NAIAX Information Memorandum 2012 - Final - July 31 2012

Republic of the Philippines DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS
NAIA EXPRESSWAY PROJECT

Information Memorandum
July 2012
Transaction Advisors
With Assistance From
DPWH NAIA Expressway Project: Information Memorandum
July 2012
DISCLAIMER
This Information Memorandum (IM) has been prepared by the Development Bank of the Philippines (DBP) and the International Finance Corporation (IFC) on behalf of their client, the Department of Public Works and Highways (DPWH), in line with their mandate as Transaction Advisors to the DPWH in the development, structuring and tendering of the NAIA Expressway Project as a Solicited Transaction under the Philippine Build-Operate-Transfer (BOT) Law (or RA 6957 as amended by RA 7718). This IM does not purport to be all-inclusive or to contain all of the information that a prospective participant may consider material or desirable in making its decision to participate in the tender. No representation or warranty, express or implied, is made, or responsibility of any kind is or will be accepted by the DBP, IFC, the DPWH, or the Republic of the Philippines (ROP) or any of its agencies or advisors, with respect to the accuracy and completeness of this information memorandum. The DPWH or the DBP/IFC may amend or replace any of the information contained in this booklet at any time, without giving any prior notice or providing any reason. In furnishing this IM, the DBP, IFC, the DPWH, or the ROP or any of its agencies undertakes no obligation to provide recipients with access to any additional information, or to update, or to correct any inaccuracies which may become apparent in this IM or any other information made available in connection with the Project. Additional information shall be provided at appropriate times during the formal tender process. No person has been authorized to give any information or make any representation not contained in this IM and, if given or made, any such information or representation may not be relied upon as having been authorized by DBP, IFC, the DPWH, or the ROP or any of its agencies. THIS MEMORANDUM DOES NOT CONSTITUTE A SOLICITATION OF BIDS FOR ANY ASPECT OF THE NAIA EXPRESSWAY PROJECT. SOLICITATIONS OF BIDS AND BIDDING GUIDELINES WILL BE DISTRIBUTED SEPARATELY.
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ACRONYMS
BOT BTO CED DBP DED DENR DOF DPWH DTI EO ICC IFC IRR ITB JICA NAIA NEDA PAGCOR PPP RA RFP ROP ROW SBAC TCA TOC TRB VOT Build-Operate-Transfer Build-Transfer-Operate Conceptual Engineering Design Development Bank of the Philippines Detailed Engineering Design Department of Environment and Natural Resources Department of Finance Department of Public Works and Highways Department of Trade and Industry Executive Order Investment Coordination Committee International Finance Corporation Implementing Rules and Regulations Instructions to Bidders Japan International Cooperation Agency Ninoy Aquino International Airport National Economic and Development Authority Philippine Amusement and Gaming Corporation Public-Private Partnership Republic Act Request for Proposals Republic of the Philippines Right-of-Way DPWH Special Pre-Qualification, Bids and Awards Committee Toll Concession Agreement Toll Operation Certificate Toll Regulatory Board Value-of-Time
UNITS
Km AADT Kilometer Average annual daily traffic
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CONTENTS
I. II. Introduction ..................................................................................................................... 3 Project Description .......................................................................................................... 4 A. Type of Toll System ............................................................................................. 8 B. Traffic Management ............................................................................................. 9 C. Project Standards and Specifications................................................................. 10 Minimum Performance Standards and Specifications ........................................ 10 Scope of Design ................................................................................................ 11 Outputs of the Detailed Engineering Design by the Concessionaire .................. 11 D. Construction Cost .............................................................................................. 12 Project Implementing Agency ........................................................................................ 13 Traffic Analysis .............................................................................................................. 15 Right-of-Way and Resettlement .................................................................................... 20 A. Right-of-Way (ROW) Acquisition........................................................................ 20 B. Resettlement of Informal Settlers and the Resettlement Action Plan ................. 20 Concession Structure .................................................................................................... 21 A. Legal Framework for Concession ...................................................................... 21 B. Project Structure ................................................................................................ 21 Key Commercial Features of the Draft TCA .................................................................. 22 Procurement Process .................................................................................................... 25 A. Legal Basis of Procurement ............................................................................... 25 B. Outline of the Bidding Process ........................................................................... 25 Pre-Qualification ................................................................................................ 25 Preparation of Bid Proposals ............................................................................. 25 Pre-Bid Conference ........................................................................................... 26 Submission of Bid Proposals ............................................................................. 26 Bid Evaluation and Post Qualification ................................................................ 26 Awarding of Bidder and Issuance of Notice of Award ......................................... 27 Signing of Concession Agreement ..................................................................... 27 C. Information Available to Bidders ........................................................................ 27 Investment Framework .................................................................................................. 28 A. Taxation............................................................................................................. 28 Corporate Tax.................................................................................................... 28 Income Tax ........................................................................................................ 29 Value-Added Tax (VAT) ..................................................................................... 29 Tax Treaties....................................................................................................... 30 Tax Incentives ................................................................................................... 31 Local Tax ........................................................................................................... 31 B. Foreign Exchange.............................................................................................. 32 C. Foreign Ownership and Management ................................................................ 33 Regulatory Framework .................................................................................................. 34 A. National Economic and Development Authority ................................................. 34 B. Toll Regulatory Board ........................................................................................ 34 The Philippine Toll Road System................................................................................... 35 Ninoy Aquino International Airport ................................................................................. 39 PAGCOR Entertainment City ........................................................................................ 42 Indicative Timetable ...................................................................................................... 44
III. IV. V.
VI.
VII. VIII.
IX.
X.
XI. XII. XIII. XIV.
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LIST OF TABLES
Table 1: NAIA Expressway Project Description ............................................................................... 7 Table 2: Vehicle Class and Toll Rate Multiplier ............................................................................... 9 Table 3: Number of Traffic Lanes of At-Grade Roads ..................................................................... 9 Table 4: Risk Allocation Matrix ...................................................................................................... 24 Table 5: Corporate Income Taxation ............................................................................................. 28 Table 6: Individual Taxation .......................................................................................................... 29 Table 7: Effective Philippine Tax Treaties ..................................................................................... 30 Table 8: Amount of Tax Per Annum .............................................................................................. 32 Table 9: Other Transport Costs in Manila...................................................................................... 35 Table 10: Philippine Toll Road System Toll Rate (2011 Pesos per Km) ........................................ 36 Table 11: High Standard Highway Master Plan 200km Sphere of Metro Manila ......................... 38 Table 12: Passenger Traffic at the Ninoy Aquino International Airport (1994-2010) ...................... 39 Table 13: Passengers at NAIA, DMIA and the Region (2002-2010) .............................................. 41
LIST OF FIGURES
Figure 1: NAIA Expressway Road Alignment .................................................................................. 5 Figure 2: At-Grade Entertainment City Works Road General Layout Plan....................................... 6 Figure 3: Traffic Volumes on Roads Surrounding NAIA ................................................................ 16 Figure 4: Hourly Variation of Traffic In NAIA Expressway Study Area (Weekdays) ....................... 17 Figure 5: Traffic Composition at the NAIA Terminal Main Gates ................................................... 18 Figure 6: Travel Speed from Roxas Blvd. to Skyway Expressway (From 5 to 6pm) ...................... 19 Figure 7: High Standard Highway Master Plan ............................................................................. 37 Figure 8: Total A/D Passengers at NAIA (1994-2010) ................................................................... 40 Figure 9: Aerial Shot of Entertainment City ................................................................................... 43
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PART I. EXECUTIVE SUMMARY: INVESTOR HIGHLIGHTS

The implementation of the NAIA Expressway Project (the Project) under an open international competitive bidding process represents an excellent opportunity to invest in a toll road concession in the Philippines. The Project, sponsored by the Department of Public Works and Highways (DPWH), is one of the priority projects of the Republic of the Philippines (ROP) under its Public-Private Partnership (PPP) Program launched by President Benigno Aquino III in November 2010. Under the 2011-2016 Philippine Development Plan, massive infrastructure investments are deemed urgently needed over the medium-term in order for the Philippines to achieve its development targets of sustained and inclusive growth; and PPP is identified as the centerpiece strategy for mobilizing these investments. The Project, one of the strategic component of the Metro Manila Urban Expressway System that envisions the establishment of a network of high-standard expressways serving Metro Manila, would facilitate the efficient flow of traffic to and from the countrys premier international and domestic airport (the Ninoy Aquino International Airport (NAIA) Complex), link two major expressways serving as the north-south backbone of the eastern and western sections of Metro Manila, and support the development of the PAGCOR Entertainment City located along the Manila Bay reclamation area. The key highlights of this investment opportunity are as follows:
Robust Legal and Regulatory Framework The Philippine Constitution recognizes the critical role of the private sector as the governments main partner in development. This recognition was further reinforced with the landmark passage of Republic Act No. 6957, otherwise known as the Philippine BuildOperate-Transfer (BOT) Law in 1990, which is the first of its kind in Asia, that declared the indispensable role of the private sector as the main engine for national growth and development and provided a stable framework for private sector involvement in the financing, construction, operation and maintenance of infrastructure and development projects. The BOT Law opened to private sector participation various infrastructure sectors and defined contractual arrangements under which such participation may be undertaken. The BOT Law was amended in 1994, further expanding the allowed contractual variants, strengthening the process for government approvals, allowing private sector initiatives through the unsolicited track and prescribing additional incentivizes for projects undertaken through this legal framework. To date, over US$45 billion investments have been mobilized under the BOT Law covering some 70 infrastructure projects. Government Support The ROP, represented by DPWH, will be the direct counterparty in the Toll Concession Agreement (TCA) to be implemented under the Philippine BOT Law (Republic Act (RA) 6957 as amended by RA 7718).
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The Government will provide the Right-of-Way (ROW) required for the Project by a preagreed timeline, which will be specified in the TCA. The Government is facilitating the arrangement of debt financing on concessional terms from a reputable financing institution of up to Php6.5 billion. This debt facility the Infrastructure Support Facility (ISF) will be made available to the winning bidder. The terms of this debt facility will be circulated to Pre-Qualified Bidders separately once these are firmed up and finalized. The amount to be availed under the ISF shall be the criteria for the financial proposal.
Competitive and transparent pre-qualification and bidding process The Project will be procured strictly following the rules and procedures of the BOT Law and its Implementing Rules and Regulations, which adhere to the principles of competition, transparency, and a leveled playing field, and will therefore be fair and open to all interested parties. The bid process is expected to take approximately seven (7) months from the publication of the Invitation to Pre-Qualify to Bid to the signing of the Toll Concession Agreement. Prospective Bidders are given around three (3) months from the Notice of Pre-Qualification to the Bid Submission Date to provide them sufficient time to conduct due diligence, review and comment on the transaction documents, and meet with DPWH representatives. A data room will be set up by DPWH to aid the conduct of such due diligence.
Pre-defined requirement and process for TOC issuance, and a toll rate structure that promotes bankability The complete requirements and process for the issuance of the Toll Operation Certificate (TOC) by the Toll Regulatory Board (TRB) will be provided to bidders and incorporated in the TCA. Upon compliance with these requirements, DPWH will ensure the issuance by the TRB of the TOC to the Concessionaire or its duly appointed Facility Operator within a prescribed period to be stipulated in the TCA. The Project will have a toll rate structure that is affordable and competitive, with levels set that are comparable with those charged in existing toll roads serving Metro Manila. A toll adjustment formula will be prescribed in the TCA and its application over the concession period will be guaranteed by the DPWH. Environment and Social Considerations The project will comply with environmental standards and safeguards required by local laws as well as international standards required by multilateral and bilateral financing institutions.
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PART II. THE NAIA EXPRESSWAY PROJECT

