PUBLIC-PRIVATE PARTNERSHIPS

BUILD, OPERATE AND TRANSFER JOINT VENTURES PROCUREMENT DISPOSITION OR SALE LEASE CONCESSION AGREEMENT CORPORATIZATION CONTRACTING FRANCHISING DONATION

BUILD, OPERATE AND TRANSFER

BOT-CASEMAN MULTI PURPOSE BTO- CIVIL REGISTRY SYSTEM (NSO) BLT- MANDALUYONG MARKET PLACE BOO-DATABASE INFRASTRACTURE (LTO) ROM-CLARK AIRBASE DIESEL PLANT (NPC) BT-TALISAY CITY HALL DOT-DEVELOP OPERATE AND TRANSFER

BUILD, OPERATE AND TRANSFER-BOT

The best example where Public and Private Venture can be implemented in construction projects is trough the utilization of BOT scheme, Build Operate and Transfer. Simply stated, BOT is where the government has the land but does not have the sufficient capability to finance the project here comes a private individual, a corporation that is willing to develop, finance, contract and operate the project within 50 years.

THE MANDALUYONG EXPERIENCE

The previous Mandaluyong Public Market was totally razed by fire on August 25, 1990. The lot where the previous Public Market was established remained idle for a while. The Public Market Vendors were transferred to street sidewalks and park. The Public Market Consumers also complained about the inconvenience of going to street or sidewalk market. For this reason, the City Government therefore needed to rebuild the Public Market. It has to decide whether to construct a shopping Center with Public Market. The City Government ruled out availment of a huge loan from commercial banks.

THE DECISION TO BUILD A SHOPPING MALL WITH A PUBLIC MARKET AT THE GROUND FLOOR
The decision was premised on the following considerations: 1. 2. 3. FIRST-strong desire of Chairman Abalos for the City to have a shopping Mall of its own. SECOND-he knew very well that the place where the shopping Mall would be build is strategically located along major thoroughfare of the City. THIRD-he was convinced that a project confined to the construction of a Public Market without the Shopping Mall will not attract private investors to invest because of the high risk involved. It was likely that it will take a long period of time before the investor can recover its investment. The revenue stream expected from the operations of public market will not be very substantial.

4. 5.

FINANCING THE PROJECT

Interest rates during that period was unusually high at around 20% because of the imminent war at the Middle East. Construction of the Public Market will cost Php 100 million. To borrow Php 100 million at 20% interest, there is a need to annual outlay of more than Php 10 million. Instead of paying more than Php10 million annually City Government is now earning more than Php20 million annually.

BASIC FEATURES OF THE CONTRACT

The developer will provide a public market at the ground floor. The public market shall be under the Control and Supervision of the City Government. Upon completion of the public market, it was immediately turned over to the City Government. The City Government. In turn leases the building except the Public Market to the developer.

INCENTIVES GIVEN TO THE DEVELOPER

Free from paying Mayors Permit for the first two (2) years of operations of the developer and all businesses that will be established. Free from paying Real Estate for the developer for 40 years. City of Mandaluyong was assisting the developer in scouting stallholders/investors.

THE COMMERCIAL COMPLEX CONSISTS OF THE FOLLOWING:

Public Market at the ground floor. Eateries, dry goods, gift shops. Two parking levels. Four Theaters. Fast foods, Billiard Halls, Bowling Center, Multipurpose Hall.

BENEFITS DERIVED FROM USING BOT

1. 2. 3. 4. 5. 6. 7. The project provides for a Public Market. The Public Market is controlled and supervised by the City Government. Employment. Additional Income of 20 Million. A new commercial district is generated. Traffic problem is solved. Flooding, pollution and garbage problems were solved.

COORDINATING COUNCIL OF THE PHILIPPINE ASSISTANCE PROGRAM (CCPAP)

In 1998, the CCPAP cited four cases of BOT scheme in the discussion of BOT throughout the regions in the Philippines. The North and South Expressway of Malaysia. The Euro Tunnel Link Project of Europe connecting Britain and France. The Hub River Project of Pakistan. The Mandaluyong BOT. The purpose of the discussion was to enlighten LGUs in the nature, requirements, procedures, implementation and benefits of BOT and to make it workable in local level.

THE MARKETPLACE BOT WAS REPLICATED IN WHOLE PART IN THE FOLLOWING PROJECTS:
1. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Dapitan Public Market-Quezon City. Binacayan Administrative Commercial Center-Binacayan, San Jose, Antique. Pateros Commercial Center. Bocaue Public Market/Commercial Center. Marilao Public Market/Commercial Center. Ilo-Ilo City Central Public Market/Commercial Center. Bacolod City Public Market and Commercial Center. Bohol Water Supply Systems. Matnog Integrated Bus Terminal. Catarman Integrated Bus Terminal. Calamba City Multi-Purpose Center.

MAYORS AND TOP OFFICIALS OF THE FOLLOWING CITIES COUNTRIES AND ORGANIZATIONS WHO HAVE VISITED THE MARKETPLACE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Beijing, China Shanghai, China Calcutta, India Brazil Mexico Tokyo, Japan New York, USA United Nations Asia Development Bank Sri Lanka Nigeria Cambodia Bangladesh

BOT CENTER
When we drafted the BOT Contract in the year 1991, there was no single government agency that assisted us in drafting the contract. At present there is a BOT Center under the DTI that will assist LGU. 1. 2. 3. 4. 5. In negotiating with prospective investors. Formulate tender documents. Preparation of Project Studies. Comply with legal requirements. Draft the Contract.

SUGGESTIONS TO THE PPP GROUP

1. The different experience and success stories of LGUs. 2. The rules, regulations, procedure of PPP must be simplified. 3. Financial institutions should make available to the private sector. 4. Developers must be given proper incentives.