Tourism Infrastructure and

Enterprise Zone Authority

Development and Management of the

Balicasag Island Dive Resort Project

Project Information Memorandum

November 11, 2019

 DISCLAIMER

The information contained in this Project Information Memorandum (the “PIM”) and
other documents subsequently provided to all Interested Proponents, whether verbally
or in documentary or any other form, by the Tourism Infrastructure and Enterprise Zone
Authority (the “TIEZA”), or by the Joint Venture – Selection Committee (the “JV-SC”) on
behalf of the TIEZA, is provided to the Interested Proponents on the terms and conditions
set out herein and such other terms and conditions subject to which such information is
provided.

The PIM is not an agreement between the TIEZA and the Interested Proponent or any
other person. The purpose of the PIM is to provide interested parties with information
that may be useful to them in making their bids. The PIM includes statements, which
reflect various assumptions and assessments arrived at by the TIEZA in relation to the
Project, as defined herein. Such assumptions, assessments and statements do not purport
to contain all the information that each Interested Proponent may require. The PIM may
not be appropriate for all persons, and it is not possible for the TIEZA or the JV-SC to
consider the investment objectives, financial situation and particular needs of each party.
The assumptions, assessments, statements and information contained in the PIM and
associated documents may not be complete, accurate, adequate or correct. Each
Interested Proponent should therefore conduct its own investigation and analysis and
should check the accuracy, adequacy, correctness, reliability and completeness of the
assumptions, assessments, statements and information contained in the PIM and obtain
independent advice from appropriate sources.

Information provided here is on a wide range of matters, some of which may depend upon
interpretation of law. The information given is not intended to be an exhaustive account
of statutory requirements and should not be regarded as a complete or authoritative
statement of law. The TIEZA or the JV-SC accepts no responsibility for the accuracy or
otherwise for any interpretation or opinion on law expressed herein.

The TIEZA or the JV-SC makes no representation or warranty and shall have no liability
to any person, including any Interested Proponent, under any law, statute, rules or
regulations, principles of restitution or unjust enrichment or otherwise for any loss,
damages, cost or expense which may arise from or be incurred or suffered in its
participation in the Bidding Process or on account of anything contained in the PIM or
otherwise, including their accuracy, adequacy, correctness, completeness or reliability
and any assessment, assumption, statement or information contained therein or deemed
to form part thereof or arising in any way for participation in the Bidding Process.

The TIEZA or JV-SC also accepts no liability of any nature whether resulting from
negligence or otherwise howsoever caused arising from reliance of any Interested
Proponent upon the statements contained in the PIM.
 1. Context

The Balicasag Island

The tourism sector in the Philippines is ever growing with its 9% growth rate from
2017 to 2018, totaling 7 million foreign visitor arrivals in 20181. The Central Visayas
(Region VII), known for its historical sites and islands, has the highest demand for
travelers. The region welcomed more than 8 million foreign and local visitors in
20182, with Province of Bohol contributing approximately 1.5 million visitors.

Panglao Island, one of the municipalities in the Province of Bohol, is famous for its
diving locations and white sand beaches. Dive sites are abound around the Panglao
Island, including Napaling, Doljo Point, Garden Eels, Arco Point, and Balicasag Island.

Specifically, the Balicasag Island is hailed as one of the best dive sites in the country.
It can be reached in 20 minutes via speedboat from Panglao Island. It is approximately
25 hectares and is considered as a marine reserve and tourist zone. Throughout the
years, the island has become a tourist attraction for its distinct diving area, clear blue
waters, and warm hospitality of the locals. The mushroom-shaped coral island has
five (5) diving sites to offer, namely, (i) Black Forest, (ii) Cathedral or Royal Garden,
(iii) Divers Heaven, (iv) Rico’s Wall, and (v) Rudy’s Rock. The depth of the diving sites
ranges from 3 to 45 meters, which allows snorkeling to some of its areas. It caters to
various types of corals, fishes, turtles, among other sea creatures.