I. INTRODUCTION
The Philippine government launched in November 2010 an aggressive program for PPPs in order to develop much needed infrastructure that would support its objectives of sustained and inclusive economic growth. The NAIA Expressway is among the governments priority PPP to be implemented under the BOT Law through the solicited mode (the Transaction). The Project was approved by the NEDA Board on 30 May 2012. In preparation for the competitive tender, the DPWH availed of the support of the Japan International Cooperation Agency (JICA) to review and update the feasibility study for the Project conducted by by Filipinas Dravo in association with Philipps Technical Consultants Corporation in 2008/2009. Furthermore, DPWH engaged the services of the Development Bank of the Philippines (DBP) with the International Finance Corporation (IFC), an affiliate of the World Bank, to act as Lead Transaction Advisors in developing, structuring the PPP transaction, preparing the tender documents, and assisting DPWH in the conduct of the competitive tender process for the Project. IFC in turn has hired specialized consultants for this project to support the work of the Advisors: expressway technical specialists (LeighFisher), international legal consultants (Hogan Lovells Lee & Lee, Singapore), and local lawyers. The Philippine Public-Private Partnership Center (PPP Center), under the National Economic and Development Authority (NEDA), is also assisting the DPWH and its advisors in the preparation and implementation of the tender for the Project. The PPP Center was formerly known as the Build-Operate-Transfer Center (BOT Center) attached to the Department of Trade and Industry (DTI). Executive Order No. 8 series of 2010 signed in September 9, 2010 renamed and reorganized the BOT Center into the PPP Center and transferred it to NEDA to efficiently and effectively implement the Medium-Term Philippine Development Plan by facilitating the coordination and monitoring of the PPP programs and projects of the Government.
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II. PROJECT DESCRIPTION

With the existing NAIA Terminals nearing capacity, the Republic of the Philippines sought to address this problem by constructing the NAIA Terminal 3 in the early 2000s to promote investments and tourism in the country. Furthermore, with the sale and commercialization of a portion of the Villamor Airbase and the planned development of the reclamation area along Manila Bay, increased economic activity in these areas are expected to drive up usage of the existing road network around the airport. Thus, the NAIA Expressway was conceived to provide fast and reliable access to the three NAIA Terminals and connect the South Luzon Expressway/Skyway with the Manila-Cavite Toll Expressway/Roxas Boulevard, the gateway to the rising PAGCOR Entertainment City complex (Entertainment City). Broadly, the objectives of the project are as follows: to provide quicker access between all three NAIA Terminals to Roxas Boulevard, Macapagal Boulevard, and the Entertainment City complex. To reduce traffic congestion of roads in the vicinity of the NAIA Terminals; To improve international/domestic investment environment for faster economic development; and To support the development of Entertainment City as a prime tourism destination.
The NAIA Expressway is composed of two phases. Construction of Phase I of the NAIA Expressway and its related roads project started in 2003 and was completed in 2010. The NAIA Expressway Phase I is a fully elevated expressway that runs from the Metro Manila Skyway to Sales Road near NAIA Terminal 3 with on and down ramps beside the Resorts World complex. In order to ensure the safety and interest of the public, an Interim Operation Agreement covering Phase I was entered into by the DPWH, the TRB and the Skyway O&M Corporation (SOMCO) last 28 October 2011. The Interim Operation Agreement shall expire the day after the issuance by the TRB of the Toll Operation Certificate for the whole NAIA Expressway (Phase I and II).

FIGURE 1: NAIA Expressway Road Alignment
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The Project is composed of the following components: Phase I Adjustment Works: Adjustments to the 0.6 km Phase I viaduct, starting from Skyway Stage 1 at km 0+810 to km 1+398.27 including ramps, to achieve operations and maintenance standards comparable with standards to be set for Phase II that would enable seamless operations. Phase II Works: Design and construction of approximately 4.83 km 4-lane viaduct extension from the existing Phase I near NAIA Terminal 3 to Roxas Boulevard and Diosdado Macapagal Boulevard, over the existing roads of Sales Road, Andrews Avenue, Domestic Airport Road and NAIA Road. Design and construction of Minimum of 6 on and 6 off ramps to Terminals 1, 2 and 3 and other strategic locations. Design and construction of two connection ramps to link Roxas Boulevard, Macapagal Boulevard and Entertainment City on-off ramps to and from Terminals 1 and 2 on-off ramps. Design, construction and 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.
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Reconstruction and widening of affected at-grade public roads (Sales Road, Andrews Ave., Domestic Airport Road, and NAIA Road) due to Phase II construction; these roads shall remain public and maintenance thereof shall be the responsibility of Government. At-Grade Entertainment City Works:
Construction of approximately 2.22 km 6 to 8-lane at-grade roads and a 300 meter 2-lane service road within the Entertainment City, and a 4-lane access road connecting New Seaside Drive to Macapagal Boulevard, based on the detailed design specifications to be provided; the maintenance and operations of this section shall be turned over to the Government upon completion.
FIGURE 2: At-Grade Entertainment City Works Road General Layout Plan
Source: Entertainment City Manila, Master Development Plan Updating, Edwin E. Aguiling + Associates
DPWH NAIA Expressway Project: Information Memorandum Operations and Maintenance:
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Operation and Maintenance of the entire NAIA Expressway (Phase I and Phase II, but not including the At-Grade Entertainment City Works) as a tolled expressway.
The Project description is summarized the following Table.

TABLE 1: NAIA Expressway Project Description Elements Approximate Characteristics
Phase I (existing, for adjustments) Phase II - Main Expressway, four-lane - 12 Ramps, 6.34 km single-lane equivalent to four-lane Total Length (Phase I & II) No. of Lanes (Phase 1 & II) Ramps At-Grade Entertainment City Works - New Seaside Drive - Bay Boulevard - access road - service road Total Length (At-Grade Works) No. of Lanes (At-Grade Works) - New Seaside Drive - Bay Boulevard - access road - service road Concession period Construction period Preparation of the Detailed Engineering Design
0.6 km 4.83 kms 2.32 kms 7.75 kms 4 lanes (2-lane x 2-direction); 1 lane for ramps 6 on-ramps, 6 off-ramps, 2 connection ramps 0.72 kms 1.0km 0.5km 0.3km 2.52 kms 6 lanes (3-lane x 2-direction) 8 lanes (4-lane x 2-direction) 4 lanes (2-lane x 2-direction) 2 lanes (1-lane x 2-direction) 30 years Approximately 2 years Approximately 10 months; partial delivery and approval allowed At-Grade Entertainment City Works turnover by Dec.2013; Partial operations by April 2015 (Terminals 1 and 2 to/from Roxas Blvd. / Macapagal Blvd. / Entertainment City); Full operations by 2016
Operation start year
The six new on-ramps, six new off-ramps and one existing off-ramp shall be provided as follows: One on-ramp for NAIA Terminal 3 exit traffic and one existing off-ramp from Skyway for access to NAIA Terminal 3; One off-ramp for traffic from Paranaque bound for Terminal 3;
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One on-ramp along Andrews Ave. to collect traffic from NAIA Terminal 3 and Andrews Ave; One off-ramp access to NAIA Terminal 1; One off-ramp access to NAIA Terminal 2; One on-ramp to collect traffic from NAIA Terminal 1 and Terminal 2; One on-ramp and one off-ramp from/to Roxas Boulevard towards the Manila-Cavite Coastal Expressway; One on-ramp and one off-ramp at Macapagal Boulevard towards Manila; and One on-ramp and one off-ramp at Entertainment City.
Two connection ramps will also be constructed to link Roxas Boulevard, Macapagal Boulevard and Entertainment City on-off ramps to and from Terminals 1 and 2 on-off ramps. Furthermore, one existing on-ramp (entry to the Skyway) of Phase I should be removed. Should the Concessionaire propose to provide any additional on and off ramps, aside for the minimum of twelve ramps in the abovementioned locations, the Concessionaire shall bear the costs of construction, operation and maintenance thereof, as well as the cost of the additional right-of-way needed. The number of traffic lanes of the main expressway shall be four (4) lanes (2-lane x 2directions) meanwhile the number of traffic lanes of all ramps shall be one (1). Upon issuance of the Toll Operation Certificate for the NAIA Expressway, the TRB may then require the Concessionaire to enter into interconnection agreements with the Skyway operator for connection with the Skyway and with the Cavite Expressway operator for connection with the Cavite Expressway. These agreements are necessary for the seamless integration of these expressway systems.
A. TYPE OF TOLL SYSTEM

The "open toll system" shall be used in which motorists pay the following flat toll rate: a) Short-segment Rate - a fixed toll rate for the appropriate vehicle class, for motorists travelling on the NAIA Expressway between: i. the Skyway and NAIA Terminal 3; and ii. NAIA Terminals 1 and 2 and Roxas Boulevard/Macapagal Boulevard/Entertainment City. b) Full-route Rate - a fixed toll rate for the appropriate vehicle class, for motorists travelling on the NAIA Expressway, other than those covered above. The proposed toll rate is tentatively set at: Full-route Rate: Php45.00 (inclusive of VAT) Short-segment Rate: Php35.00 (inclusive of VAT) The following table shows the toll rate multiplier to be applied per vehicle class on the fixed toll rate described above.

