate environmental regulatory framework will be put in place

➢ Facilitate Clustering of LGUs

▪ Take advantage of economies of scale to enhance the financial viability of waste
management facilities to attract private investors

16
 PPPs in the Philippines

Source: https://newsinfo.inquirer.net/1640581/get-into-more-ppps-bongbong-marcos-tells-lgus

“Public Private Partnerships or PPPs hold great potential for that Source: https://journal.com.ph/marcos -pushes-for-ppp-to-complete-infrastructure-projects/
expansion, for infrastructure development and for innovation.”
- Pres. Ferdinand Marcos Jr., SONA 2022
17
PPP projects
as of March 31, 2023

218 100AWARDED PROJECTS

PROJECTS IN THE PIPELINE
PHP 2,337 Billion PHP 2,249 Billion*

No. PhP (bn) No. PhP (bn)

National 88 2,156 National 79 2,140
Local 130 182 Local 21 108

*Total cost does not include projects undergoing studies and

with costs that are yet to be finalized 18
PPP trends: expanded sectors in the pipeline
as of March 31, 2023

National PPPs (79) Local PPPs (21)

Water supply and Vertical

Transportation 5 4
62 sanitation infrastructure /
(airport, road, rail,
government
port, and terminal)
property
Health development
6 (hospital facilities 4
Solid waste
and services) management

Vertical infrastructure /
5 government property Emerging sectors in local PPPs
development
Transportation
4 (e.g. port, road, bus rapid 3 Energy
4 IT system transport [BRT], and terminal)

1 Water supply and 1 IT system

sanitation

1 Tourism
19
PPP Center of the Philippines

The PPP Center facilitates the implementation of the country’s PPP Program. It serves
as a central coordinating and monitoring agency for all PPP projects in the country.

Advocate for POLICY

reforms to enhance
Provide technical
assistance in enabling environment
PROJECTS
(development to
implementation) Conduct CAPACITY
BUILDING activities to
improve skills of agencies

20
 Local PPP
Support Projects
in projects

Project Development & Unsolicited Proposals

Procurement
Assistance in the review
and/or development of
feasibility studies and tender
documents; and advisory
services from project
approval to procurement.
• PDMF
Project Development and
Monitoring Facility
• Business Case
In-house conduct of business
case for selected projects via
Technical Assistance Agreement
(TAA)
Assistance in the evaluation,
negotiation and management of
unsolicited proposals
PPP Center’s
in-house project
development &
monitoring teams
Project Monitoring
Coordination and monitoring
of awarded projects to ensure
compliance with the
contractually agreed terms

21
Local PPP
Project Projects
development assistance via PDMF
✓ Php 4.4 billion* revolving fund created under EO No. 8, s. 2010 Project preparation and
as amended by EO 136, s.2013 managed by the PPP Center transaction advisory
(PPTA) consultants
✓ Objective is to enhance investment environment for PPPs and to
Solicited mode
develop a robust pipeline of viable and well prepared PPP • Conduct of feasibility study
infrastructure projects through BOT Law and its IRR, Joint • Project structuring
• Preparation of tender
Venture Arrangements and Local PPP Code documents
• Management of bid process
✓ Implementing agencies, such as LGUs and water districts, can tap • Assistance until financial close
the PDMF for engagement of consultants who can assist in
Unsolicited mode
project development and procurement • Evaluation and negotiation of
*fund balance of PhP 3.18B as of February 28, 2023 unsolicited proposals
• Assistance in management of
Swiss Challenge until financial
PDMF Benefits close
Reimbursement of the
PPTA
Payment to consultants initially
paid by PDMF and later
reimbursed by the winning bidder
and/or IA/LGU through normal
budgetary process.
Consultants are paid on a
milestone basis.
No pre-termination charges or
success-fee.
PDMF Guidelines may be accessed
here:
https://ppp.gov.ph/pdmf-guidelines/

Access to best Integrated package of Consultant contract

practices/technology support across a project’s management is handled
transfer through life cycle from project by PPP Center’s PDMF
international and national development to award to Service
experts on ICT private proponent
PDMF-supported PPP projects
National Projects Local Projects

NEDA-sa-Makati UP Los Banos Agro-

Property Redevelopment Industrial
Information and
Technology Parks

Bislig Water Supply and

Improvement and O&M
Septage
of Kennon Road

University of the San Ramon Newport in

Philippines (UP) Zamboanga
Philippine General
Hospital (PGH)

23
 Local PPP
Support Projects
in policies

Assistance in the review and formulation of legal

framework (BOT Law, Joint Venture Guidelines,
01 PPP or Joint Venture Codes of local governments)

PPP Governing Board’s policies

02
Strategy frameworks for PPP development in identified priority
03 sectors

24
 Local PPP
Capacity Projects
building assistance
The PPP Center’s Capacity Building Framework offers various courses focusing on three categories:
✓ Introductory courses on PPP
✓ Project specific courses
✓ Special topics on PPP

In-person capacity building e-Learning modules on the Philippine PPP Program

25
Online capacity building activities
Presentation outline

1 The PPP Program and the PPP Center

2 PPP Concepts

3 PPP Options for SWM

4 Other Initiatives in the SWM Sector

26
Promoting and paving the way for PPPs in SWM Sector

Contribution on
PPP Center SWM
the WtE Senate
Sectoral Strategy
Bill

Oct 2022
May-Jul 2020

Aug 2019 Nov 2021 Mar 2023

Forum on Knowledge Sharing Knowledge Sharing

Renewable Energy Session: Session: Deep Dive
and Waste-to- WtE Best Available Session on Delivering
Energy PPPs Technologies (BAT) / Waste Infrastructure
Best Environmental Program
Practices (BEP)
Guidelines
Promoting and paving the way for PPPs in SWM Sector

Technical assistance from partners

▪ The PPP Center has secured support from various development partners (i.e., ADB, AFD,
Netherlands Enterprise Authority, JICA Expert Team, etc.) in the preparation and review of SWM
projects, PPP guidelines, and conduct of knowledge sharing sessions.

Capacity building activities

▪ The PPP Center also held various online capacity building activities for the conceptualization of
local SWM projects.
Next steps

Technical assistance to LGUs and other agencies for SWM PPP projects
▪ Preparation or updating of SWM plans
▪ Crafting of PPP Project Concepts and development of project feasibility study (tap PDMF
and other project preparation support)
▪ Assessment and evaluation of unsolicited proposals received
▪ Capacity building for PPP competencies

Further enhancing legal and policy landscape for private sector participation
such as PPPs in SWM.
Mactan-Cebu International Airport
(operational)

Thank you!
Bislig Bulk Water Supply and Septage UP Philippine General Hospital (PGH):
(under development) PGH Cancer Care in Manila
PGH Diliman
(under evaluation and approval)
For further information, please visit:
www.ppp.gov.ph

For inquiries, kindly e-mail:

info@ppp.gov.ph

PPPCenter.Philippines

@PPP_Ph

Public-private-partnership-
Center-of-the-Philippines

PPPPinas 31