Picture 1. Balicasag Island (Source: TIEZA)

1
Department of Tourism (DOT) Visitor Arrivals to the Philippines by Country of Residence (2018)
2
DOT Regional Distribution of Overnight Travelers in Accommodation Establishments (2018)
 Picture 2. Balicasag Island Dive Resort (Source: TIEZA)

Tourism Infrastructure and Enterprise Zone Authority

TIEZA is a government corporation created by virtue of Republic Act No. 9593 or the
Tourism Act of 2009 on May 12, 2009, replacing the Philippine Tourism Authority
(PTA). TIEZA is mandated to continue the functions previously exercised by PTA
under Presidential Declaration 564, unless otherwise inconsistent with the provisions
of RA 9593.

TIEZA acts as the Department of Tourism’s implementing arm in providing support

infrastructures and facilitating investments in tourism enterprise zones (TEZ)
nationwide. This is carried out through its main functions — infrastructure
development; designation, regulation and supervision of TEZs; management of its
existing assets or facilitation of their privatization; and administration of the
collection of the Philippine Travel Tax.

As the country’s builder of tourism infrastructures, TIEZA brings development to

areas with high cultural, historical, religious, heritage and/or eco-tourism values,
helping shape a deep sense of awareness and pride for the Filipino’s traditions,
natural bounties and uniqueness as a race.

The mandate of TIEZA include:

1. Designate, regulate, and supervise the Tourism Enterprise Zones (TEZ’s)

established under the Act;
2. Develop, manage, and supervise tourism infrastructure projects in the
country;
3. Supervise and regulate the cultural, economic and environmentally
sustainable development of TEZs towards the primary objective of
encouraging investments therein;
4. Ensure strict compliance by the TEZ Operator with the approved development
plan. Pursuant thereto, the TIEZA shall have the power to impose penalties for
failure or refusal of the tourism enterprise to comply with the approved
 development plan, which shall also be considered a violation of the terms of
registration; and
5. Continue to exercise functions previously exercised by the PTA under
Presidential Decree no. 564, not otherwise inconsistent with the other
provisions of the Act.

Joint Venture

In recognition of the integral role of the private sector in nation building, TIEZA
implemented the Public-Private Cooperation Program which include the issuance of
the TIEZA Joint Venture Guidelines for selected TIEZA properties and TEZs.

On August 29, 2019, the TIEZA Board of Directors approved the Joint Venture
Guidelines pursuant to the provisions of Republic Act No. 9593 or the Tourism Act of
2009, as affirmed by the Office of the Government Corporate Counsel. Through this
program, TIEZA can secure more private sector support in financing, managing, and
operating tourism facilities.

2. Project Overview

The development and management of the Balicasag Island Dive Resort (the “Project”)
is to be undertaken through Public-Private Partnership (PPP) in accordance with the
TIEZA Joint Venture Guidelines5.

The Balicasag Island Dive Resort is a diving destination and accommodation facility
operated by TIEZA since 1989. It is currently composed of the following operational
infrastructure facilities (the “Project Facilities”):

 Cottage and dormitory type accommodation (10 duplex cottages, 2 family

rooms and 4 dormitory rooms);
 Restaurant for 40 guests;
 Dive Shop;
 Function Hall for 100 guests;
 Picnic huts;
 Administrative Office; and
 Staff house.

Through this Project, TIEZA aims to further develop Balicasag Island Dive Resort in a
sustainable manner. The benefits expected from the Project include:

 Improvement of the dive resort and support facilities that will ensure
compliance with environmental and ecological safeguards;
 Promotion of the diving spot to new markets;
 Increased number of local and foreign tourists within the prescribed carrying
limits, as well as increased tourist spending; and
 Additional employment opportunities

5
The TIEZA JV Guidelines can be accessed at https://tieza.gov.ph/assets-management/investment/list-of-tieza-properties/
Subject to change, the key elements of the PPP transaction are summarized in Table 1
below.