TABLE 2: Vehicle Class and Toll Rate Multiplier
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Vehicle Class Class I: Class II: Light Vehicles - Car, Jeep, Passenger Van/ Pickup, Taxi, Mega-Taxi, Jeepney, Mini-Bus Medium Weight Vehicles - Aircon& Non Aircon Bus, Goods Van/Pickup, 2-Axle Truck, Dump Truck, Tanker, Mixer
Toll Rate Multiplier 1.0x
2.0x
Class III: Heavy Vehicles Rigid Truck with 3 or more Axles, Trailer (Articulated)
3.0x
Currently, to ensure the proper upkeep of NAIA Expressway Phase I, TRB has granted an Interim Operations Agreement to SOMCO to operate and maintain the facility, including the collection of tolls (Php20/vehicle) until the issuance of the Toll Operation Certificate for the NAIA Expressway by the TRB to the Concessionare.
B. TRAFFIC MANAGEMENT
To ensure the continuous use of the existing roads and to minimize the impact of traffic during the construction of NAIA Expressway on traffic, during construction, at-grade roads will be required to be opened at all time with the following number of operable lanes:
TABLE 3: Number of Traffic Lanes of At-Grade Roads At-grade Road Existing No. of Traffic Lanes East Bound Sales Road West Bound Andrews Avenue (Sales Ave Roundabout) Andrews Avenue (Roundabout Domestic Rd) Domestic Road South Bound NAIA (MIA) Road (Domestic Rd Quirino Ave) NAIA (MIA) Road (Quirino Ave Roxas Blvd) East Bound West Bound East Bound West Bound 3 4 4 4 3 2 2 2 2 2 3 4 4 4 3 East Bound West Bound East Bound West Bound North Bound 3 (Under off-ramp) 2 (Under off-ramp) 3-4 3 3 3 3 2 3 3 3 3 2 3 3-4 3 3 3 3 3 (Before on-ramp) 2 (After on-ramp) No. of Traffic Lanes During Construction 2 No. of Traffic Lanes After Construction 3

Diosdado Macapagal Blvd. North Bound South Bound 4 4 2 2 4 4
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A detailed traffic management plan will be required as part of the Technical Proposal to be submitted by the Bidders for the evaluation and approval of DPWH.
C. PROJECT STANDARDS AND SPECIFICATIONS

MINIMUM PERFORMANCE STANDARDS AND SPECIFICATIONS
Ramp Layout Six on-ramps and six off-ramps shall be provided. The one existing on-ramp of Phase I is to be removed. An emergency exit for overloaded trucks shall be provided for Skyway-bound traffic after the weighbridge. The existing toll plaza (A) under Phase I near the Skyway should be maintained.
Number of Lanes For the main expressway, the number of traffic lanes shall be four (4). The number of traffic lanes of each ramp shall be at least one (1). For the At-Grade Entertainment City Works, the following shall be the number of traffic lanes: six-lane New Seaside Drive eight-lane Bay Boulevard four-lane access road two-lane service road
Vertical Clearance The desirable vertical clearance for the expressway and at-grade roads shall be 5.00 m. The absolute minimum vertical clearance is 4.88 m applicable to the section controlled by the NAIA Navigational Height Limitations.
NAIA Navigational Height Limitations The NAIA Expressway Project shall comply with the Maximum Allowable Top Elevation (MATE) or Height Limitation at critical points of the Project stated in the letter dated May 30, 2011 of the Civil Aviation Authority of the Philippines (CAAP).
Basic Right-of-Way
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The Maps of the Basic Right of Way, to be delivered by the DPWH, corresponding to the Minimum Configuration described above are given in the MPSS. The Concessionaire may locate the Expressway center line within the Basic Right of Way.
Environmental Compliance Certificate (ECC) Requirements The requirements of the ECC/s for the Project shall be complied with. The Environmental Management Bureau (EMB), DENR, in a letter dated 17 June 2011, informed the DPWH that the ECC, which covers both Phases I and II, is still valid. The ECC for the at-grade roads within Entertainment City was issued on [*] which also covers other developments within Entertainment City.
Indicative Minimum Requirements for Phase I Adjustments Works These consist of the replacement of longitudinal expansion joints between the Skyway and Phase I, replacement of expansion joints between spans of Phase I, repair of 10% of the pavement, and miscellaneous repairs.
SCOPE OF DESIGN
The Concessionaire shall prepare the Detailed Engineering Design (DED) covering the construction of the Phase II Works, and the Phase I Adjustment Works, and submit it for review and certification by the Independent Consultant. The Concessionaire shall prepare the DED (a) based on its Conceptual Engineering Design (CED) submitted in the Technical Proposal, and (b) in accordance with the MPSS. The certified DED, together with the MPSS for Construction, shall govern the Phase I Construction and the Phase I Adjustment Works.
OUTPUTS OF THE DETAILED ENGINEERING DESIGN BY THE CONCESSIONAIRE

a) Changes to the At-Grade Entertainment City Works DED, if any. b) Phase II Works DED: 1. Detailed design of expressway, on and off ramps, Phase I-II interconnection, atgrade roads, and appurtenant structures, including plans, profiles and crosssections; 2. Detailed design of viaduct structures, including substructure and superstructure; 3. Detailed design of toll facilities, including toll plazas and tolling systems/equipment; and 4. Detailed design of expressway traffic safety devices, including signage. c) Phase I Adjustment Works DED.
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DPWH NAIA Expressway Project: Information Memorandum d) Plans, elevations, and typical cross-sections.
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e) Supporting data for a), b), and c) above, including topographic, geotechnical, and hydrologic, geometric and pavement design reports, structural analysis and calculations, detailed specifications of materials, safety audit, and value engineering. f) Updated/detailed Construction Plan, including Schedule, including milestones, and Scurve, and Traffic Management Plan.
D. CONSTRUCTION COST
The construction cost was estimated based on several factors, as follows: a) Unit price was used for similar ROP and BOT projects implemented or tendered from 2010-2011; and b) Procedures and composition for the derivation of base construction cost, used in similar projects. The civil works cost was divided into four components: a) General requirement such as facilities for the engineer, construction health & safety requirements, activities relating to mobilisation and demobilization, implementation of environmental monitoring and traffic management plans during construction b) Expressway Ramp and Viaduct; c) Construction of At-Grade Entertainment City Works; and d) Toll Plaza. The estimated civil works cost for NAIA Expressway is approximately Php11 billion. This does not include any contingencies or consultancy costs nor does it include costs related to financing or insurance.
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III. PROJECT IMPLEMENTING AGENCY

The Project is being implemented by DPWH, a department of the executive branch of Government. It is the engineering and construction arm of the Government. DPWH is primarily responsible for the planning, classification, design, construction, operation, maintenance, and supervision of all public works and infrastructure facilities, particularly national roads and highways. Its specific legal mandate in relation to national roads and highways is set out in its charter, Executive Order (EO) No. 124 as amended under Book IV, Title V, Chapter 1, Section 3 of EO 292 or the Administrative Code of 1987 as follows: a) Provide technical services for the planning, design, construction, maintenance, or operation of infrastructure facilities; b) Develop and implement effective codes, standards, and reasonable guidelines to ensure the safety of all public and private structures in the country and assure efficiency and proper quality in the construction of public works; c) Ascertain that all public works plans and project implementation designs are consistent with current standards and guidelines; d) Identify, plan, secure funding for, program, design, construct or undertake prequalification, bidding, and award of contracts of public works projects with the exception only of specialized projects undertaken by Government corporate entities with established technical capability and as directed by the President of the Philippines or as provided by law; e) Provide the works supervision function for all public works constructions and ensure that actual construction is done in accordance with approved government plans and specifications; f) Assist other agencies, including the local governments, in determining the most suitable entity to undertake the actual construction of public works projects;
g) Maintain or cause to be maintained all highways, flood control, and other public works throughout the country except those that are the responsibility of other agencies as directed by the President of the Philippines or as provided by law; h) Provide an integrated planning for highways, flood control and water resource development systems, and other public works; i) Classify road and highways into national, regional, provincial, city, municipal, and barangay roads and highways, based on objective criteria it shall adopt; provide or authorize the conversion of roads and highways from one category to another; Delegate, to any agency it determines to have the adequate technical capability, any of the foregoing powers and functions; and,
j)
k) Perform such other functions as may be provided by law.
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In addition to its charter, EO 686, which was issued in 2007, provides that the DPWH also has the powers to: a. Determine the kind, type and nature of roads and highways; b. Enter into construction, operation and maintenance contracts for roads and highways; and, c. Condemn private property for roads and highways.
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IV. TRAFFIC ANALYSIS

