DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT DEVELOPMENT BANK OF THE PHILIPPINES THE (LGU-UWSP) Project Brief 1/26/04 3:27 PM brief-matl-jan04.

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT

DEVELOPMENT BANK OF THE PHILIPPINES

THE

(LGU-UWSP)

THE

(LGU-UWSP)

Project BriefProject Brief

1/26/04 3:27 PM

brief-matl-jan04



PROJECT PRINCIPLES

PARTICIPATION CRITERIA

LOAN FEATURES

PARTICIPATING LGUs

PROJECT BACKGROUND

Sequence of PresentationSequence of Presentation





Consistent with the intent of the 1991 Local Government Code, Local Government Units are now responsible for planning, financing and implementing both urban and rural water supply.

Water Sector Major PolicyWater Sector Major Policy



LGUs are responsible for the implementation of Levels I, II and III;

LWUA is responsible for commercially viable water districts;

MWSS is responsible for Metro Manila and adjacent cities and municipalities;

DPWH and DOH is responsible for providing technical assistance to LGUs; andDILG is responsible for assisting LGUs on institutional development and project identification.

Delineation of ResponsibilitiesDelineation of Responsibilities



DBP: Borrower of the loan, on-lends the same to LGUs. Responsible for construction supervision through the CSC, fund management and credit evaluationDILG: Marketing of Project to LGUs, ensuring a rolling pipeline of LGU-applicants. Assistance in project preparation particularly the submission of ECC, RDC endorsement and other government clearances and approvals.

DOF: Monitoring lessons learned as input to future policy formulation in the sector

MOA: DOF-DILG-DBPMOA: DOF-DILG-DBP





Level III - PIPED WATER SYSTEM (HOUSEHOLD

CONNECTIONS)

Level I - point source (shallow well and deep well hand pumps and spring development) Level II - communal faucets or public tap stands

As differentiated from:

Type of ProjectType of Project



Local Government Units

Water Districts

Private Operators

Target Market of the ProjectTarget Market of the Project



1,602

364

TOTAL LGUs

TARGET LGUs

Target LGUsTarget LGUs



Investments shall be provided based on consumer demand (based on what consumers want and are willing to pay)

Management and operation of the water system shall be according to commercial principles

Tariffs shall be based on full cost recovery

Project PrinciplesProject Principles





Credit / Loan Technical

AssistanceWORLD BANK

WORLD BANK

LOAN AGREEME

NT

DBP DBP

LGULGU

Funds Source and UseFunds Source and Use



DBPDBP

SUB-LOAN AGREEME

NT

LGU LGU

Design-Build-Lease of SystemDesign-Build-Lease of System

DBL Document

DESIGN & CONST. CONTRACT

LEASE AGREEMENT

OPERATOR

OPERATOR



Bids for the design, construction and operation of water supply system are invited only from pre-qualified bidders.

The tariff levels are set in the agreement between the LGU and the operator.

SAFEGUARDS AND BENEFITSSAFEGUARDS AND BENEFITS




The LGU owns the assets, with the operator leasing them for the period of lease agreement.

SAFEGUARDS AND BENEFITSSAFEGUARDS AND BENEFITS

Before commencing operation of the completed system, the operator must provide performance guarantees to the LGU.




DBPDBP

AMORTIZATION

LEASE FEE

SUB-LOAN AGREEME

NT

LGU LGU


DBL Document

DESIGN & CONST. CONTRACT

LEASE AGREEMENT

OPERATOR

OPERATOR



DBPDBP LGU LGU OPERATOR

OPERATOR


LEASE FEE

P100 K

AMORTIZATION

P90 K

EQUITY RECOVERY

P10 K



The loan shall be based on the total project cost with at least 10% equity participation, provided, the loan amortization shall not exceed 20% of the total income of the LGU, net of other borrowings

PROJECT FINANCINGPROJECT FINANCING

AMOUNT OF LOANAMOUNT OF LOANFeatures of the Loan to LGUsFeatures of the Loan to LGUs The FS cost is 3% of the total construction

cost. The LGU’s counterpart during FS preparation is in the form of time and services of the members of the Project Management Unit

FEASIBILITY STUDYFEASIBILITY STUDY



TOTAL PROJECT COST COMPONENTSTOTAL PROJECT COST COMPONENTS

Feasibility Study Contract Price Physical Contingency Price Contingency Construction Supervision Cost Bank Charges (Interest During

Construction, Commitment Fee & Front-end fee)

Features of the Loan to LGUsFeatures of the Loan to LGUs



TERM OF THE LOAN

The maximum term of the loan shall be fifteen (15) years inclusive of three (3) years grace period on principal repayment

INTEREST RATE

9% per annum reviewable yearly but not to exceed 15% p.a.

