KnowledgeProduct_39_303_Esperanza%20Nov%202005

Esperanza,Sultan Kudarat

LGU-Civil SocietyPartnership for Improved

Public Terminal Management

LGU-Civil Society Partnership for Improved Public Terminal Management in Esperanza, Sultan Kudarat Copyright © 2005 Philippines-Canada Local Government Support Program (LGSP) The Philippines-Canada Local Government Support Program encourages the use, translation, adaptation and copying of this material for non-commercial use, with appropriate credit given to LGSP. Although reasonable care has been taken in the preparation of this book, neither the publisher and/or contributor and/or editor can accept any liability for any consequence arising from the use thereof or from any information contained herein. Printed and bound in Manila, Philippines Published by: Philippines-Canada Local Government Support Program Unit 1507 Jollibee Plaza Emerald Ave., Pasig City 1600 Philippines Tel. Nos. (632) 637-3511 to 13 www.lgsp.org.ph This project was undertaken with the financial support of the Government of Canada provided through the Canadian International Development Agency (CIDA).

LGU-Civil Society Partnership for Improved Public Terminal Management ESPERANZA, SULTAN KUDARAT

Philippines-Canada Local Government Support Program (LGSP) Documentation of LGU Exemplary Practices

Replicable Practice

LGU-CIVIL SOCIETY PARTNERSHIP FOR IMPROVED PUBLIC TERMINAL MANAGEMENT

IN ESPERANZA, SULTAN KUDARAT

(3RD Class Municipality)

CONTENTS

Summary

2

Project Description: Addressing a long-standing problem

2

History: Making civil society a partner

4

Results: a successful LGU-CSO partnership

4

Key Implementation Steps

6

Analysis and Lessons Learned: Sustaining a successful partnership

9

Annexes:

Annex A – Requirements for Prequalification and Invitation to Pre-qualify and Bid

Annex B – Memorandum of Agreement between the LGU and EMVMPC

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SUMMARY The public transport terminal project in Esperanza, Sultan Kudarat exemplifies how a municipal government can turn over the management of a public economic enterprise to a civil society organization (CSO) and reap the benefits of such a venture, in terms of improved management and profit. Esperanza’s public terminal1 had been managed by a private contractor for years without turning a profit while being a constant source of headache for the LGU. In an attempt to solve the problem, Esperanza’s local government decided in 2002 to re-bid the terminal’s management and invite CSOs to participate. The Esperanza Market Vendors Multi-Purpose Cooperative (EMVMPC) won the contract in December 2003. Since then, the local government of Esperanza has been receiving a net income of P685.95 per day or more than Php20000 a month from EMVMPC’s terminal operations, without having to field any LGU employees, or being involved in the day-to-day operations and maintenance of the terminal. In addition, EMVMPC has also reaped the benefits of its decision to forge a partnership with the LGU and take on the responsibility of managing the terminal. It has posted significant additional income from the enterprise, and built up its organizational capacities for public enterprise management. Membership in the cooperative has grown, with more investors joining the group and establishing small businesses such as food and cafeteria stands around the terminal. At the same time, commuters and other terminal clients are enjoying the services and facilities of a better-managed public terminal. The terminal is clean and traffic has eased due to new regulations and transport drivers being more willing to follow traffic rules, thanks to improved relations with the EMVMPC management. Project Description: Addressing a long-standing problem From the early 1980s to the latter part of 1995, the public terminal along the public highway was managed by the local government unit (LGU) of Esperanza in Sultan Kudarat province.

1 Public terminal for jeepneys, tricycles and single motorcycles

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Although the LGU was supposed to earn a daily terminal fee, revenues from the enterprise were never enough to pay for the salaries of the two LGU personnel deployed to undertake terminal operations. According to municipal records, the highest weekly remittance was P700.00 while the terminal was under LGU-management. In December 1995, the LGU attempted to resolve the problem by awarding the management of the terminal to a private contractor, who then agreed to pay the LGU a daily rental fee of Php450.00. In the first two years of the arrangement, the contractor was able to remit payments to the LGU religiously. As time passed, however, the contractor began missing payments, the delays initially stretching to a few weeks, and then lengthening into months. Beginning 2000, it was taking the contractor more than six months to settle the rental fees with the Municipal Treasurer’s Office.