A JICA study team was commissioned by DPWH to conduct a traffic study for NAIA Expressway. The traffic estimation was based on a network traffic model developed using the JICA STRADA software, including all steps of the travel model calibration and demand forecasting. The results of this traffic study will be provided to bidders. Base year for the model is 2010 and Annual Average Daily Traffic (AADT) values were derived from observed data extrapolated from the following two documents: Feasibility study completed in February 2010 by Filipinas Dravo Corporation in association with Philipps Technical Consultants Corporation on behalf of the Ministry of Economy & Trade, Government of Japan and the Economic Research Institute for ASEAN and East Asia; and JICA Study on Airport Strategy for Greater Capital Region (January 2011).
Traffic volumes (expressed as AADT) on roads surrounding NAIA are discussed below: As seen in the Figure below, there is a high number of vehicles in the corridor where the future expressway will run 48,373 on Sales Road, 65,229 on Andrews Avenue, 78,405 on NAIA Road (Seaside Drive); Recorded traffic at NAIA Expressway (Phase I) in 2010 is 18,332 vehicles in both directions. This number increases to 36,391 at beginning of 2011 with 60% of traffic moving in the direction of the Skyway; Most of these vehicles entering Skyway are exiting at the Makati exits of Skyway (Magallanes exit and Osmena exit). At present, use of the entire stretch of NAIA Expressway Phase I is free of charge as well as use of the portion of the Skyway from NAIA Expressway to the Skyway Makati exits; The number of vehicles recorded at the main entrance of terminals of the airport is also significant at 16,578 a day at Terminal 1, 16,839 at Terminal 2 and 11,375 at Terminal 3. Traffic recorded at the gate of the Cargo Terminal is 1,149 vehicles a day; and Observed traffic volume at the major corridors in vicinity of the airport is also high at 95,669 in Roxas Boulevard and 95,675 in EDSA.
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FIGURE 3: Traffic Volumes on Roads Surrounding NAIA
NAIA Expressway (Phase - 1) Traffic Data
Direction From Skyway To Skyway Total 2010 9,407 8,925 18,332 2011 14,866 21,525 36,391
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95,675 82,705
95,669 85,890
11,071 7,504 2,187
33,895 31,609 49,664 64,698 879 11,375 61,069 65,229 18,332 44,958 51,284 16,856 36,391 (4) 41,899 48,373 44,476
71,445
(1)
78,405 90,485 13,071 12,985 (2) 96,883 (3) 69,174 65,876 61,652 16,839 3,668 16,578 2,049 1,149 4,542 61,579 44,476
LEGEND April 2011 (JICA Study Team) Feb. 2010 (ERIA) Intersection Count Feb. 2010 (ERIA) Jan. 2011 (JICA)
Source: Review and Update of Feasibility Study of NAIAX Phase II Final Report 2011_06 Chapter 4
Observations of hourly variation of traffic are as follows: Traffic accessing the terminals of the NAIA has peak period at noon time (11:00AM to 3:00PM) and dramatically decreases around midnight (1:00AM to 3:00AM). The highest number of vehicles recorded in one hour is 1,283 at Terminal 2. There is no observed difference of traffic characteristics between weekday and weekend day. The peak hours of traffic on Sales Road are between 8:00AM and 11:00AM during the weekday. On weekend days however there is also a high volume of vehicles from 5:00PM onwards moving in the direction of Andrews Avenue. At Andrews Avenue (near Aurora Road), both on weekday and weekend day, there is a constant high volume of vehicles from 6:00AM to 7:00PM, with each direction having more than 1000 vehicles per hour. The highest recorded number of vehicles in an hour is 2,119 on a weekday and 2,862 on the weekend. Traffic volume at Andrews Avenue near Domestic Road is also very high and the number of vehicles recorded constantly exceeded 1,000 vehicles an hour from 6:00AM to 9:00PM on weekdays. On weekend days however, the traffic characteristics change and there is a very high peak of traffic at noon time in the direction of Roxas Boulevard, and then again at 9:00PM to 10:00PM in the same direction. This peak hour may be correlated with airline flight schedules.
16
DPWH NAIA Expressway Project: Information Memorandum The highest traffic volume is observed on the NAIA Road (Seaside Drive) where both weekday and weekend day have the same traffic characteristics. The flow in the direction of coastal road is higher than the opposite direction and traffic volumes substantially decrease from 6:00PM onwards. Peak hours of traffic however are different, with peak hours on weekday from 11:00AM to 5:00PM and on the weekend from 9:00AM to 5:00PM.
July 2012
The following figures show observed traffic condition at NAIA Expressway study area.
FIGURE 4: Hourly Variation of Traffic In NAIA Expressway Study Area (Weekdays) AIRPORT TERMINALS
Terminal 1 1400 1200 1000 800 600 400 200 0 Cargo Terminal Terminal 2 Domestic Terminal 3
SALES ROAD
1,800 1,600 1,400 1,200 1,000 800 600 400 200 -
To ANDREWS AVE. From ANDREWS AVE.
6-7AM
7-8AM
8-9AM
1-2PM
2-3PM
3-4PM
4-5PM
5-6PM
6-7PM
7-8PM
9-10PM
9-10AM
10-11AM
11-12AM
12-1PM
8-9PM
ANDREWS AVENUE (NEAR AURORA ROAD)

2,500 2,000 1,500 1,000 500 From SLEX To SLEX
6-7AM 7-8AM 8-9AM 9-10AM 10-11AM 11-12AM 12-1PM 1-2PM 2-3PM 3-4PM 4-5PM 5-6PM 6-7PM 7-8PM 8-9PM 9-10PM 10-11PM 11-12PM 12-1AM 1-2AM 2-3AM 3-4AM 4-5AM 5-6AM
ANDREWS AVENUE (NEAR DOMESTIC ROAD)

2,500 2,000 1,500 1,000 500 To ROXAS BLVD. From ROXAS BLVD.
9-10AM 10-11AM 11-12AM
12-1PM 1-2PM
6-7AM
7-8AM 8-9AM
2-3PM 3-4PM
4-5PM 5-6PM 6-7PM
NAIA ROAD (SEASIDE DRIVE)

8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 From Coastal Rd To Coastal Road
Source: "Review and Update of Feasibility Study of NAIAX Phase II Final Report 2011_06 Chapter 4
7-8PM 8-9PM
9-10PM
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July 2012
Regarding vehicle composition, most of the vehicles recorded at the main gates of airport terminals are private cars. For example: At Terminal 1, 99% are cars and the remaining 1% are buses. At Terminal 2, share of cars is 86%; jeepneys, 7%; buses at 4%; and trucks, 3%. At Domestic Airport, 99% of the traffic is cars. At Terminal 3, share of cars is about 98% and the remaining 2% is shared by buses and trucks. At Cargo Terminal, cars share is 70% and trucks share is 30%.
FIGURE 5: Traffic Composition at the NAIA Terminal Main Gates
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 -
Truck Bus Jeepney Car
Terminal 1
Terminal 2
The main users of the corridor where the future NAIA Expressway will run are cars. The share of cars at Sales Road is 69%, at Andrews Avenue near Aurora Street 67%, at Andrews Avenue near Domestic Road 58%, and at NAIA Road (Seaside Drive) 66%. A travel time survey was conducted by JICA on 15 April 2011 (Friday) from 7:00AM to 9:00PM where a single run every hour was carried out to determine the most congested period. The survey shows that: The longest travel time spent in the section is around 40 minutes (5:00 PM) and the direction is from Skyway to Roxas Boulevard. This means travel speed is below 10 km/hr for the entire 5.8 km stretch. The shortest travel time is 11 minutes (12:00AM) in the direction of Roxas Boulevard to Skyway. Average travel speed is around 30 km/hr.
Terminal 3
Domestic
Cargo
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July 2012
If NAIA Expressway Phase II is built the expected travel time is around 8 minutes (excluding any stop time at a toll plaza) from Roxas Boulevard to Skyway. The travel speed is about 45 km/hr for the entire 5.6 km expressway stretch.
The Figure below shows speeds in the most congested hour (5 to 6PM).
FIGURE 6: Travel Speed from Roxas Blvd. to Skyway Expressway (From 5 to 6pm)
EDSA
Roxas Boulevard
Skyway / SLEX
Terminal 3
Manila-Cavite Coatal Road
Terminal 2 Terminal 1
LEGEND Less than 10km/hr 10km ~ 20km/hr 20km ~ 30km/hr Ov er 30km/hr
Road congestion can be observed on many of the existing roads in the area, and the volume of traffic has almost reached the roads theoretical capacity: Sales Street at 84%. Andrews Avenue at 91%. Domestic Road at 86%. NAIA Road at 82%. Imelda Avenue at 81%. Ninoy Aquino Road at 81%. EDSA at 100%. Roxas Boulevard at 100%.
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July 2012
V. RIGHT-OF-WAY AND RESETTLEMENT

A. RIGHT-OF-WAY (ROW) ACQUISITION
ROW acquisition area for the Project is about 33,000 square meters wherein majority of the lots are owned by Government through Government-Owned and Controlled Corporations (GOCCs) such as the Manila International Airport Authority, the Light Rail Transit Authority, PAGCOR, Philippine Reclamation Authority and the Philippine Air Force. The DPWH expects to be able to turn over all the ROW within approximately one (1) year from the signing of the TCA to ensure that the Concessionaire is able to perform its obligations under the TCA. The DPWH may also turn-over ROW in sections to the Concessionaire to accelerate construction. The DPWH will coordinate with the Concessionaire on the relocation of public utility facilities and structures in accordance with the Concessionaire's construction schedule to avoid delay the construction of the Project. The Concession Agreement shall set out the details of the arrangement for relocating public utility facilities and structures. Presently, the DPWH is already coordinating with the affected utility agencies on this matter since under DPWH Department Order No. 26 series of 2011 on Policy on Diggings/Excavations by Private and Public Utilities on National Roads signed 3 May 2011, a utility agency is obliged to remove or relocate its existing utility facilities or structures located on a national road should this be required by the DPWH for expansion or improvement. Maps of underground utilities will be provided to Pre-Qualified Bidders and will be included in the Data Room. DPWH has already completed the parcellary survey for the Project. Negotiations with affected parties are on-going for direct acquisition. Formal expropriation proceedings will be conducted after six months if agreement is not reached with affected parties.
B. RESETTLEMENT OF INFORMAL SETTLERS AND THE RESETTLEMENT ACTION PLAN

The implementation of the NAIA Expressway is expected to yield a number of involuntary resettlement impacts as a result of land acquisition for ROW. More than sixty (60) households of informal settlers have been identified as affected by the Project. Other affected areas are commercial establishments with expired leases (with MIAA) that have partially affected offices and facilities along the road alignment. DPWH is currently coordinating with MIAA and the Pasay City Local Government for the possible relocation site for the affected households. Resettlement will be done in accordance with the rules and regulations of the Philippine Government, and guidelines of the World Bank, Asian Development Bank, and JICA.
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July 2012
VI. CONCESSION STRUCTURE