Features of the Loan to LGUsFeatures of the Loan to LGUs



PRE-CONTRACT STAGE LOAN PROCESSING

FEASIBILITY STUDY

BIDDING

CONSTRUCTION OF WATER SYSTEM

OPERATION & MANAGEMENT

Project PhasesProject Phases



PRE-CONTRACT STAGE project presentation, submission of

documents by LGU, financial assessment

LOAN PROCESSING loan amount based on borrowing capacity to

cover for FS preparation and construction of water system

FEASIBILITY STUDY deployment of consultants, brgy meetings,

technical option, WTC, preliminary design, BOQ & cost estimates




BIDDING publication, pre-qualification, bidding

proper, PBAC resolution of award

CONSTRUCTION OF WATER SYSTEM Notice of award, mobilization, confirmation of

water sources, detailed engineering, construction of water system (source facilities, transmission, distribution lines, etc.)OPERATION & MANAGEMENT

lease agreement






6. Quezon, Isabela7. San Mateo, Isabela8. Lantapan, Bukidnon9. Kalilangan, Bukidnon

1. Magdalena, Laguna

2. Aurora, Isabela3. Cabatuan,

Isabela4. Luna, Isabela5. Mallig, Isabela

DBP Approved & Implemented ProjectsDBP Approved & Implemented Projects



1. Tabuk, Kalinga2. Calamba, Misamis Occidental3. Lopez Jaena, Misamis

Occidental

1. Castilla, Sorsogon2. Sinacaban, Misamis

Occidental

On-going ConstructionOn-going Construction

For Construction For Construction



1. Aurora, Isabela2. Cabatuan, Isabela3. Luna, Isabela4. Mallig, Isabela

For Re-bidding of OperatorFor Re-bidding of Operator 5. Quezon, Isabela

6. San Mateo, Isabela

7. Magdalena, Laguna

1. San Mariano, Isabela2. Carranglan, Nueva

Ecija 3. Claveria, Misamis

Oriental

For BiddingFor Bidding



Pipeline (For FS Completion)Pipeline (For FS Completion)

1. Maria Aurora, Aurora2. Sto. Niño, Cagayan3. Bolinao, Pangasinan4. Infanta, Pangasinan 5. Sigma, Capiz6. Sta. Cruz, Davao del Sur



Pipeline (For FS Preparation)Pipeline (For FS Preparation)1. Burgos, Pangasinan

2. Burgos, Ilocos Norte3. Prieto Diaz, Sorsogon 4. Bagamanoc, Catanduanes5. Talugtog, Nueva Ecija6. Palapag, Northern Samar7. Maripipi, Biliran8. Villareal, Western Samar9. Motiong, Samar



MAGDALENA, LAGUNA WATER

SYSTEM

Inauguration of Magdalena Water

System



LUNA, ISABELA WATER SYSTEM



QUEZON, ISABELA WATER SYSTEM



2. SB Resolution signifying participation in the project3. SB Resolution authorizing the Mayor and Treasurer to sign loan documents

4. Audited Financial Statements for the last 3 years (2000 to 2002)

5. Bio-data of the Mayor and Treasurer6. Customer Information Report (DBP Form)

1. Letter of Intent signed by the MayorChecklist of RequirementsChecklist of Requirements

7. Certificate of existing loans (term, Outstanding balance, amortization)





2. Processing and approval of FS loan by DBP-PMO

3. Creation of Project Management Unit by the LGU4. Sub-loan Agreement Briefing and kick-off meeting with Feasibility Study Consultant

5. Start of FS Preparation

1. Submission of Requirements by the LGU

Action PlanAction Plan

6. Submission of Letter to DBM for transfer of IRA (last quarter 2003)

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT DEVELOPMENT BANK OF THE PHILIPPINES THE (LGU-UWSP) Project Brief 1/26/04 3:27 PM brief-matl-jan04.

Documents

philippines department

philippines slide

local government level

local government code

local government bids

local government investments

philippines lgus

dbp slide