Infrastructure and Governance in Megacities

Metro Manila

Outline • Megacities of the World

• Mega Manila

– History to Present: • Private-led Development in Real Estate • Poor quality and development in Transport and Social

Infrastructure – Outlook:

• Private Participation in Infrastructure Development – Capacity of the Private Sector (Financial and Technical) – Philippine Constructors Association (PCA)

» Public-Private Partnerships (PPP) Program

Megacities of the World

PUBLIC PRIVATE

Gateway (Airport, Seaport, Roads)

Products and

Services

INFRASTRUCTURE

DEVELOPMENT

People Principles and Plans GOVERNANCE

Megacities: Framework

10 Largest Cities of the World (2011)

NEW YORK

MEXICO CITY

SAO PAULO

MUMBAI

TOKYO

MANILA

SEOUL SHANGHAI DELHI GUANGZHOU

10 Largest Cities of the World (Time Magazine, 2011)

Megacity Population (in Million)

Population

Density (population/sq.km)

GDP per Capita (USD)

Tōkyō 34.4 4,750 42,994

Guangzhou 25.4 3,417 5,630

Seoul 25.2 16,700 11,548

Shanghai 24.9 13,400 9,357

Delhi 23.5 11,050 7,106

Mumbai 23.2 29,650 9,009

Mexico City 23.0 8,400 16,957

New York 22.0 2,050 63,909

São Paulo 21.0 9,000 18,476

Manila 20.4 10,550 7,304

Megacities • Megacity: >10 million people (some consider 5-8 million inhabitants)

• Dynamics of urbanization not necessarily the same – Wealthier countries have much lower growth rates – Megacities in other regions are expected to continue growing

• Two-edged sword – Vast opportunities: Market and Income Concentration – BUT with Challenges

• High Cost of Living with Congestion and Pollution • Infrastructure AND Governance • Government AND Private Sector • Planning AND Implementation

Mega Manila

Philippines

National Income USD 170 B

Land Area 299,764 km2

Population 88M

Population Density

300/sq. km.

Per Capita Income

USD 1,850

Philippines

Metro Manila

(% of Philippines)

National Income 34%

Land Area 0.2%

Population 13%

Per Capita Income (USD)

7,304

Mega Manila

PUBLIC PRIVATE

Gateway (Airport, Seaport, Roads)

Products and

Services

INFRASTRUCTURE

DEVELOPMENT

People Principles and Plans GOVERNANCE

Megacities: Framework Case of Mega Manila

Best Practice

Average Performance Poor Record

Mega Manila: Present • Mega Manila: a collection of 17 highly-urbanized cities

• High and concentrated economic growth – Anchored on international airport and seaport, Agglomeration of

industries and markets inside

• Private sector-driven development for the last 5 years: Especially in real estate development – Residential, commercial, recreational and institutional buildings

• Infrastructure has lagged behind

– Poor quality of transport infra: rail, airport, seaports, and roads – As well as social infra: schools and hospitals

Overall Infrastructure Performance

Legend 1 = poorly developed and inefficient 7 = among the best in the world Average of 133 countries

Source: World Economic Forum, “The Global Competitiveness Report, 2009-2010

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Malaysia

Thailand

China

Indonesia

India

Vietnam

Philippines

Singapore

Hong Kong

Korea

Taiwan

Japan

Private Sector-Driven Growth (Especially Real Estate Development)

Case Study: DATEM Construction

DATEM Construction We are a private construction company in the Philippines established in 1984. We offer a wide range of services, from technical consultancy to construction of complex projects such as commercial buildings, residential structures, recreational facilities, worship centers, healthcare facilities, industrial parks, educational centers and other infrastructures. Over the past few decades DATEM has steadily grown and become a major participant in the reshaping and improvement of the landscape of the Philippines ’ major urban centers, particularly the megacity of Metro Manila.

In our projects, we put distinctive focus on value-engineering and innovation, and providing our clients with the highest quality products and services.

ONE ROCKWELL

Rockwell Drive, Rockwell Center, Makati City 2 Upscale residential condominium towers (45 and 55 storeys) with a 4-level common basement parking area, and commercial and office spaces at the Ground Floor. Total CFA: 134,102.0 sq.m. Contract Amount: Php 2,519,537,788.29 (USD 58.6M) Commencement Date : May 2008 Completion Date: October 2011 Methodology: Used the “Mevadec” formworks system (simple and fast assembly and stripping; few proppings). Used precast concrete for the stairs and ledges.

6749 Ayala Avenue, Makati City A 67-storey luxury apartment (90 residential flats of 382 to 680 sq.m. each) with 6 levels of basement parking area. It is presently under construction and it employed the “Top-Down Method of Construction”. Total CFA: 95,614.0 sq.m. Contract Amount: Php 1,373,646,512.88 (USD 32.0M) Commencement Date : July 2008 Completion Date: August 2013 Methodology: Uses the “Mevadec” formworks system. Uses structural precast concrete for the exterior walls and precast panels (Ecowall) for the interior partitions.