A. LEGAL FRAMEWORK FOR CONCESSION
The BOT Law provides the legal framework for government agencies to enter into PPP contracts with qualified private sector proponents for the prosecution of government infrastructure or development projects. In particular, the BOT Law and its Revised IRR describe the requirements and procedures for the preparation, approval, tendering and implementation of PPP/BOT projects. The Project will be a public utility. The Project provides flexibility for the Concessionaire to both own the income stream and operate the Project, provided it satisfies the Filipino nationality requirement under Art. XII, Section 11 of the Philippine Constitution, or to own the income stream from the Project and appoint a Facility Operator to operate the Project. Under the second option, only the Facility Operator needs to satisfy the Filipino nationality requirement.
B. PROJECT STRUCTURE
The Project was approved to be implemented as a variant of the Build-Transfer-Operate (BTO) contractual arrangement, which is one of the PPP variants specifically authorized under the BOT Law. In a BTO scheme, the private sector party or concessionaire will be required to construct the infrastructure facility and assume construction-related risks arising from cost overruns, delays and other performance risks connected to construction. Once the facility is commissioned satisfactorily, title over the facility is transferred to the implementing agency, but the private sector party operates the facility on behalf of the implementing agency pursuant to the terms of the TCA. As a form of repayment for financing, constructing, operating and maintaining the facility, the private sector party is authorized to charge and collect tolls, fees and charges from the end users. The approved BTO variation entails the turnover and retrofitting of the existing NAIA Expressway Phase I to allow seamless operation with Phase II; and, the immediate transfer, after completion, of the ownership, operation and maintenance of the At-Grade Entertainment City Works to Government. The principal terms and conditions governing the transaction are set out in the TCA, which provides for the obligations of the DPWH and the Concessionaire in respect of the development and operation of the facility, and other mutual undertakings, covenants and conditions to be performed or fulfilled by each of the parties.
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July 2012
VII. KEY COMMERCIAL FEATURES OF THE DRAFT TCA

The following are some of the indicative key commercial features and terms that are contemplated under the draft TCA being prepared for the Project: Grant of a 30-year concession (inclusive of construction period), reckoned from the delivery of the government of the ROW1, to the Project Proponent to exclusively undertake the following: o o o o o raise financing for the total Project cost (not covered by the Infrastructure Support Facility) and achieve financial close within one year from the signing of the TCA; design the Phase I Adjustment Works, Phase II Works, and Entertainment City Works (if needed); construct the Phase I Adjustment Works and Phase II Works within two years from approval of the Detailed Engineering Design; construct and turn-over the At-Grade Entertainment City Works by December 2013; operate and maintain the adjusted Phase I and completed Phase II, or if the Concessionaire is foreign-owned or controlled, through its qualified Facility Operator to undertake the operation of the Project 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 for the profit or loss in the Project as a going business concern; and turn-over the NAIA Expressway in good condition to DPWH at the end of the concession period.
o o o
DPWH obligations: o o o o procure and deliver in a timely manner the required ROW; subject to Concessionaire compliance with pre-defined obligations, ensure the grant of the TOC from the TRB assist the Concessionaire in securing necessary national government consents for the Project; ensure the application of the toll adjustment formula prescribed in the TCA and provide compensation in the event of disallowances of authorized computed tolls.
Refers to the land or land rights required for the Project based on the conceptual designed prepared by DPWH.
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July 2012
Other major commercial points include: o o The bid parameter will be the lowest amount required for the Infrastructure Support Facility. 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 (the Full-route rate) and the other for the shorter segments between Terminal 3 and the Skyway and Terminals 1 and 2 and Roxas Boulevard/Macapagal Boulevard/Entertainment City (the Short-segment rate) Opening tolls will be set by DPWH and approved by TRB. The approved toll rate will be disclosed after Pre-Qualification. 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 TRo CPIn CPIo o = = = = new Toll Rate as adjusted old Toll Rate as of the last adjustment Consumer Price Index for month of the new review date issued by the National Statistics Office Consumer Price Index for the month of the last review date issued by the National Statistics Office
o o
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.
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DPWH NAIA Expressway Project: Information Memorandum Below is the risk allocation matrix for the Project.
TABLE 3: Risk Allocation Matrix Risk/Responsibility Traffic Toll & Adjustment Implementation Allocation Concessionaire DPWH Remarks No minimum traffic guarantee
July 2012
Compensation provided for disallowance of adjustment based on agreed formula Private financing; Infrastructure Support Facility: Terms and Conditions for the subordinated financing facility shall be disclosed during the Bid Process; the ISF shall be managed by a reputable Financial Institution 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
Project Financing
Concessionaire
Inflation & Foreign Exchange Basic ROW Acquisition & Delivery Design/Construction
Concessionaire DPWH Concessionaire
Operation/ Maintenance
Concessionaire
Political Risks
DPWH
Force Majeure
Concessionaire and DPWH
Turn-over at the end of Concession
Concessionaire
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July 2012
VIII. PROCUREMENT PROCESS

A. LEGAL BASIS OF PROCUREMENT
The international competitive bidding for the Project (the Bidding) will be conducted in accordance with the procurement rules and procedures set forth in the BOT Law (Republic Act No. 6957, as amended by Republic Act No. 7718) and its Revised Implementing Rules and Regulations (April 2006) (the Revised IRR). The Special Bids and Awards Committee for Public Private Partnership Projects of the DPWH (SBAC) created for this purposeshall administer the process of pre-qualification and bidding for the project.
B. OUTLINE OF THE BIDDING PROCESS

The Bidding for the Project will be conducted in an open and transparent manner following the two-envelope/two-stage system for soliciting bids under the Revised IRR. The general procedure for the Bidding will be as follows:
PRE-QUALIFICATION
1. The first stage is the pre-qualification Process, which will be governed by the
Instructions to Prospective Bidders. Prospective Bidders may be partnerships, corporations or unincorporated consortiums of two or more partnerships and/or corporations. During the Pre-Qualification stage, Prospective Bidders will have to submit documents that establish that they meet the legal, technical, and financial requirements set by the DPWH to bid for the Project. 2. Prospective Bidders will be asked to apply to pre-qualify to bid by submitting their Qualification Documents on the Qualification Documents Submission Date. After reviewing the documents, the SBAC will determine which Prospective Bidders fulfill the requirements to pre-qualify, and inform all Prospective Bidders who are pre-qualified within ten (10) days of the Qualification Documents Submission Date. Only PreQualified Bidders will be invited and allowed to submit a Bid for the Project.
PREPARATION OF BID PROPOSALS

3. After all Pre-Qualified Bidders are informed that they have pre-qualified, they may purchase the Instructions to Bidders and other Bidding Documents 4. The Instructions to Bidders will contain the detailed rules and procedures for preparation, submission, and evaluation of Bid Proposals, the date, time, and location of the Pre-Bid Conference, and the Bid Proposal Submission Date, which will be no less than 90 days after completion of pre-qualification. It will also describe the procedures to be followed from the Bid Proposal Submission Date until the signing of the Concession
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July 2012
Agreement between the DPWH and the Winning Bidder or the corporation to be formed by the Winning Bidder. 5. Pre-Qualified Bidders will be allowed to send any comments and inquiries on any of the Bidding Documents, including the Draft Concession Agreement and the Minimum Performance Standards and Specifications.
PRE-BID CONFERENCE
6. During the Pre-Bid Conference, Pre-Qualified Bidders will be invited to raise any questions and issues regarding the Project, the Bidding Process, and the Bidding Documents. In addition, DPWH will make arrangements for Pre-Qualified Bidders which wish to have one-on-one discussions with it on any topic relating to the Bid 7. No later than 30 days before the Bid Proposal Submission Date, the DPWH will release to Pre-Qualified Bidders the final drafts of the Concession Agreement, and if there are any changes to them, the Minimum Performance Standards and Specifications.
SUBMISSION OF BID PROPOSALS

8. The Bid Proposals to be submitted by Bidders on the Bid Proposal Submission Date shall contain: A Bid Letter in a prescribed form, corporate authorizations to bid, a Bid Security, and other supporting documents A Technical Proposal which will include: o Traffic Study; o Conceptual Engineering Design for Phase II of the Project; o Construction Plan; o Cost estimates for the Phase I Adjustment Works, Phase II Works, and At-Grade Entertainment City Works; o Cost estimate for other works included in the Entertainment City Road 2 Network Masterplan ; o Operation and Maintenance Plan; and o Other documents as may be required by DPWH. A Financial Proposal which will include: o Bid Amount stating the financing to be required from the Infrastructure Support Facility (ISF); and o Supporting financial model.
9. Pre-Qualified Bidders will be asked to bid for the Project by submitting their Bid Proposals on the Bid Proposal Submission Date.
BID EVALUATION AND POST QUALIFICATION

10. The SBAC will first review the Bidders Bid Letter and supporting documents. Only Bidders whose Bid Letters and supporting documents are complete will have their Technical Proposals opened. The SBAC will then review the Bidders Technical
See XIII. PAGCOR Entertainment City section on description of the Entertainment City Road Network Masterplan
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July 2012
Proposals and evaluate them on a pass/fail basis. Bidders will be informed as to whether their Technical Proposals were passed. The SBAC will return the Financial Proposals of Prospective Bidders whose Technical Proposals did not pass. 11. Financial proposals of Bidders whose Technical Proposals were passed will be opened and evaluated. The Pre-Qualified Bidder whose Technical Proposal is passed and who submits a Bid with the highest amount of Government Payment will be subject to a postqualification process to verify the accuracy of the statements it made in its Qualification Documents and Bid Proposal. 12. Post-qualification will be done to verify and validate whether the Pre-Qualified Bidder whose Technical Proposal is passed and who submits a Bid with the highest amount of Government Payment passed all the requirements and conditions as specified in the Bidding Documents. Should the Bidder fails to meet any of the requirements or conditions, he will be post-disqualified and the SBAC will conduct the post-qualification on the Bidder with the next highest amount of Government Payment.
AWARDING OF BIDDER AND ISSUANCE OF NOTICE OF AWARD

13. If the Winning Bidder with the highest amount of Government Payment passes the postqualification process, it will be designated the Winning Bidder and receive a Notice of Award.
SIGNING OF CONCESSION AGREEMENT

14. The Winning Bidder will have to provide proof of incorporation, capitalization, and availability of debt financing and post a Construction Performance Security within thirty (30) days of receipt of the Notice of Award, and will have to enter into a Concession Agreement immediately after providing these required documents.
C. INFORMATION AVAILABLE TO BIDDERS

Immediately after notifying Pre-Qualified Bidders that they have been pre-qualified, DPWH will allow Pre-Qualified Bidders access to a physical data room located at the DPWH Main Office that will contain documents and relevant background information relating to the Project, including but not limited to the following documents: 1. Review and Update of Feasibility Study of NAIAX Phase II Final Report prepared by the JICA Study Team; 2. Feasibility Study on the NAIA Expressway Project Phase II by Filipinas Dravo in association with Philipps Technical Consultants Corporation; 3. As-Built Drawings of Phase I; 4. Asset Register of Phase I; 5. Original Plans and Specifications of Phase I; 6. Geotechnical Investigation Data for Phase I; 7. Design for the At-Grade Entertainment City Works; 8. Other information related to the Entertainment City Road Masterplan; 9. Maps of underground utilities; 10. Environmental Compliance Certificates; and 11. Environmental Impact Assessment.
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July 2012
PART III. OTHER INFORMATION

