DepEd PPP bid, a success

An August 16, 2012, press release from the Department of Education

The results of today’s opening of financial proposals by the Department of Education (DepEd) for its Public Private Partnership for School Infrastructure Project (PSIP) reveal a successful bid.

The PSIP is a build-lease transfer contract for the design, construction, and maintenance of 9,301 classrooms (with toilets and furniture) in Regions I, III, and IV-A for a period of ten years.

The submitted bid prices are lower than the total Approved Budget for the Contract (ABC) of P16.4 billion.

Region

Number of Classroom Packages

Lowest Complying Bidder

Annual Lease Payments

I

2,157

BF Corporation – Riverbanks Development Corporation

P344,590,312.00

III

2,885

Citicore Investment Holdings, Inc. – Megawide Construction Corporation, Inc.

P522,989,913.60

IV-A

4,259

Citicore Investment Holdings, Inc. – Megawide Construction Corporation, Inc.

P760,490,438.40

The ABC for PSIP was derived using the DepEd’s cost for single and two-storey classroom construction, considering efficiencies brought about by the use of new technologies in construction and by economies of scale. This translates to a cost of P620,812 per single storey classroom, inclusive of toilets and furniture; and a cost of P1,062,890 for a two-storey classroom, inclusive of toilets, and furniture.

Of the required 9,301 classrooms, 69 percent are two-storey buildings, while 31 percent are single-storey buildings.

Since the Project is a lease, other costs are factored in such as maintenance costs, financing costs, and taxes. The inclusion of periodic maintenance every 4.5 years ensures the durability of the structures and helps extend their design life. The financing costs, on the other hand, represent the cost of using private sector money to construct the classrooms today and pay it back over a period of ten years. Meanwhile, although tax payments are factored in the cost, these ultimately revert back to government as part of internal revenues.

Of the six prequalified bidders, BF Corporation-Riverbanks Development Corporation and Citicore Investment Holdings-Megawide Construction Corporation submitted technical and financial proposals for the Project. The technical submissions of these two bidders were opened last July 18, 2012.

After close review and evaluation, the Prequalification, Bids and Award Committee and its Technical Working Group found that the two technical proposals, including the mock up structures constructed in Malolos City, Bulacan, are compliant with the PSIP’s Minimum Performance Standards and Specifications.

“Many are called but few are chosen,” said Secretary of Education Br. Armin A. Luistro FSC as he congratulated the bidders and thanked all the agencies that helped the Department reach this milestone. “What was once unimaginable—closing classroom shortage—is finally within our reach.  Now we can say that it is possible because we worked together and we did this for over 20 million young people, to provide them access to quality education.”

“We have always been at the fore of groundbreaking this (PPP) process, now we can truly push for real public-private partnership—an engagement that goes beyond a purely business venture but one that engages the rest of the nation in planting seeds of hope,” Luistro added.

The DepEd expects to issue the Notice of Award to the two bidders within the next four weeks.

deped.gov.ph

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