Transcript NAIA Expressway Project

NAIA Expressway Project
INVESTORS’ BRIEFING
24 June 2011
The Investment Opportunity
• The NAIA Expressway Project, sponsored by the
Department of Public Works and Highways (DPWH),
is one of the priority projects of the Government of
the Republic of the Philippines (GOP) under its
Public-Private Partnership (PPP) Program.
• The Project is one of the components of the Metro
Manila Urban Expressway System that is intended to
provide a high-standard expressway.
Proposed HSH Network in MM
and its 200km Sphere
EXISTING : 300KM
Project Name
Length
(km)
Subic-Clark-Tarlac Expressway
93.77
North Luzon Tollway
82.62
C-5 Expressway (Segment 8.1)
2.34
Metro Manila Skyway, Stage 1
9.30
SLEX (Magallanes-Alabang)
13.43
Manila Cavite Toll Expressway
6.75
South Luzon Tollway
36.03
Manila-Cavite Toll Expressway (R-1 Extension)
7.00
Metro Manila Skyway, Stage 2
6.86
Southern Tagalog Arterial Road (STAR)
42.00
PLANNED/ON-GOING CONSTRUCTION : 127KM
Project Name
Length
(km)
Tarlac-Pangasinan-La Union Toll Expressway
88.58
C-5 Expressway (Segment 8.2, 9 & 10)
19.92
NlLEx-SLEx Connector
13.34
NAIA Expressway
5.2
6
The NAIA Expressway
 Will facilitate the efficient flow
of existing and future traffic to
and from the country’s premier
international and domestic
airport, the NAIA Complex.
 Will link two major expressways
serving Metro Manila.
7
The Investment Opportunity
• The Republic of the Philippines (ROP), represented
by DPWH, will be the direct counterparty in the Toll
Concession Agreement (TCA).
• The Project features a toll rate structure that is
competitive and affordable.
Committed Government Support
• Conduct of a fully transparent and competitive
procurement process following the Philippine
BOT Law and its Implementing Rules and
Regulations.
• Government grant contribution for CAPEX or
the Government Financial Support (GFS)
Committed Government Support
• ROW provided free and clear to
Concessionaire by the pre-agreed timeline to
be defined in the TCA
• Guarantee on the issuance of the Toll
Operations Certificate (TOC) from TRB
• Guarantee on Toll Adjustment application.
Advisors
• Transaction Advisors:
– Development Bank of the Philippines (DBP)
– International Finance Corporation (IFC)
• Technical Advisor:
– Japan International Cooperation Agency (JICA)
Advisors
• IFC in turn hired specialized consultants to complement
the services offered by the Transaction and Technical
Advisors of DPWH:
– expressway technical specialists (LeighFisher),
– international legal consultants (Hogan Lovells Singapore), and
– local legal individual consultants
Project Description
• Construction of an addition 4.6 km of 4-lane
viaduct from NAIA Terminal 3 to Roxas
Boulevard, over the existing roads of Sales
Avenue, Andrews Avenue, Domestic Airport
Road and NAIA Road.
• Upgrading of Phase I (600m) to Phase II
standards.
• Provision of ramps to and from NAIA Road,
Terminal 3 and other strategic locations.
Project Description
• Provision of toll plazas, plus additional toll
operating equipment and safety facilities for
the DPWH-constructed Phase I to standards
compatible with those of Phase II.
• Preparation of a Detailed Engineering Design.
• The Operation and Maintenance of the entire
NAIA Expressway (Phase I and Phase II) as an
open-system tolled expressway.
Project Description
Minimum Expressway Configuration
Project Description
Toll Booth Configuration
Project Description
Key Characteristics
Elements
Characteristics
Phase 1 (existing, for adjustments)
0.6 km
Phase 2
4.6 km
Total Length (Phase 1 & 2)
5.2 km
No. of Lanes
4 lanes
Ramps
5 on and 5 off
Concession period
35 years
Construction period
2 years
Preparation of the Detailed Engineering Design
10 months
Operation start year
2015
Project Rationale
• Vehicles travelling from the South Luzon
Expressway or Skyway to Roxas Boulevard or
the Manila-Cavite Expressway have to pass
through the existing NAIA roads or EDSA.
• Roads around NAIA are already congested.
• There is a need to ensure efficient travel to
and from the airport terminals  this will
support both business travelers and tourism.
Roxas Boulevard
Manila-Cavite Coatal Road
Skyway / SLEX
AVERAGE TRAVEL SPEED
ALONG EXISTING NAIA ROADS
EDSA
Terminal 3
Terminal 2
Terminal 1
LEGEND
Less than 10km/hr
10km ~ 20km/hr
20km ~ 30km/hr
Ov er 30km/hr
Project Cost
• The estimated civil works cost for NAIA
Expressway is approximately Php9.3 billion.
• The civil works cost was estimated based on
similar Government and BOT projects
implemented or tendered from 2010 up to the
present.
Bidding Framework for the Transaction
Competitive and Transparent Process
• The international competitive bidding for
the Project will be conducted strictly in
accordance with the rules and procedures
of the BOT Law and its Revised IRR
• Two Stage System:
• Pre-qualification of Bidders based on technical,
legal and financial criteria
Bidding Framework for the Transaction
Competitive and Transparent Process
• Two Envelope System:
– Only those Bidders who pre-qualify will
be eligible to formally submit their
technical and financial proposals
• Technical Proposal
• Financial Proposal
– Selection of bidder with the lowest
required GFS as winning bidder
Concession Structure
• Build-Transfer-Operate (“BTO”) variant under the BOT Law
• Toll Concession Agreement Scheme:
– Concessionaire will Finance, Build, and Operate and Maintain the
adjusted Phase 1 and completed Phase 2 as one open system.