IX. INVESTMENT FRAMEWORK
A. TAXATION
Laws governing the Philippine taxation are provided in the National Internal Revenue Code, as revised by the Tax Reform Act of 1997, effective January 1, 1998. Taxation is administered by the Bureau of Internal Revenue (BIR) under the Department of Finance.
CORPORATE TAX
Corporate tax is a tax to be paid by a corporation based on the amount of profit generated. Below is a table showing the various tax rates applicable:
TABLE 4: CORPORATE INCOME TAXATION
Sources
Taxable income not subject to special tax rates Interest on foreign loans Interest income derived by a domestic corporation from a depository bank under the expanded foreign currency deposit system Dividends from domestic corporations Gains on sales of shares of stock not traded in the Stock Exchange Not over PhP100,000.00 On any amount in excess of PhP100,000.00 Source: Board of Investments
Domestic/Resident Foreign Corporation

30% 20%
Non-resident Foreign Corporation

30% 35%
N/A
20%
7.5%
N/A
5% 10%
5% 10%
A Minimum Corporate Income Tax (MCIT) was also established under the Tax Reform Act. A minimum of 2% MCIT on gross income on an annual basis is imposed on corporations whose regular corporate income tax liability is less than the MCIT beginning
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July 2012
the fourth taxable year following the year they commenced business operation. Any excess of the MCIT over the normal tax will be carried forward and credited against the normal tax for the succeeding three (3) taxable years. Aside from that, there is Improperly Accumulated Earnings Tax, which is a 10% tax imposed on the improperly accumulated earnings of a corporation, except in the case of publicly held corporations, banks, and other non-bank financial intermediaries and insurance companies. When a corporation allows its earnings or profit to accumulate beyond its reasonable needs, it is assumed that the purpose is to avoid tax on stockholders, unless proven to the contrary.
INCOME TAX
Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 less the deductions and/or personal and additional exemptions, if any, authorized for such types of income, by the Tax Code or other special laws.
TABLE 5: INDIVIDUAL TAXATION
Sources
Non-resident aliens not engage in trade and business flat income tax rate Resident citizens/aliens (gainfully employed) Graduated income tax rates Source: Bureau of Internal Revenue
Rates
25% 0-35%
VALUE-ADDED TAX (VAT)

VAT is a form of sales tax. It is equivalent to 12% of the gross selling price or gross value in money of goods or properties sold, bartered or exchanged. It is a tax on consumption levied on the sale of goods and services and on the imports of goods into the Philippines. Those required to file VAT returns are as follows: Every person or entity who in the course of their trade or business, sells or leases goods, properties and services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed One Million Five Hundred Thousand Pesos (P 1,500,000.00) for any twelve month period. A person required to register as VAT taxpayer but failed to register. A person who imports goods. VAT registered entities are required to issue an invoice or receipt for every sale and, in addition to regularly required accounting records, they must maintain subsidiary sales and purchase journals exclusively for VAT purposes. VAT reports must be submitted on a quarterly basis, twenty-five days after the end of the quarter. VAT payments must be made on a monthly basis.
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July 2012
TAX TREATIES
The Philippines has tax treaties with various countries like the United States, UK, Canada and Singapore, which provide for tax relief on income derived by foreign or local residents of the Philippines and the foreign country from sources within their respective territories. The tax relief includes tax exemption or entitlement to preferential tax rates on certain types of income such as interest, royalties and dividends. The business profits of a resident of another country with whom the Philippines has a tax treaty are taxable in the Philippines only if the resident has a permanent establishment in the Philippines to which the profits are attributable. As of June 2010, the Philippines have a total of 37 effective tax treaties. Following is the list of countries and their dates of effectivity:
TABLE 6: EFFECTIVE PHILIPPINE TAX TREATIES
Country
1. Australia 2. Austria 3. Bahrain 4. Bangladesh 5. Belgium 6. Brazil 7. Canada 8. China 9. Czech 10. Denmark (Renegotiated) 11. Finland 12. France 13. Germany 14. Hungary 15. India 16. Indonesia 17. Israel 18. Italy 19. Japan 20. Korea 21. Malaysia 22. Netherlands 23. New Zealand 24. Norway 25. Pakistan 26. Poland 27. Romania 28. Russia 29. Singapore 30. Spain
Date of Effectivity
January 1, 1980 January 1, 1983 January 1, 2004 January 1, 2004 January 1, 1981 January 1, 1992 January 1, 1977 January 1, 2002 January 1, 2004 January 1, 1998 January 1, 1982 January 1, 1978 January 1, 1985 January 1, 1998 January 1, 1995 January 1, 1983 January 1, 1997 January 1, 1990 January 1, 1981 January 1, 1987 January 1, 1985 January 1, 1992 January 1, 1981 January 1, 1998 January 1, 1979 January 1, 1998 January 1, 1998 January 1, 1998 January 1, 1977 January 1, 1994
Date and Venue of Signature

May 11, 1979, Manila, Philippines April 4, 1981, Vienna, Austria November 7, 2001, Manila, Philippines September 8, 1997, Manila, Philippines October 2, 1976, Manila, Philippines Sept. 29, 1983, Brasilia, Brazil March 11, 1976, Manila, Philippines November 18, 1999, Beijing, China November 13, 2000, Manila, Philippines June 30, 1995, Copenhagen, Denmark October 13, 1978, Manila, Philippines January 9, 1976, Kingston, Jamaica July 22, 1983, Manila, Philippines June 13, 1997, Budapest, Hungary February 12, 1990, Manila, Philippines June 18, 1981, Manila, Philippines June 9, 1992, Manila, Philippines December 5, 1980, Rome, Italy February 13, 1980, Tokyo, Japan February 21, 1984, Seoul, Korea April 27, 1982, Manila, Philippines March 9, 1989, Manila, Philippines April 29, 1980, Manila, Philippines July 9, 1987, Manila, Philippines February 22, 1980, Manila, Philippines September 9, 1992, Manila, Philippines May 18, 1994, Bucharest, Romania April 26, 1995, Manila, Philippines August 1, 1977, Manila, Philippines March 14, 1989, Manila, Philippines
30

31. Sweden (Renegotiated) 32. Switzerland 33. Thailand 34. United Arab Emirates 35. United Kingdom of Great Britain and Northern Ireland 36. United States of America 37. Vietnam Source: Bureau of Internal Revenue January 1, 2004 January 1, 2002 January 1, 1983 January 1, 2009 January 1, 1979 January 1, 1983 January 1, 2004 June 24, 1998, Manila, Philippines June 24, 1998, Manila, Philippines July 14, 1982, Manila, Philippines September 21, 2003, Dubai, UAE
July 2012
June 10, 1976, London, United Kingdom October 1, 1976, Manila, Philippines November 14, 2001, Manila, Philippines
TAX INCENTIVES
The Omnibus Investments Code grants tax holidays of either four or six years to Board of Investments-registered enterprises, provided qualifies under the annual Investments Priority Plan entitlements. Tax credits are also granted for purchase of Philippine-made capital equipment and raw materials. Under the BOT Law and its IRR, projects costing more than Php1 billion are entitled to incentives, upon registration with the Board of Investments (BOI), as provided under the Omnibus Investment Code. Other incentives may be provided through P.D. 535 (1974), otherwise known as the Tourism Incentives Program of 1974. LGUs may also provide additional tax incentives, exemptions or reliefs, subject to the provisions of the Local Government Code (LGC) of 1991.
LOCAL TAX
The LGC of 1991 provides for the fiscal autonomy of cities or local governments from the national government, and allows them to impose local and real property taxes. The local governments of Pasay City and Paraaque City, where the Project will be operated, are allowed to impose business taxes, based on their respective revenue ordinances or enacted resolutions/ordinances. Local contractors tax under which the Concessionaire could be subject is a graduated tax with a maximum of between 0.5% to 0.75% of gross receipts under the Local Government Code. Below is a table showing the schedule of taxes that municipalities may levy on contractors, per gross receipts for the preceding calendar year. However, the rates of taxes that cities may levy may exceed the maximum rates allowed for the province or municipality by not more than 50%.
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TABLE 7: AMOUNT OF TAX PER ANNUM
Gross Receipts (in PhP)

Less than 5,000.00 5,000.00 or more but less than Php 10,000.00 10,000.00 or more but less than 15,000.00 15,000.00 or more but less than 20,000.00 20,000.00 or more but less than 30,000.00 30,000.00 or more but less than 40,000.00 40,000.00 or more but less than 50,000.00 50,000.00 or more but less than 75,000.00 75,000.00 or more but less than 100,000.00 100,000.00 or more but less than 150,000.00 150,000.00 or more but less than 200,000.00 200,000.00 or more but less than 250,000.00 250,000.00 or more but less than 300,000.00 300,000.00 or more but less than 400,000.00 400,000.00 or more but less than 500,000.00 500,000.00 or more but less than 750,000.00 750,000.00 or more but less than 1,000,000.00 1,000,000.00 or more but less than 2,000,000.00 2,000,000.00 or more
Amount of Tax Per Annum (in PhP)

27.50 61.60 104.50 165.00 275.00 385.00 550.00 880.00 1,320.00 1,980.00 2,640.00 3,630.00 4,620.00 6,160.00 8,250.00 9,250.00 10,250.00 11,500.00
at a rate not exceeding fifty percent (50%) of one percent (1%) Source: Local Government Code of 1991, Book II Local Taxation and Fiscal Matters
B. FOREIGN EXCHANGE
Foreign exchange may be bought and sold freely by foreign corporations operating in the Philippines and may be brought into or sent out of the country with few restrictions. Foreign investments and profits can also be repatriated in foreign exchange with minimal control from the Bangko Sentral ng Pilipinas (BSP or Central Bank of the Philippines). Registration of foreign investments with the BSP requires proof of inward remittance of the foreign exchange used to fund the investment and has now become essentially an automatic process after the necessary corporate registration has been completed by the Philippine Securities and Exchange Commission. Should the banking system be also used for the payment of royalties, the related royalty contract should be registered with the Technology Transfer Registry of the Bureau of Patents, Trademarks, and Technology Transfer.
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July 2012
C. FOREIGN OWNERSHIP AND MANAGEMENT

