2013年-世界发展银行全球_Philippines___PPP_Options_in_Irrigation_Sector_115页_1mb

Summary of the Philippines: PPP Options in Irrigation Sector Report

Core Content

This report provides an analytical framework for the Philippines' Department of Agriculture (DA) to evaluate and implement Public-Private Partnerships (PPPs) in the irrigation sector. It outlines the current legal, institutional, and policy environment, identifies challenges, and proposes feasible PPP models that could enhance the financial sustainability and efficiency of irrigation systems.

Main Objectives

• To assess the viability of PPP as a tool for developing and modernizing the irrigation sector.
• To recommend policy and institutional reforms that would enable the effective use of PPP.
• To develop a practical framework for identifying and evaluating potential irrigation projects for PPP implementation.

Key Findings

1. Irrigation Sector Overview

• The irrigation sector is central to the Philippines' food self-sufficiency agenda.
• As of October 2012, the total irrigation service area is 1.57 million hectares.
• 45% of this area is under National Irrigation Systems (NIS), 32% under Communal Irrigation Systems (CIS), and the rest under other government or private funding.
• Irrigation systems primarily support rice production, accounting for 74% of 2011 palay production and 77% of 2012 production.
• The National Irrigation Administration (NIA) is the main agency responsible for irrigation development, including flood control, drainage, and hydropower.

2. Challenges in the Sector

• Financial sustainability is a major concern due to low irrigation service fee (ISF) collection rates.
• Inefficient management and poor maintenance contribute to network degradation and high rehabilitation costs.
• Low cropping intensity in NIS (around 1.2-1.5 crops per hectare) suggests over-optimistic feasibility assessments.
• Water distribution inefficiencies and inequitable fee structures create disincentives for farmers and private investment.

3. PPP Legal and Policy Environment

• The Agriculture and Fisheries Modernization Act (AFMA) of 1997 promotes PPP through BOT and mandates government guarantees for private partners.
• PPP has been used in infrastructure, including hydropower and water supply.
• The Casecanan Multipurpose Project and San Roque Multipurpose Project are early examples of BOT in irrigation, where private partners were paid via take-or-pay arrangements.

4. PPP Financing Practices

• Financial institutions in the Philippines are experienced and ready to support PPP projects.
• Domestic financing is sufficient, with no need for foreign capital.
• Long-term financing is a challenge due to the term limitations of loans from the banking sector.
• Solutions include resetting fees and tariffs and renewing lines of credit.

5. Private Sector Interest

• The private sector is interested in PPPs for hydropower and dam construction.
• However, lack of knowledge about irrigation service provision creates reluctance to engage in partnerships.

Proposed Analytical Framework

1. Three-Step Selection Process

1. Identify contractual arrangements that align with the goals of the partnership.
2. Screen potential projects based on criteria derived from the objectives.
3. Analyze feasibility of selected projects through risk assessment, financial simulation, and value-for-money analysis.

2. PPP Models and Their Characteristics

3. Financial Appraisal Scenarios

Policy Recommendations

• Experiment with different models to find the most effective PPP structure for irrigation.
• Use the dam as an entry point for PPP, especially for hydropower and water management.
• Expand the role of Irrigators Associations (IA) to facilitate PPP implementation.
• Leverage PPP as a strategic entry point for modernizing irrigation systems.
• Integrate rice policy with PPP to ensure alignment with food self-sufficiency goals.
• Strengthen social policies to address equity in fee collection and access to water.

Action Plan

• Implement experiments to test different PPP models.
• Reform policies to improve ISF collection and water distribution.
• Invest in infrastructure projects that align with the proposed analytical framework.
• Develop a roadmap for gradual implementation of PPP, starting with small-scale and high-impact projects.

Key Issues for PPP in Irrigation

• Fee collection and tariff setting must be reformed to ensure financial viability.
• Political interference in fee setting must be minimized.
• Efficient O&M is critical for long-term sustainability.
• Innovations in irrigation management are necessary to improve service delivery and reduce costs.

Conclusion

The report emphasizes that while PPP is not currently the most viable option for pure irrigation projects due to low ISF collection and poor financial returns, hydropower bundling and unbundling with NIA managing irrigation offer more promising models. The proposed analytical framework provides a practical and flexible approach to selecting and implementing PPP projects, focusing on risk mitigation, financial sustainability, and institutional capacity building. The DA, NIA, and NEDA PPP Center are recommended to take a leading role in this process.