DISCOVERY PRIMEA

Edsa cor Shaw Boulevard, Barangay Wak-wak, Mandaluyong City A 60-storey twin-tower luxury residential condominium with 10 floors of Podium and a 2-level common basement parking area. At the Podium floors are retail and parking spaces. Total CFA: 165,000.0 sq.m. Contract Amount: Php 4,015,623,269.25 (USD 94.0M) Commencement Date : May 2010 Completion Date: April 2014 Methodology: Uses the “Mevadec” formworks system. Uses structural precast concrete for the slabs.

ONE SHANGRI-LA PLACE

Lot 1 Block 4, Fort Bonifacio, Global City, Taguig City A 45-storey residential building with 5 basements. The project is aiming for a LEED Certification of Gold. Total CFA: 64,743.20 sq.m. Contract Amount: Php 1,018,000,000.00 (USD 23.6M) Commencement Date : January 2011 Completion Date: June 2013 Methodology: Uses structural precast concrete for the exterior walls.

ARYA RESIDENCE

Fort Bonifacio, Taguig City The Philippines’ first world-class Science Museum. It has 3 levels of display/exhibit area and training and learning center. Total CFA: 7,595.0 sq.m. Contract Amount: Php 316,360,815.36 (USD 30.6M) Commencement Date : September 2010 Completion Date: December 2011

THE MIND MUSEUM

Shaw Boulevard, Mandaluyong City A 43-storey residential building with 3 floors of commercial spaces and 5 basement levels of parking area. Its amenities include state-of-the-art fiber optics and wireless backbone that will allow the residents to enjoy a host of smart building technologies and conveniences. Total CFA: 68,743.20 sq.m. Contract Amount: Php 1,100,523,828.30 (USD 25.6M) Commencement Date : December 2010 Completion Date: April 2014

TWIN OAKS PLACE

Ortigas Center, Pasig City A 48-level hotel and office building with 6 basements. Total CFA: - 80,000 sq.m. Contract Amount: Php 489,160,216.64 (USD 11.30M) Commencement Date : July 2007 Completion Date: January 2009 Methodology: Used structural precast concrete for the slabs and beams.

JOY NOSTALG CENTER

Topaz Road, Ortigas Center, Pasig City A 45-storey residential Condominium with 2 basements. It has commercial spaces as well as amenities for residents (swimming pool and gymnasium) at the Ground Floor. Total CFA: 35,186.00 sq.m. Contract Amount: Php 422,421,847.72 (USD 9.80M) Commencement Date : November 2008 Completion Date: April 2010 Methodology: Used structural precast concrete for the exterior walls, slabs and ledges

EAST OF GALLERIA

E. Rodriguez Jr. Avenue , Libis, Quezon City A 33-storey office building with 5 basement levels. A revolving restaurant sits on its topmost floor. Total CFA: 103,210.0 sq.m. Contract Amount: Php 745,966,011.81 (USD 17.0M) Commencement Date : February 2009 Completion Date: March 2011 Used structural precast concrete for the slabs.

MDC 100

Pioneer Street cor. Robinson Road, Mandaluyong

City

A 33-storey residential Condominium with 2

basements.

It consist of 331 residential units.

Total CFA: 43,515.00 sq.m.

Contract Amount: Php 399,300,000.00 (USD 9.3M)

Commencement Date : June 2010

Completion Date: July 2012

GATEWAY RESIDENCE

Mega Manila: Outlook Towards a More Balanced Development

• Private sector is pushing for infra development – Local banks have CASH: USD 43.5 B net savings (>20% of

GDP) – Local contractors have technical capacity at cheaper (<30-50%)

cost

• Developmental Governance – Initiatives of Philippine Constructors Association (PCA)

• PPP Coalition • Construction Industry Authority of the Philippines • Improvement of Education for Construction Professionals

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5,00

10,00

15,00

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30,00

35,00

40,00

1982q1 1984q1 1986q1 1988q1 1990q1 1992q1 1994q1 1996q1 1998q1 2000q1 2002q1 2004q1 2006q1 2008q1 2010q1

Excess Liquidity in the Economy

Savings

Investment

Source: Raw data from NSCB

Kept at Central Bank

Unutilized Money in Philippine Central Bank’s Vault

Source: Bangko Sentral ng Pilipinas

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

2007 2008 2009 2010 2011

US

D M

SDA

RRP

Total of 43.5 B USD

Philippine Contractors’ Technical Capacity

• Urban Spaces and Development • Transportation and Telecommunications • Engineering and Industrial Infrastructure • Institutional Buildings

Urban Spaces and Development

Case Study: DATEM Construction

TOP-DOWN CONSTRUCTION

DISCOVERY PRIMEA SUITES

PROJECT MAKATI CITY, PHILIPPINES

DISCOVERY PRIMEA SUITES IS A 67-STOREY RESIDENTIAL BUILDING WITH 6 BASEMENTS. CONSTRUCTION WAS STARTED IN SEPTEMBER 21, 2009 AND WILL BE COMPLETED ON DECEMBER 28, 2013.