The Philippine Constitution and a number of Philippine laws operate to limit the extent to which non-Philippine nationals may participate in the ownership and management of public utilities. 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% Foreign 40% Filipino companies. Only forty percent (40%) ownership of common shares, and not of the total outstanding capital stocks (common and non-voting preferred shares), of corporations operating public utilities is allowed to non-Philippine nationals. All executive and managing officers of such corporation are then restricted to Filipino citizens. To ensure compliance with these nationality requirements, Commonwealth Act No. 108, also known as the Anti-Dummy Law, provides that any person, corporation or association with a right, franchise or privilege, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to the citizens of the Philippines or to 60/40 companies, is prohibited from permitting or allowing the use, exploitation or enjoyment of such right, franchise or privilege by a non-qualified person or entity or in any manner permitting or allowing any non-qualified person to intervene in the management, operation, administration, or control thereof, whether as an officer, employee or laborer therein, with or without remuneration, except technical personnel whose employment may be specifically authorized by the Secretary of Justice. The Anti-Dummy Law, however, allows the election of aliens as members of the board of directors or governing body of corporations in proportion to their allowable participation in the capital of such entities and the employment of foreigners in the capacity of technical consultants.
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July 2012
X. REGULATORY FRAMEWORK
A. NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY
The National Economic and Development Authority (NEDA) is the countrys independent economic development and planning agency. The NEDA is primarily responsible for formulating the countrys social and economic policies, plans and programs, including the formulation of annual and medium-term public investment programs. National projects implemented through the BOT Law and costing more than PhP300 million must be submitted to the NEDA Board for approval upon the recommendation of the Investment Coordination Committee (ICC). The NEDA Board is headed by the President, with the Secretary of Socio-Economic Planning, concurrently NEDA Director-General, as vice-chairman. The other members of the NEDA Board are the Executive Secretary and the (a) Secretary of Finance, (b) Secretary of Trade and Industry, (c) Secretary of Agriculture, (d) Secretary of Environment and Natural Resources, (e) Secretary of Budget and Management, (f) Secretary of Labor and Employment, and (g) Secretary of Local Government.
B. TOLL REGULATORY BOARD

The TRB is a government agency created on 31 March 1977 by virtue of Presidential Decree No. 1112 (PD 1112), otherwise known as the Toll Operation Decree. It is an attached agency of the Department of Transportation and Communications. The TRB Board is composed of the Secretary of Transportation and Communications as Chairman, and its members are the Secretaries of DPWH, the Department of Finance, and NEDA, or their duly authorized representatives with ranks not lower than Undersecretary. A representative from the public sector, preferably a lawyer or an economist with adequate experience in public utilities regulation, also serves on the Board. The TRB has the powers to: a) grant authority to operate a toll facility and to issue the necessary Toll Operation Certificate; b) issue, modify and promulgate the rates of toll that will be charged the direct users of toll facilities; and c) approve or disapprove petitions for toll increases.
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July 2012
XI. THE PHILIPPINE TOLL ROAD SYSTEM

The Philippine High Standard Highway Master Plan is shown in the Figure below. It provides the long list of proposed Expressways as identified in the Master Plan for implementation in the Medium Term Plan, 2011-2016 and beyond. The DPWH completed on July 2010 the Study of Master Plan on High Standard Highway (HSH) Development in the Republic of the Philippines through technical assistance of the Japan International Cooperation Agency (JICA). It focused on Metro Manila and its surrounding areas extending 200 KM radius including Metro Cebu and Tagum, Davao and General Santos Corridor. The toll rate proposed for the NAIA Expressway will be comparable with the current Skyway toll per km and is therefore considered to be an acceptable rate, particularly taking into account the higher willingness to pay of people accessing the Airport. The following tables show other transport costs that can be used as benchmarks for understanding the willingness to pay the new toll on the NAIA Expressway.
TABLE 8: Other Transport Costs in Manila Good 1 liter of gas (unleaded) 1 liter of diesel Airport Taxi Taxi Jeepney Local bus (air con) Shared Taxi / Shuttle LRT fare (current) Makati on street parking Day flat rate airport parking fee (for cars and jeeps) Overnight airport parking Park N Fly Cost Php52.60-57.67 Php42.80-54.35 Php70 boarding and Php4.00 per 300m Php40 boarding and Php3.50 per 300m Php8.00 for first 4kms then Php1.40/km Php12 for first 5kms then Php2.20/km Php12 minimum; Php2.00/km Between Php12 to Php20 35 for 2 hours 35 50 per night 300 per full day (including overnight)
Source: Dept. of Energy, Oil Price Monitor as of April 2012; TRB as of October 2011 October
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July 2012
TABLE 9: Philippine Toll Road System Toll Rate (2011 Pesos per Km) Class 1 Toll Road Car, Jeep, Pick-up 35 6.84 11.92 7.85 2.38 3.02 3.33 8.96 1.43 2.68 Class 2 Light Truck 70 13.68 23.84 15.70 5.92 6.04 6.82 17.92 2.86 5.36 Class 3 Heavy Truck, Trailer 20.53 35.76 23.56 7.08 9.10 9.85 26.87 4.26 8.04 Alabang Sto. Tomas, Batangas R-1 Extension to Bacoor (6.6km) Bacoor Bay to Kawit, Cavite (6.475km) Remarks
NAIA Ex. Phase I Elevated Phase I Elevated Phase II At grade North Luzon Expressway (NLEX) Alabang-Calamba-Sto. Tomas Expressway (ACTEX) Manila Cavite Toll Expressway (MCTE) Phase I Phase II
Per entry fixed fee** Skyway/Buendia Bicutan (9.5km) Alabang-Bicutan (6.88km) Magallanes-Alabang (13.50km)
Metro Manila Skyway
Southern Tagalog Arterial Road (STAR) Subic-Clark-Tarlac Expressway (SCTEX)
Source: TRB, 2011 May Note: Skyway, Manila Cavite Expressway, part of NLEX are open systems **Discounted toll of Php20 for Class 1 and Php40 for Class 2 self-imposed by operator as of March 2012.
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July 2012
FIGURE 7: High Standard Highway Master Plan
NAIA Expressway
Source: DPWH
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July 2012
TABLE 10: High Standard Highway Master Plan 200km Sphere of Metro Manila
Existing
Subic-Clark-Tarlac Expressway* North Luzon Tollway* C-5 Expressway (Segment 8.1) Metro Manila Skyway, Stage 1* SLEX (Magallanes-Alabang)* Manila Cavite Toll Expressway* South Luzon Tollway* Manila-Cavite Toll Expressway (R-1 Extension)* Metro Manila Skyway, Stage 2* Southern Tagalog Arterial Road (Star)* Total
Length (Km)
93.77 82.62 2.34 9.30 13.43 6.75 36.03 7.00 6.86 42.00 300
Planned/On-Going
Tarlac-Pangasinan-La Union Toll Expressway C-5 Expressway (Segment 8.2, 9 & 10) NLEX-SLEX Connector* Total
Source: DPWH
Length (Km)
88.58 19.92 13.34 122 *Toll Road
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July 2012
XII. NINOY AQUINO INTERNATIONAL AIRPORT

Historical passenger traffic at NAIA is summarized in the Table below.
TABLE 11: Passenger Traffic at the Ninoy Aquino International Airport (1994-2010) Year International Domestic Total % Change 2000 7,129,881 5,538,320 12,668,201 2001 7,143,613 5,401,264 12,544,877 -1.0% 2002 7,466,379 5,282,351 12,748,730 1.6% 2003 7,126,338 5,791,115 12,917,453 1.3% 2004 8,416,005 6,740,636 15,156,641 17.3% 2005 9,222,006 6,971,585 16,193,591 6.8% 2006 9,766,649 8,159,025 17,925,674 10.7% 2007 10,723,715 9,707,219 20,430,934 14.0% 2008 11,272,647 10,720,343 21,992,990 7.6% 2009 11,203,029 12,716,150 23,919,179 8.8% 2010 12,380,600 14,739,299 27,119,899 13.4% 2011 12,969,466 16,582,798 29,552,264 8.97% Compound Average Annual Growth Rates 2000-2011 5.75% 10.75% 8.14% 2000-2005 5.57% 4.96% 5.23% 2006-2011 5.91% 15.58% 10.75%
Source: MNL 2008-2010, NAIA web site: http://125.60.203.88/miaa/ MNL 1994-2007: ACI World Traffic Report
Transit 96,715 74,094 63,185 38,356 29,880 22,440 16,791 36,693 33,494 26,622 n.a. n.a.
International passenger traffic at NAIA accounts for 44% of total traffic in the airport. On the other hand, domestic passenger traffic has been growing faster than international passenger traffic and now accounts for 56% of total passenger traffic at NAIA. International passenger traffic grew strongly between 2003 and 2008 while the recession in 2009 caused a small downturn. However, growth in 2010 was very strong at 10.51% and was grew by 4.76% in 2011. Since 2000, the average annual growth rate of international passengers has been 5.75%. For domestic passenger traffic, growth has been fairly steady as it averaged 10.75% since 2000 and has even accelerated in the past 5 years averaging 15.58% over that period. This is likely attributed to the emergence of budget carriers such as CebuPacific Air, ZestAir, and AirPhilippines which has made domestic air travel more competitive, affordable and accessible. The total number of arriving/departing (A/D) passengers at NAIA in 2011 was 29.55 million, the highest recorded in history. This was up by around 9% over 2010 totals. Growth in total A/D passengers has averaged 10.75% per year over the past 5 years and 8.14% per year since 2000.
39