– 35 year concession period, inclusive of construction period.
– Legal transfer of ownership of NAIA Expressway to DPWH will be
automatic upon issuance of Certificate of Final Construction
– Toll Structure Competitive and Affordable: Opening tolls set by
DPWH and approved by TRB. Periodic toll adjustments shall be
made bi-annually and based only on a domestic inflationary index
– DPWH to procure and deliver in a timely manner the required
ROW and GFS to partially cover the capital cost of implementing
the Project
Key Commercial Terms
• Concessionaire Obligations for the 35
year concession period:
– raise financing for the balance of the Project cost
(not covered by the GFS) and achieve financial
close within 1 year from the signing of the TCA;
– design the Phase I adjustments and Phase II
works;
– construct the Phase I adjustments and Phase II
works within 2 years from approval of the Detailed
Engineering Design;
Key Commercial Terms
– operate and maintain Phase I and Phase II to
defined levels of performance standards;
– collect the authorized toll from users of the NAIA
Expressway which shall be operated as an open
system;
– assume the commercial risks; and
– turn-over the NAIA Expressway in good condition
to DPWH at the end of the concession period.
Key Commercial Terms
• DPWH Obligations for the 35 year
concession period:
– procure and deliver in a timely manner the
required ROW;
– subject to Concessionaire compliance with predefined obligations, ensure the grant of the TOC
from the TRB
Key Commercial Terms
– assist the Concessionaire in securing necessary
national government consents for the Project;
– provide to the Concessionaire the agreed GFS
based on pre-agreed milestones, which will be
defined in the TCA; and
– ensure the application of the toll adjustment
formula prescribed in the TCA and provide
compensation in the event of disallowances of
authorized computed tolls.
Key Commercial Terms
• The bid parameter will be the lowest required GFS.
• The selection of the Independent Consultant (IC) will
be done by DPWH from a shortlist of firms to be
approved by the Concessionaire. The cost of the IC
shall be borne equally by DPWH and the
Concessionaire.
• There will be two (2) sets of tolls for the Expressway,
one applied on the main expressway and the other
for the segment to and from Terminal 3.
Key Commercial Terms
• Opening tolls will be set by DPWH and approved by
TRB. The approved toll rates will be disclosed during
the tender process.
• A performance regime related to efficient flow of
traffic, ride quality, safety, security and cleanliness
will be defined in the TCA and payment obligations
will be imposed on failure to meet Key Performance
Indicators.
• Force majeure shall be a risk that will be shared by
both the Concessionaire and DPWH.
Toll Rate Adjustment
Periodic toll adjustments shall be made bi-annually and based
only on a domestic inflationary index based on the following
formula:
TRn= TRo [(CPIn/CPIo)]
where:
TRn
=
new Toll Rate as adjusted
TRo
=
old Toll Rate as of the last adjustment
CPIn =
CPI for month of the new review date
issued by the NSO
CPIo =
CPI for the month of the last review date
issued by the NSO
Key Risk Allocation Matrix
Risk/Responsibility
Traffic
Toll & Adjustment Implementation
Project Financing
Inflation & Foreign Exchange
Basic ROW Acquisition & Delivery
Allocation
Concessionaire
DPWH
Concessionaire and DPWH
Concessionaire
DPWH
Design/Construction
Concessionaire
Operation/ Maintenance
Concessionaire
Political Risks
Force Majeure
Turn-over at the end of Concession
DPWH
Concessionaire and DPWH
Concessionaire
Remarks
No minimum traffic guarantee
Compensation provided for disallowance of
adjustment based on agreed formula
Private financing and GFS, respectively
Relief provided for domestic inflation through
Toll Adjust formula
Free and clear, delivered by pre-agreed
timeline
Performance Security for Construction
posted in favor of DPWH
KPIs set with corresponding penalties for
non-compliance, Performance Security for
Operations posted in favor of DPWH
Limited events
Relief provided to Concessionaire on O&M
performance of obligations, procedure and
mechanism for addressing impact of FM
events to be provided in the TCA
At pre-agreed conditions, testing &
acceptance regime included in TCA
Foreign Ownership and Management
• The Philippine Constitution, provides that no
franchise, certificate or any other form of
authorization for the operation of a public utility
shall be granted except to citizens of the Philippines
or to 60/40 companies.
• Foreign ownership and management is NOT
PROHIBITED on the level of the Concessionaire.
• However, the Facility Operator MUST BE at least
60% Filipino owned and controlled.
Indicative Timetable
2011
July
August
September
-
October
December
-
Publication of Invitation to Participate and Bid
Pre-qualification Conference
Submission of Qualification Documents
Notice of Pre-qualification
Release of Draft Concession Agreement to Pre-qualified Bidders
Pre-bid Conference
Release of Final Concession Agreement to Pre-qualified Bidders
2012
January
March
-
Submission of Bid and Issuance of Notice of Award
Signing of the TCA
2013
March
April
-
Approval of the Detailed Engineering Design and Delivery of ROW
Start of Construction
2015
April
-
Start of Operations
2048
March
-
Turn-over of the NAIA Expressway to DPWH