Republic of the Philippines

Province of Cagayan
MUNICIPALITY OF BAGGAO

INFORMATION MEMORANDUM

2015
 DISCLAIMER

This Information Memorandum (“IM”) has been prepared by the Municipal Government of Baggao
(“Municipal Government”). While the drafters of this document exerted their best effort to provide
a fair and comprehensive description of the Project based on the Project Business Case and other
available information, 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, expressed or implied, is made, and no responsibility of any kind is

or will be accepted by the Municipal Government or the Government of the Philippines or any of
its agencies, with respect to the accuracy and completeness of this preliminary information. The
Municipal Government may amend or replace any of the information contained in this IM at any
time, without giving any prior notice or providing any reason.

In furnishing this IM, the Municipal Government 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
prior to the actual tender. Additional information shall be provided at appropriate times during the
formal tender process.

All information in this IM is qualified by the terms and conditions of the Instructions to Prospective
Bidders. All information in this IM shall also be qualified by the terms and conditions of the Instructions
to Bidders to be released to Pre-Qualified Bidders, and the Build-Operate-Transfer (“BOT”) Contract
and its Annexes, including the Minimum Performance Standards and Specifications (“MPSS”)
and its Annexes. Drafts of the BOT Contract and its Annexes will be made available to Pre-
Qualified Bidders. In case of any conflict between the information and terms in this IM and the
Instructions to Prospective Bidders and Instructions to Bidders, the information and terms in the
Instructions to Prospective Bidders and Instructions to Bidders shall prevail.

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 the Municipal Government or any other agency of the Philippine
Government.
PROJECT BACKGROUND

The Baggao Water Supply PPP Project (BWSP) to be undertaken as a Public-Private-Partnership

(PPP) initiative is one of the priority projects of the Municipality of Baggao. The project involves
the provision of potable piped water supply service to the households in the municipality; and is
inclusive of bulk water source development, transmission and distribution to individual household
level connections.

Baggao does not have a Level III water service (Level III water service is defined as a system
with distribution pipelines wherein individual metered service connections are tapped to supply
water to the customers directly through their faucets). Majority of the present population of
Baggao get their water through individual shallow wells.

The project is expected to serve initially 24 barangays, namely: Bitag Grande, Dabbac Grande,
Imurong, Mocag, San Francisco, San Jose (Urban), San Miguel and Tungel, Annayatan, Awallan,
Barsat East, Catugay, Dalla, Lasilat, Hacienda Intal, Nangalinan (East), Remus, San Isidro,
Santor, Taguntungan and Tallang (Urban), Asassi, Poblacion (Urban) and Temblique with Level
3 or piped water supply.

The water supply system will initially serve some 21,160 population out of the total municipal
population of 78,200 or service coverage of 27.6%.

PROJECT SITE OVERVIEW

About the Municipality of Baggao

Baggao is a first class municipality

located in the Province of
Cagayan, Region II (Cagayan
Valley). Based on the 2010
Census of Population and
Housing, Baggao recorded a total
population of 78,188 people,
making it the most populous
municipality/area next to
Tuguegarao City. Baggao is
politically subdivided into 48
barangays and has a total land
area of 920.60 square kilometers.

Baggao produces high yields of

rice, corn and tobacco, which are
considered its major agricultural
resources. Aside from farming, the
town is widely known for crafting furniture from Narra lumber, which is abundant in the locality.
Bounded by the Sierra Madre Mountains and the Pacific Ocean, Baggao is located 62 kilometers
north of the provincial capital of Cagayan, Tuguegarao City, and is approximately 517 kilometers
north of Metro Manila. The town boasts several scenic tourist attractions such as the Duba
Underground River and Cave in Barangay San Miguel; the Blue Water Falls and Cave in
Barangay Pallagao; and the Kamimundinan Falls in Barangay Sta. Margarita.

About the Project Site

Groundwater through deep wells is assumed to be the most viable source of water to meet the
expected project demand. The proposed project will consist of three (3) separate systems.
System 1 is assumed to be located in Barangay Tungel and will serve eight (8) barangays namely
Bitag Grande, Dabbac Grande, Imurong, Mocag, San Francisco, San Jose (Urban), San Miguel
and Tungel. System 2 is assumed to be located in barangay Tallang and will cover thirteen (13)
barangays namely, Annayatan, Awallan, Barsat East, Catugay, Dalla, Lasilat, Hacienda Intal,
Nangalinan (East), Remus, San Isidro, Santor, Taguntungan and Tallang (Urban). System 3 is
expected to be located in barangay Poblacion and will serve three (3) barangays namely, Asassi,
Poblacion (Urban) and Temblique.