TOP-DOWN CONSTRUCTION

DISCOVERY PRIMEA SUITES

AYALA AVENUE, MAKATI CITY, PHILIPPINES

DISCOVERY PRIMEA SUITES IS ADJACENT TO AN EXISTING 28-LEVEL RESIDENTIAL BUILDING, “THE MAKATI TUSCANY”

DISCOVERY PRIMEA

SUITES

THE MAKATI TUSCANY

BUILDING

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Transportation and Telecommunications

(Local Contractors’ Projects)

Engineering and Industrial Infrastructure

(Local Contractors’ Projects)

Institutional Buildings (Local Contractors’ Projects)

Philippine Constructors Association

Private Sector-Led Infrastructure Development Initiatives

Philippine Constructors Association

A trade organization composed of licensed construction contractors, construction materials, equipment and service providers and other trade organizations allied to the construction industry.

PCA members handle an average of 80% of the annual construction turnover of the Philippines. Recognized as the “voice of the construction industry”, among the PCA’s advocacies are:

– Construction safety – Manpower training and development – The creation of a level playing field in the construction arena, especially in dealing with

foreign contractors.

The PCA is also represented in a number of government bodies tasked with policy formulation and implementation. It is the founder of the International Federation of Asian and Western Pacific Contractors’ Association (IFAWPCA) and a regular member of the ASEAN Constructors Federation (ACF) and the Confederation of International Constructors Association (CICA).

PCA Development Projects

• Crafted the Construction Industry Roadmap that included three pillars for development.

• Current implementation of the three pillars

The Three Pillars of the Construction Industry Roadmap

1. The Strengthening of the

Construction Industry Authority of the Philippines (CIAP); and

2. The Enhancement of Education of Construction Professionals and Upgrading of Skills Standards of Construction Workers

3. The Promotion of PPP as the main engine for infrastructure development in the country;

Construction Industry Authority of the Philippines (CIAP)

• primary task to promote, accelerate, and regulate the growth and development of the construction industry in conformity with national goals

• To strengthen: – must be lead by competent and industry-immersed

officers – Restructure towards a common vision, realigning the

vision of each board to match with the overall vision of CIAP

• Reviewing and clarifying the functions of the different construction regulatory bodies

Enhancement of Education of Construction Professionals and Upgrading of Skills Standards of

Construction Workers

• Devise learning programs and offer financial assistance for education.

• Enhance elementary and secondary education • Develop and implement a globally competitive and

internationally recognized engineering curriculum, in concurrence with the ongoing application for Philippine membership to the Washington Accord

• Strengthen industry-academe linkages

• Revitalize the Construction Manpower Development

Foundation (CMDF) as a pilot center for trainers’ training.

PPP Coalition • PPP Coalition consists of

private sector associations

committed to:

– the promotion of BOT/PPP

Framework in infrastructure development

– assist the Government in promoting good governance through an open,

transparent and competitive

process for PPPs

– assist the Government in jumpstarting few PPP Infra

Projects

– assist the Government in pushing for policy reforms

PPP Coalition Members Left to Right: REID President Enrico Basilio; PCA

President Levy Espiritu; PCA Foundation President Roger Murga; BAP President Gigi Montinola; IHAP President

Raul Leopando

PCA Foundation

“If we are truly interested in a square deal for all, then what we shake hands

on, should be what endures. To this end, what we will be doing in so far as

solicited projects are concerned, is to minimize your risk in a meaningful

and fair manner.”

President Aquino

“For PPP projects, the government will focus on the solicited mode. Priority

projects identified in the MTPDP/MTPIP and CIIP will undergo the solicited

mode and will be processed within 6 months.”

Press statement of Socio-Economic Planning Secretary Paderanga

Promotion of Open, Transparent and Competitive Process

Light Rails

• LRT Line 2 Ext • LRT 1 South Extension

School

Classrooms • Nationwide coverage • Pilot in 3 regions

PPP PROJECTS FOR 2012 ROLL-OUT

Airports

• Clark BT • New Legaspi (Daraga) • Puerto Princesa • New Bohol Airport • Laguindingan

Toll Roads

• NLEX-SLEX Connector • NAIA Expressway 2 • Daang Hari- SLEX Link • CALA Expressway

Conclusion • Megacities are the future of the world.

• Balanced development of infrastructure and governance must

be emphasized to ensure inclusive and sustainable growth.

• Our case in Mega Manila demonstrated the possibility of a private sector-led development

• The private sector associations (e.g. PCA) have a role in supporting their government agencies in their developmental and regulatory functions. – Strengthening the industry authority – Public-Private Partnership (PPP) Program in infrastructure

development

Annex

• Details on Infrastructure Performance • Details of the PPP Initiatives