GROUP 5 REPORT

Submitted to: Engr. Leonel Enriquez

V-ACE

Submitted by: Group 5

Naldoza, Ricardo Jr.

Necesario, Vanjoe

Nieva, Rommel

Octavo, Arvelin

Pruel, John Philip

Puyong, Josephine

Reyes, Terence James

July 17, 2019

A. Infrastructure Financing
BUILD AND TRANSFER MODEL
By: John Philip Pruel
Build-and-Transfer (BT): a contractual arrangement whereby the concessionaire undertakes the financing
and construction of a given infrastructure or development facility and after its completion turns it over to
the Government Agency or Local Government unit concerned, which shall pay the proponent on an agreed
Schedule its total investments expended on the project, plus a reasonable rate of return thereon. This
arrangement may be employed in the construction of any infrastructure or development project,
including critical facilities which, for security or strategic reasons, must be operated directly by the
Government.

For a BT contract, on completing the construction of an infrastructure facility, investor(s) will transfer such
facility to the State and the State

(i) will facilitate implementation of other project(s) by the investor(s) in order to recover the
investment capital and earn profit; or
(ii) will make payments to the investor(s) under the agreement in the BT contract.

Infrastructure financing involves the costs for the provision of capital, both of capital itself and the
services for the financing arrangements required (O’Brien and Pike, 2015).

From: Funding the Greek Crisis, 2018

Build and Transfer or Annuity Type

Main Features:
  Private company finances the infrastructure.
 Private company builds the infrastructure.
 Upon completion of construction, the infrastructure is transferred to the government.
 Government pays the private company on an agreed schedule the total cost, plus a reasonable
markup.

Risk transfers:

 Private company only assumes construction risks.

 No equity risk is borne by the private company.

Access to private finance:

 Much greater infusion or private capital i.e. for construction.

Ownership:

 Government

BUILD OPERATE TRANSFER MODEL

By: Rommel Nieva
Build Operate Transfer Model

A type of arrangement in which the private sector builds an infrastructure project, operates it and
eventually transfers ownership of the project to the government. In many instances, the government
becomes the firm’s only customer and promises to purchase at least a predetermined amount of the
project’s output. This ensures that the firm recoups its initial investment in a reasonable time span.

Parties Involved in BOT

The host government: Normally, the government is the initiator of the infrastructure project and
decides if the BOT model is appropriate to meet its needs. In addition, the political and economic
circumstances are main factored for this decision. The government provides normally support for the
project in some form.

The concessionaire: The project sponsors who act as concessionaire create a special purpose
entity which is capitalized through their financial contributions.

Lending banks: Most BOT project are funded to big extent by a commercial debt. The bank will be
expected to finance the project on “non-recourse” basis meaning that it has recourse to the special
purposes entity and all its assets for the repayment of the debt.

Other lenders: The special purpose entity might have other leaders such as national or regional
development banks.

Parties to the project contracts: Because the special purposes entity has only limited workforce,
it will subcontract a third party to perform its obligations under the concession agreement. Additionally,
it has adequate supply contracts in place for the supply of raw materials and other resources necessary
for the project.

BOT Engagement model

Build

Set up facilities and infrastructure, staff the development center, and establish knowledge transfer.

Operate

Manage the offshore organization: Program Management, Development, Maintenance, QA,

Enhancements, and Complete support; Process Expertise

Transfer

Register a new offshore subsidiary for the customer, transfer assets, and handover operations.

HOW IT WORKS?

The Public sector partner contracts with a private developer typically a large corporation or
consortium of businesses with specific expertise to design and implement a large project. The public
sector may provide limited funding or some other benefit (such as tax exempt status) but the private
sector partner assumes the risks associated with planning, constructing, operating and maintaining the
project for a specified time period. During that time, the developer charges customers who use the
infrastructure that been built to realize a profit at the end of the specified period, the private sector
partner transfer ownership to funding organization, either freely or for an amount stipulated in the
original contract. Such contracts are typically long term and may extend to 40 or more years.

RISKS INVOLVED

Some types of the most common risks involved:

• Political Risk – Specially in developing countries because of the possibility of dramatic overnight
political change.