The exact location of the three systems will be subjected to the results of the geo-resistivity study
that the Municipality of Baggao has already commissioned.

PROJECT SCOPE

The proposed project will be undertaken on a design-build-operate-and-transfer (BOT) scheme,

defined as follows: a contractual arrangement whereby a private proponent undertakes to
finance, design and construct, operate and maintain a new Level III water supply system for 25
years. Specifically the proponent is expected to (i) plan, finance, develop, design, and construct
the water supply facilities, including bulk water source, storage facilities, transmission and
distribution lines, except the service connections which will be shouldered by the customers. (ii)
manage, operate, repair and maintain these facilities, and (iii) to provide water supply services
during the period of operation, including the transfer of the facilities on termination of the
concession agreement.

The private proponent is allowed to charge tariffs to recover its capital and operation and
maintenance costs and a reasonable rate of return on the equity investment. The private
proponent shall transfer the facility to the Municipality of Baggao at the end of the concession
period at no cost to the recipient.

An Independent Consultant (“IC”) will be engaged for the Project. The IC shall be procured under
Republic Act 9184, otherwise known as the “Government Procurement Reform Act.” The fees of
the IC will be equally shared between the Municipality of Baggao and the private Proponent. The
responsibilities of the IC shall be provided to pre-qualified bidders together with the bid
documents.
BID PROCESS AND BID DOCUMENTS

Legal Framework

The bidding and implementation of the Project shall be conducted in accordance with Republic
Act (RA) No. 6957, as amended by RA No. 7718 ("BOT Law”), and its 2012 Revised Implementing
Rules and Regulations (“2012 Revised IRR”). The BOT Law is the primary law governing PPP in
the Philippines and provides the legal framework for government agencies to enter into PPP
contracts with qualified private sector proponents for the implementation of government
infrastructure and development projects.

Procurement Process

The competitive public bidding for the Project will be conducted in accordance with the BOT Law
following the two-stage process: (1) Pre-qualification Stage and (2) Bidding Stage. The detailed
process will be described in the Instructions to Prospective Bidders (“ITPB”).

Any individual, partnership, corporation or firm, whether local or foreign, including consortia of
local, foreign or local and foreign firms, may submit a bid provided they meet the pre-qualification
criteria defined in the ITPB. In the case of an Infrastructure or Development Facility whose
operation requires a public utility franchise, the proponent must be Filipino or, if a corporation,
must be duly registered with the Securities and Exchange Commission (SEC) and owned up to
at least sixty percent (60%) by Filipinos.

After publication of the Invitation to Pre-Qualify to Bid, prospective bidders may purchase, at the
cost of participation of Php 10,000, (a) this IM; and (b) the ITPB, including the required pre-
qualification forms.

After the Pre-qualification stage, pre-qualified bidders may secure the Instruction to Bidders
(“ITB”), which will include the draft BOT Contract and the MPSS. The technical study may be
made available to the pre-qualified bidders upon official request.
Indicative Timeline

SCHEDULE OF BIDDING ACTIVITIES DATES

Publication of Invitation to Pre-Qualify and October 7, 14 ,21, 2015

Bid
October 27, 2015
Investment Forum

Deadline for Submission of Letters of Intent

November 7, 2015 (9:00 a.m.),
& Pre- Qualification Requirements/ Start of
Office of the Mayor
Pre-Qualification Evaluation

November 23, 2015

Inform Pre-Qualified & Disqualified Bidders

Project Briefing and Pre-Bid Conference December 14, 2015 (3:00 p.m.),
Office of the Mayor

One-on-One Meetings TBD

Deadline for Purchasing of Bid Documents in December 3, 2015 (9:00 a.m.),
the Amount of PhP 10,000 Office of the Mayor

January 13, 2016 (9:00 a.m.),

Deadline for Submission of Bid Proposals
Office of the Mayor

For more information, please contact the Project Secretariat at 0918-9363-090/0917-7998-363

or e-mail esbitamug 2 @ yahoo.com.ph/casalvador_0619 @ yahoo.com. ph