Largest infra fund in talks with firms interested in PPP

MANILA, Philippines - Managers of the country’s largest infrastructure fund is in talks with firms interested in bidding for public-private partnership (PPP) projects for possible tie-ups and collaborations, an official said yesterday.

“We have few projects where we signed MOUs (memorandum of understanding) and term sheets…, some of them are for PPPs,” said Michael de Guzman, managing director of Macquarie Capital of the Australian-based Macquarie Group of Companies.

Macquarie, through its division Macquarie Infrastructure and Real Assets, manages the $625-million Philippine Investment Alliance Infrastructure (PINAI) which was set up together with the Asian Development Bank and the Government Service Insurance System last July.

De Guzman declined to name the projects where the fund will be invested, but said fund managers are specifically interested on “roads, rails, airports and schools.” He also refused to name the companies where they signed agreements with.

“Once projects are bid out, you will see there if the fund has invested something. So just wait,” he told reporters on the sidelines of the Philippine Energy and Infrastructure Business Meeting.

“The fund is willing to join consortiums as part of the bidder. We are also looking to partner with Philippine sponsors to play as supportive role in financing,” De Guzman said.

Recently, GSIS president and general manager Robert Vergara said PINAI would likely bid for the operation and maintenance of the Light Rail Transit Authority (LRT) Line 1, which is currently at the pre-qualification stage.

The government targets to roll out — meaning to publish invitation to pre-qualify to bid — eight PPP projects this year after delays emanating from project reviews and change in leadership hit the program last year.

So far, only two PPP projects have been awarded since PPP’s launch in November 2010 — the Daang-Hari-South Luzon Expressway link and the School Infrastructure Project. Those in the pipeline included the LRT lines 1 and 2 maintenance and extension, construction of the Ninoy Aquino International Airport Expressway Phase II, modernization of Philippine Orthopedic Center and Vaccine Self-Sufficiency Program Phase II

PPP Center executive director Cosette Canilao told reporters yesterday more PPP projects are underway by next year. “As said earlier, we target 22 projects until next year. So this year, we plan to roll out eight, while the rest will be for 2013,” she explained.

“We are still developing new projects (for 2014 and beyond),” she added.

De Guzman said PINAI is also looking at infrastructure undertakings outside PPP.

 “We are also okay with projects on other parts of Luzon, where local government play an important role. The Fund can provide up to 50 percent of equity (in those projects),” he said.