• Technical Risk – Construction difficulties, for example, unforeseen soil conditions, breakdown of
equipment.

• Financing Risk – Foreign exchange rate risk and interest rate fluctuation (change in the price of
raw materials), market risk (over the price of raw materials), income risk (over-optimistic cash
flow forecast), cost overrun risk.

BUILD-LEASE-TRANSFER
By: Reyes, Terence James R.
What is Build, Lease, Transfer (BLT)

 Financing arrangement in which a developer

◦ (1) designs and builds a complete project or facility (such as an airport, power plant,
seaport),
 ◦ (2) sells it to the government or a joint venture partner,

◦ (3) simultaneously leases it back (usually for 10 to 30 years) to operate it as a business

and, after the expiry of the lease,

◦ (4) Transfers it to the government or partner at a previously agreed upon or market price.
See also build, own, operate, and transfer.

According to REPUBLIC ACT NO. 7718 "SEC. 2. Definition of Terms

 "[e] Build-lease-and-transfer. - A contractual arrangement whereby a project proponent is

authorized to finance and construct an infrastructure or development facility and upon its
completion turns it over to the government agency or local government unit concerned on a
lease arrangement for a fixed period after which ownership of the facility is automatically
transferred to the government agency or local government unit concerned.

Advantages and Disadvantages:

 Advantages :

◦ Government can boost and improve the facilities construction for the public use.

◦ Private partners have opportunities to recover their investments through payment made
by government such as rental fees, and other during the concession period.

◦ Ownership of the facility will be transferred to the government upon the completion of
construction, and the concessionaire is granted the right to operate the facility payments
based on its operational performance for a specified period of time.

 Disadvantages :

◦ Infrastructure or services delivered will be more expensive because of the developer

become the funder and run the construction project.

◦ Project agreements are long-term complicated, and comparatively inflexible because of

the impossibility to envisage and evaluate all particular event that could influence the
future activities.

B. Legal and Regulatory Requirements

BUILDING CODE
By: Ricardo Naldoza
BUILDING CODE

• also building control or building regulations

• is a set of rules that specify the standards for constructed objects such as:

• buildings and

• non - building structures

Code of Hammurabi

• where the earliest known written building code is included

• which dates from circa 1772 BC

Main Purpose

• to protect public health, safety and general welfare

The building code becomes law of a particular jurisdiction when formally enacted by the appropriate
governmental or private authority.

Building codes are generally intended to be applied by:

• architects

• engineers

• interior designers

• constructors and

• Regulators

but are also used for various purposes by:

• safety inspectors

• environmental scientists

• real estate developers

• subcontractors

• manufacturers of building products and materials

• insurance companies

• facility managers

• tenants and others

ZONING REGULATIONS
By: Puyong, Josephine A.

Zoning Regulations

 Zoning regulations specify whether zones can be used for residential, commercial, institutional or
open space purposes, that may also regulate lot size, placement, bulk (or density) and the height
of structures.

 Zoning consists of dividing a particular region of land into districts or zones and specifying the
types of land uses that are allowed and prohibited for each zone. This is performed by the County
and is typically specific to certain unincorporated areas. Zoning, in its basic form, attempts to
separate residential property use from other property uses.

 Zoning ordinances and regulations control how you can use your property. Cities, counties,
townships, and even state governments use zoning laws to guide development and shape the
community. These laws directly impact most property owners. Before you buy or develop real
property, you need to be familiar the zoning regulations that apply.

Why Zoning Is a Big Issue ?

 Zoning comes into play on every single real estate development, big or small. So if you are thinking
about buying property or making improvements to property that you own, you'll need and want
 to know how zoning laws fit into your plan. If you fail to find out what uses are allowed as a first
step, it can be an expensive mistake if it turns out zoning prohibits your development. Not only
can you be forced to remove any improvements made to the property that violate the zoning
regulations, you can also be fined and face a code enforcement action.

 Zoning also impacts the value of a given piece looking to build a subdivision. And depending on
how productive the land is for agriculture, it may have limited value for farming, too. If you find a
piece of vacant land that seems ideal for a rural subdivision, but later find out is zoned for
agricultural use and cannot be divided, you may be stuck with a bare piece of land with no
development potential.