FIGURE 8: Total A/D Passengers at NAIA (1994-2010)
July 2012
The lack of adequate terminal facilities at the airport has likely constrained growth to some extent prior to the opening of Terminal 3 in 2008. Terminal 3 handled 9.5 million passengers in 2010 and has a capacity of 10 million passengers with expansion possible to 15 million. Growth in traffic could also be restricted by the capacity of the runway system and property developments close to the airport at the end of runway 06/24 (3750m) that negatively impact operation of this runway. Terminal 1 has already been operating at overcapacity for years and is currently undergoing renovations. The Government also intends to fully utilize Terminal 3 within the next few years after necessary repairs are made to ensure passenger safety and world-class service. Furthermore, Government has earmarked Php1.16 billion for the renovation of the NAIA Terminal 1 and for the construction of two rapid exit taxiways which will help alleviate congestion at the runways and also avoid flight delays due to congestion problems. Apart from NAIA, the closest domestic and international airport to Metro Manila is the Diosdado Macapagal International Airport (DMIA) which is located in Angeles City, Pampanga, approximately 85 km from NAIA. An airport strategy study for the greater capital region is now being undertaken by the Department of Transportation and Communications (DOTC) with support from JICA for the Project for the Study on Airport Strategies for the Greater Capital Region in the Republic of the Philippines to look at longterm options to develop DMIA but more as a complementary alternate international airport
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July 2012
given the aforementioned capacity limitations at NAIA. DMIAs current capacity is 2 million passengers and the airport serviced 725,023 international passengers in 2011. One major consideration in the development of DMIA is its location. Based on common experience, the trip from Clark to downtown Manila takes over 2 hours. The travel time is too long and would be unacceptable to many passengers. It should be noted that 80% of the main airports of big cities are 30 km or less from downtown. Traffic at DMIA and total traffic at the two airports is summarized in Error! Reference source not found.. Traffic at DMIA currently accounts for only 2% of the regions traffic and after initial strong growth in traffic, there has been almost no growth over the past 3 years from 2007 to 2010. Published seat capacity for 2011 at DMIA is 4% below the 2010 level.
TABLE 12: Passengers at NAIA, DMIA and the Region (2002-2010)
NAIA
DMIA
A/D Pass. 12,925,333 15,215,629 16,425,904 18,414,430 20,964,553 22,558,230 24,519,179 27,656,340
NAIA + DMIA
% Change 1.4% 17.7% 8.0% 12.1% 13.8% 7.6% 8.7% 12.8% 11.0% % NAIA 99.9% 99.6% 98.6% 97.3% 97.5% 97.5% 97.6% 98.1%
A/D Pass. A/D Pass. % Change Year 12,917,453 7,880 2003 15,156,641 58,988 649% 2004 16,193,591 232,313 294% 2005 17,925,674 488,756 110% 2006 20,430,934 533,619 9% 2007 21,992,990 565,240 6% 2008 600,000 23,919,179 6% 2009 27,119,899 536,441 -11% 2010 Compound Average Annual Growth Rates 2005-2010 10.9% 18.2%
Source: DMIA: various web sites
Note: Value for DMIA for 2009 is approximate.
The International Air Transport Association (IATA) releases five-year forecasts of passenger traffic by country. Their 2010 forecasts for the Philippines are summarized as follows: International Domestic 2010 11.0% 12.1% 2011 7.6% 11.3% 2012 7.3% 9.7% 2013 6.5% 9.5% 2014 5.5% 8.6% 2010-2014 7.6% 10.2% Given broad forecasts of GDP growth between 4-5% for 2012 and 2013, it may be expected that airport passenger traffic will grow at approximately 5% per year in the early years possibly slowing in the medium to longer term (10-20 years). The IATA forecasts indicate very strong growth in the short-term.
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July 2012
XIII. PAGCOR ENTERTAINMENT CITY

The master planned PAGCOR Entertainment City (Entertainment City), also formally known as the Bagong Nayong Pilipino Entertainment City Manila project, is an approximately 120 hectare Manila Bay waterfront development west of Roxas Boulevard and south of the SM Corporate District (SM Mall of Asia). The Entertainment City will be developed from purely private investments including four PAGCOR Licensees, namely Bloomberry Resorts and Hotels Inc., the consortium of Malaysias Genting Group and Alliance Global Group Inc. under Travellers International Hotel Group, the SM consortium through Belle Corp., and Japans Universal Entertainment Corp. through Tiger Resort Leisure and Entertainment, Inc. (each a Licensee and collectively, the Licensees). Each locator is required to invest an initial US$ 650 million out of their US$ 1 billion commitment as a Licensee of PAGCOR. Presently, several projects are on-going at the Entertainment City. Bloomberry has broken ground with its Solaire Manila Project which is an integrated resort complex housing a five-star hotel, gaming facilities, leisure facilities, and restaurants. The first phase, which is expected to open in 2013, is composed of a 14-story building complex with an 11story hotel on top of a three-level podium and a 10-story parking building with an 11th floor for machines and equipment. The Belle Grande Manila Bay of Belle Corp. is likewise under construction with completion targeted in 2013. The Belle Grade Manila Bay is expected to host three brands of five-start and six-star quality hotels with a total of 880 hotel rooms, have a total gaming area of 19,626 square meters and offer more than two hectares of retail and restaurant establishments. Universal Entertainment Corp. also broke ground on its 45-hectare Manila Bay Resorts project last January 2012. The Manila Bay Resorts complex will be composed of two hotels hosting 450 VIP and 600 luxury rooms, a 1000-room budget hotel, a high-end shopping mall, an indoor beach club, and a large-scale fountain attraction. Lastly, the Resorts World Bayshore is the planned development of Travellers International Hotel Group within their property which will feature a possible Grand Opera House and performing arts venue with a 2,500 seating capacity and have at least 3,500 hotel rooms to complement its gaming area. This project is around three times the size of another Travellers development, Resorts World Manila, located across Terminal 3 of the Ninoy Aquino International Airport in Pasay City. According to PAGCOR estimates, the Entertainment City is projected to generate at least 400,000 jobs and boost tourism in the country by possibly attracting an additional one million tourists annually. It is also expected to contribute at least US$11.5 billion to the economy annually which is roughly 10 percent of the global gaming market.
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July 2012
FIGURE 9: Aerial Shot of Entertainment City
Source: http://i268.photobucket.com/albums/jj23/SNL_oRbz/Manilaaerial5_PP_sized.jpg
ENTERTAINMENT CITY ROAD NETWORK MASTERPLAN

In order to complement these four developments within Entertainment City, a road network masterplan was prepared by PAGCOR and the Licensees. The masterplan includes designs and specifications for the following: 1. New Seaside Drive; 2. Bay Boulevard; 3. Service road; 4. Underground pedestrian crossing; 5. Electrical works; and 6. Drainage and waterline works. The At-Grade Entertainment City Works under the NAIAX concession cover numbers 1, 2 and 3 above. The Licensees may opt to negotiate directly with the winning bidder for possible additional works under the Entertainment City Road Network Masterplan that are not included in the At-Grade Entertainment City Works.
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July 2012
XIV. INDICATIVE TIMETABLE

2012 July August September
October December 2013 January December 2015 April 2016 January 2043 January
Publication of Invitation to Participate and Bid Pre-qualification Conference Submission of Pre-Qualification Documents Notice of Pre-qualification Release of Draft TCA to Pre-qualified Bidders Bid Conference Bid Submission
Signing of the TCA Turn-over of At-Grade Entertainment City Works
Start of Partial Operations
Start of Full Operations
Turn-over of the NAIA Expressway to DPWH
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NAIAX Information Memorandum 2012 - Final - July 31 2012

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NAIAX Information Memorandum 2012 - Final - July 31 2012

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Republic of the Philippines DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS

NAIA EXPRESSWAY PROJECT

With Assistance From

DPWH NAIA Expressway Project: Information Memorandum

DPWH NAIA Expressway Project: Information Memorandum

DPWH NAIA Expressway Project: Information Memorandum

XI. XII. XIII. XIV.

DPWH NAIA Expressway Project: Information Memorandum

DPWH NAIA Expressway Project: Information Memorandum

PART I. EXECUTIVE SUMMARY: INVESTOR HIGHLIGHTS

DPWH NAIA Expressway Project: Information Memorandum

DPWH NAIA Expressway Project: Information Memorandum

PART II. THE NAIA EXPRESSWAY PROJECT

DPWH NAIA Expressway Project: Information Memorandum

II. PROJECT DESCRIPTION

DPWH NAIA Expressway Project: Information Memorandum

DPWH NAIA Expressway Project: Information Memorandum

FIGURE 2: At-Grade Entertainment City Works Road General Layout Plan

DPWH NAIA Expressway Project: Information Memorandum Operations and Maintenance:

The Project description is summarized the following Table.

Operation start year

DPWH NAIA Expressway Project: Information Memorandum

A. TYPE OF TOLL SYSTEM

DPWH NAIA Expressway Project: Information Memorandum

Toll Rate Multiplier 1.0x

DPWH NAIA Expressway Project: Information Memorandum

C. PROJECT STANDARDS AND SPECIFICATIONS

DPWH NAIA Expressway Project: Information Memorandum

OUTPUTS OF THE DETAILED ENGINEERING DESIGN BY THE CONCESSIONAIRE

DPWH NAIA Expressway Project: Information Memorandum

III. PROJECT IMPLEMENTING AGENCY

k) Perform such other functions as may be provided by law.

DPWH NAIA Expressway Project: Information Memorandum

DPWH NAIA Expressway Project: Information Memorandum

IV. TRAFFIC ANALYSIS

DPWH NAIA Expressway Project: Information Memorandum

11,071 7,504 2,187

To ANDREWS AVE. From ANDREWS AVE.

ANDREWS AVENUE (NEAR AURORA ROAD)

ANDREWS AVENUE (NEAR DOMESTIC ROAD)

9-10AM 10-11AM 11-12AM

4-5PM 5-6PM 6-7PM

NAIA ROAD (SEASIDE DRIVE)

DPWH NAIA Expressway Project: Information Memorandum

FIGURE 5: Traffic Composition at the NAIA Terminal Main Gates

18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 -

Truck Bus Jeepney Car

DPWH NAIA Expressway Project: Information Memorandum

Manila-Cavite Coatal Road

LEGEND Less than 10km/hr 10km ~ 20km/hr 20km ~ 30km/hr Ov er 30km/hr

DPWH NAIA Expressway Project: Information Memorandum

V. RIGHT-OF-WAY AND RESETTLEMENT

B. RESETTLEMENT OF INFORMAL SETTLERS AND THE RESETTLEMENT ACTION PLAN

DPWH NAIA Expressway Project: Information Memorandum

VI. CONCESSION STRUCTURE

DPWH NAIA Expressway Project: Information Memorandum

VII. KEY COMMERCIAL FEATURES OF THE DRAFT TCA

DPWH NAIA Expressway Project: Information Memorandum

Concessionaire DPWH Concessionaire

Concessionaire and DPWH