Table 1. Project Overview

Indicative Feature Terms
Project Scope The scope of the Project includes the development and
management of BIDR in order to upgrade the facilities
of the asset, improve efficiency in operations, and
create significant contribution to a thriving and
sustainable tourism in the area. Specifically, the Project
may include the following:

 Rehabilitation and expansion of the

accommodation capacity of the Project
Facilities;
 Operation and maintenance of the Project
Facilities;
 Provision of additional water sports activities
and/or island tours; and
 Other resort infrastructures and management
strategies
Concession Period 25 years

Project Structure Contractual Joint Venture (JV)

Revenue Source To be determined by the Winning Bidder based on the

proposed development which may include:

 Island accommodation
 Transportation operation
 Food and Beverage operations
 Water sports operation
 Other related amenities

Bid Parameter To be disclosed in the Terms of Reference

Minimum Initial Annual- To be disclosed in the Terms of Reference

Fixed Fee for TIEZA

TIEZA’s Share On Gross To be disclosed in the Terms of Reference

Revenue from
Operations
 Capital Investment Proponent shall adhere to the following parameter on
project implementation:

A capital investment of P 110,000,000 shall be invested

on the expansion and upgrading of facilities, with
TIEZA’s approval

Performance Bond Proponent shall post a Performance Bond upon signing

of the Agreement/Contract representing the Minimum
Capital Investment; refundable upon project
completion.

Amount of Performance Security if in the form of

Manager’s Check/Cash Performance Bond/SLC
10% based on the 30% based on the
Nominal Committed Nominal Committed
Capital proposed to be Capital proposed to be
infused during the 1st 25 infused during the 1st 25
years proposed by the years proposed by the
Winning Bidder Winning Bidder

3. Competitive Selection Timetable

The key dates for the competitive selection process are outlines in Table 2 below.

Table 2. Competitive Selection Timetable

Milestone Indicative Date
Submission and Acceptance of Initial Required November 13, 2019 12;00 NN –
Documents December 26, 2019
12:00 NN
Deadline of Submission of Eligibility January 10, 2020
Documents 12:00 NN
Evaluation of Eligible Proponents January 10, 2020
2:00 PM
Notice of Results to Eligible and Non-eligible January 13, 2020
Proponents
Issuance of TOR to Eligible Proponents January 20, 2020
Pre-selection Conference February 4, 2020
2:00 PM
Deadline for Submission of Technical and March 9, 2020
Financial Proposals 12:00 NN
Opening of Technical Proposal March 9, 2020
2:00 PM
Presentation to JVSC of Technical Proposals by March 12, 2020
Eligible Proponents
 Release of Results of the Evaluation of March 16, 2020
Technical Proposals
Opening and Evaluation of Financial Proposals March 17, 2020
2:00 PM
Approval of Winning Proponent May 2020

4. Points of Contact

The Secretariat for the Technical Working Group (TWG) and the Public-Private
Partnership Center may be contacted through the following information:

Ms. Reyna A. Palacay

Project Officer
Balicasag Island Dive Resort
Address: 7th Floor, Tower 1, Double Dragon Plaza, Double Dragon Meridian Park
Macapagal Avenue corner EDSA Extension, 1302, Bay Area, Pasay City
Tel: 8249-5900 to 79 local 733/735
E-mail: jvsc.secretariat@tieza@gov.ph
Website: www.tieza.gov.h
Ms. Justine E. Padiernos
Officer-in-charge- Director III
PROJECT DEVELOPMENT SERVICE
Public-Private Partnership Center
Address: 8th Floor, One Cyberpod Centris, EDSA cor. Quezon Avenue, Brgy. Pinyahan,
Quezon City
Tel: (+632) 8709-4146 loc 6301 or 6102
E-mail: jepadiernos@ppp.gov.ph or jzzafe@ppp.gov.ph
Website: www.ppp.gov.ph