Zoning Districts and Land Uses

 Many of what ways in which owners use their land are incompatible with each other. For example,
most people living in a sleepy residential neighborhood do not want a heavy industrial use, like
an oil refinery, right next door. Similarly, many farm uses, which can be noisy, dusty, and stinky,
are not compatible with residential uses. To guide certain types of development and avoid conflict
between, zoning regulations have been adopted in most areas.

Land Use Requirements and Restrictions

 Where there is zoning, land is classified into specific districts. Common classifications include:

 residential

 commercial

 industrial

 agricultural, and

 recreational.
Different Uses in Different Zones

 For each zoning district, the zoning ordinance will list allowable uses. In most cases, each
allowable use will be listed as a “Permitted Use” or “Conditional Use” (or some variation of those
terms).

 Permitted uses are allowed outright, but may still require a permit. Conditional uses are subject
to review by the local government. In many cases, the government will impose conditions on the
use (for instance, extra parking or stormwater control).

Development Standards Also Apply

 For a use to be approved, it must comply with the development standards in the applicable zoning
ordinance. Development standards include design requirements and other criteria that control
the manner in which a development must be completed. These standards vary depending on the
specific use at issue. Development standards can include:

Development Standards Also Apply

 height restrictions

 building setbacks

 minimum lot size

 lot coverage

 density
  transportation and access

 parking

 building and landscape design, and

 drainage.

Subdivisions

Subdivision laws may mandate the subdivision be developed to meet:

 minimum lot size requirements (for example, 7,000 square feet)

 street specifications

 utility requirements, and

  density requirements.

ENVIRONMENTAL REGULATION
By: Vanjoe O. Necesario
Environmental Regulation

 Also known as “Environmental and Natural Resource Law”

 It focuses on protecting specific natural resources such as forest, minerals, fisheries and
many more.

Environmental Protection

 Environmental Protection in Construction

1. Storm Water Pollution

2. Endangered Species

3. Vegetation

4. Wetlands

5. Historical or Cultural Artifacts

Storm Water Pollution

 As a result of construction, the soil is displaced from its original location in which can possibly
cause environmental problems in future. Runoff can occur during storms which can possibly
transfer harmful pollutants through soil to rivers, lakes, wetlands and coastal waters.

Endangered Species
  If endangered species have been found on the construction site, the site must be shut down for
some time. The construction site must be shut down for as long as it takes for authorities to make
a decision on the situation. Once the situation has been assessed, the contractor makes the
appropriate accommodations to not disturb the species.

Vegetation

 There may often be particular trees or other vegetation that must be protected on the job site.
This may require fences or security tape to warn builders that they must not be harmed.

Wetlands
  The contractor must make accommodations so that erosion and water flow are not affected by
construction. Any liquid spills must be maintained due to contaminants that may enter the
wetland.

Historical or Cultural Artifacts

 Artifacts may include arrowheads, pottery shards, and bones. All work comes to a halt if any
artifacts are found and will not resume until they can be properly examined and removed from
the area.
CONTRACT LICENSING LAWS
By: Arvelin M. Octavo
“The Contractor’s License Law: R.A. 4566 provides that no contractor (including sub-contractor and
specialty contractor) shall engage in the business of contracting without first having secured a PCAB
license to conduct business. It is an offense to engage in contracting business without a license first being
obtained.”

All architects and engineers preparing plans and specifications for work to be contracted in the Philippines
shall stipulate in their invitation to bidders, whether a resident of the Philippines or not, and in their
specifications that it will be necessary for any bidder, whether contractor, sub-contractor or specialty
contractor, to have a license before his bid is considered.

The purpose of the Contractors License Law (R.A. 4566) is to ensure, for the safety of the public, that only
qualified and reliable contractors are allowed to undertake construction in the country. The law also aims
to promote for the benefit of the public and private sectors and for the national interest, the orderly
growth of the contracting sector and the upgrading of construction capability.

The law was enacted in 1965 to ensure for the safety of the public that only qualified and reliable
contractors are allowed to undertake construction in the country, meaning those obtaining the Philippine
Contractors Accreditation Board (PCAB) License.

The Philippines Construction Association (PCA Metro), accredited by PCAB, believes that the lack of
compliance in obtaining the PCAB License creates a dangerous imbalance in the construction industry
affecting the credibility, legitimacy and competitiveness of the industry locally and also globally. Therefore
they do not hesitate to denounce publicly the unlicensed companies. Furthermore, PCA Metro launched
a campaign untitled “Report an unlicensed contractor” to allow the public and fellow contractors to
anonymously provide details of unlicensed contractors for PCAB action.

WHAT ARE THE TYPES OF CONTRACTOR'S LICENSE?

Regular license - issued to a domestic construction firm (a sole proprietorship/partnership/corporation

with at least 60% Filipino equity.

Special license - issued to a joint venture, a consortium, a foreign contractor, or a project owner who
authorizes the licensee to engage only in the construction of a single, specific project/undertaking.

C. Developments in Construction Methodologies

CONSTRUCTION INDUSTRY TRENDS IN 2018 THAT WILL CARRY OVER INTO 2019

1. Technology Advancements and Integration

Construction project management software is getting better and better with more features. Many
project management solutions are bundling scheduling, project management and time in order
to better serve construction companies.
Drones usage is becoming more popular with construction companies as drones themselves
become cheaper. Drones and aerial photography are useful for getting photographs and video of
the landscape. They are increasing safety around the job site and can add more information to
survey data.
2. Green Technology in Construction
Green construction is a way of building projects in an environmentally responsible and resource-
efficient way. It covers from planning to design, to construction, maintenance, and demolition. By
constructing environmentally friendly buildings and focusing on the longevity of the building, it is
better for the environment.
Along with green construction methods, there is an increase in research into green construction
projects. There are carbon scrubbing building facades, bricks made of recycled cigarette butts,
thermally driven air conditioners and asphalt that will heal itself.
3. Increase in Modular and Prefabricated Construction Projects
Modular construction is a prefabricated approach to building repetitive structures. Prefabricated
and modular construction is a rising trend because of the amount of material, time, and flexibility
of it. Modular construction has the ability to save companies a lot of time and money. Because
units are built off campus in a factory, companies do not have to worry about the weather. The
units also recycle material they don’t end up using or even excess material. This helps us cut back
on waste which is currently undergoing a big push at the moment. And they can build units that
meet your exact specifications quickly and easily.
4. Increasing Material Cost
Prices were predicted to increase by 2-3% in the course of 2018. Construction companies were
bracing for what these costs would mean to them and preparing for ways to stay competitive
within the industry. The big rising costs were in Iron and Steel, Steel Mill Products, and Softwood
lumber.
5. Decreased Labor Force
The main problem with it is that there are many projects, but production has slowed or stalled
due to the labor shortage. While this is why companies are turning to modular and prefabricated
construction in order to make project deadlines, it doesn’t change the dwindling number of
workers.
6. Better Safety Equipment
With the rise in new equipment, there will also be a rise in standards. Due to the hiring number
of accidents and deaths related to construction, it’s clear that there will be a push for better safety
equipment.
There are work boots that can connect to Wi-Fi, send their GPS coordinates, and can even tell if
users have fallen or are tired. The technology used in moisture-wicking fabric and cooling vests
are also getting lighter and more effective. And with drones and other surveying equipment, it is
easier to see other problem areas of a job site. This will help keep more of the workers safe on a
site and bring about a new era in construction safety.
7. Sustainability
Sustainable construction can include the preservation of the environment, an efficient use of
resources, with an eye to social progress and culture. These can include buildings with ways for
natural light to reach the middle of the building, thereby reducing electrical costs or buildings that
reuse water from the sinks in the toilet.
8. Project Management Solutions
Project management solutions now can have a time solution, equipment rentals, change orders,
and other more traditional project management options. Project management software can keep
 all documents related to the project in one location, which can help subcontractors and
contractors get paid at the end of a project.
9. Building Information Modeling
BIM is a way of representing buildings, roads, and utilities. It is a process of generating and
managing computer representations of the projects before they are built. Architects and
Engineers can use the models to show how building materials will hold up overtime. And owners
can create maintenance schedules with BIM models.