Basic Profile: Esperanza, Sultan Kudarat Location: Sultan Kudarat province Land Area: 35,620 hectares Population: 51,233 (2004) Population growth: 1.867% Ave. HH size: 5 (2004) Income class:3rd class IRA: Php 44,254,879 (2004) Local Revenues: Php 4, 985,537 (2004) No. of barangays: 19 Land use/Terrain: ¼ cultivated plain and ¾ hilly, rolling and mountainous Major industries/economic activities: farming, with rice, corn and mangoes as major crops

The delay was partly caused by the contractor’s inability to collect terminal fees from transport drivers and operators. Even with consultations carried out between the LGU, the contractor and the transport drivers to elicit their commitment to pay the terminal fees, remittances continued to be delayed. As a result, instead of resolving its problem of not turning a profit with the enterprise, the LGU now had to deal with the additional responsibility of getting the contractor to fulfill its obligations, as well as act as mediator between the contractors and transport drivers. In 2002, after failing to make payments for an entire year, the contractor submitted a formal letter to the Office of the Mayor requesting a reduction in the terminal fee from Php450.00 to Php200.00. This prompted the LGU to finally terminate the contract and bid terminal operations anew. Project Objectives The LGU’s decision to turn over the management of the public terminal to another contractor had the following objectives:

- Institutionalize the participation of CSOs in local governance - Strengthen CSO partnership with the local government through the

management of public economic enterprises for efficient delivery of social services to people

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History: Making Civil Society a Partner In 2002, the LGU of Esperanza became one of the recipients of the Philippines-Canada Local Government Support Program’s (LGSP) Revenue Generation and Resource Mobilization Project. This was a capability assistance project aimed at helping the LGU improve its revenue-generating capacity. As a result of the project, the Local Finance Committee (LFC) was able to determine why revenue collections were low and slow in coming in its public enterprises, including the transport terminal, and why personnel/contractors designated to manage the enterprises were generally ineffective. The LGU then formulated a Revenue Generation Plan aimed at increasing the LGU’s income from all its public economic enterprises. With the plan in place, improving public terminal management became an LGU priority. Thus, when the terminal operator requested for a reduction in its rental fee, the LGU decided to terminate the contract and offer the terminal’s management to other parties. On August 19, 2002, the SB passed a resolution entitled “Resolution Recommending to the Chief Executive, Honorable Romulo L. Latog Jr. for the Bidding of the Rental of Terminal in the Municipality of Esperanza, Sultan Kudarat”, which included policies and guidelines on the proposed bidding process. Invitations for bids were subsequently issued and posted in strategic places. This time, the LGU made a conscious decision to include both private business contractors and accredited civil society organizations (CSOs) in the bidding, and in the process opened the doors to partnership with CSOs. In the meantime, since the terminal did not have a manager until a new contract was signed, the Municipal Treasurer deployed two of its personnel to handle terminal operations. The year ended, however, with no bids submitted to the LGU. In the meantime, temporary LGU management again resulted in low to zero collection. The salaries therefore of the terminal supervisor and the collector continued to be charged under the LGU budget. Efforts to disseminate invitations for bids were intensified. In addition to the notices posted, announcements were done over the local radio station. Finally, in October 2003, three bids were received by the LGU, among them one from the EMVMPC. Given the merits of its bid and being one of the direct stakeholders in the public terminal’s operations, the EMVMPC won the bid for the terminal operations. Results: A successful LGU-CSO partnership The contract was signed in November 05, 2003 and the EMVMPC officially took over terminal management in mid-November. Since then, several concrete gains have resulted from the LGU-EMVMPC partnership. These include the following:

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A regular source of income for the LGU. EMVMPC remits to the LGU a daily fee of

P685.95, which is higher than the stipulated Php450.00 rental fee under previous management; this translates to Php20,578 in monthly income for the LGU. There is also increased terminal income for EMVMPC from fees on farm produce on market day, because of a scheme involving organized deployment of vehicles to agriculture-producing barangays during such days.

More employment and livelihood opportunities for EMVMPC members and other

individuals who depend on the terminal for their income. A greater number of small refreshment parlors have been established within the vicinity of the terminal while the number of ambulant vendors also increased. Overall, EMVMPC management declares that 222 female and 78 male EMVMPC members are now deriving additional income from the terminal.

Improved terminal services and

management. The terminal is regularly cleaned by EMVMPC members. The EMVMPC also instituted a formal organizational structure, with a full-time manager overseeing the whole operations and a regular bookkeeper. There is better traffic management because vehicles using the terminal were organized in such a way that they do not congest the space provided for them. EMVMPC also has an office within the terminal, which makes it easier for commuters and other terminal users to air their concerns and suggestions.

Better management relations with transport operators and drivers. The EMVMPC

conducts regular consultations with transport operators and drivers, resulting in improved collection of terminal fees and reduction in the number of disputes between management and clients. As a result, there is less paperwork (for issuances and demand letters of payment) and follow ups for actual payments.

Strengthened CSO-LGU partnership. Aside from EMVMPC gaining membership in

the Municipal Development Council, EMVMPC and other groups now hold regular consultations with the LGU, resulting in more open and cooperative relations. Market vendors, transport operators and drivers, dispatchers and other terminal personnel/workers and the LGU regularly meet to discuss issues and concerns and make plans for terminal improvements. Relations among EMVMPC members also improved, fostering healthy competition as well as cooperation among market vendors. Members of the cooperative have slowly changed their negative attitude

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towards the government and this is shown in their willingness to attend consultations.

Improved capacities for EMVMPC. EMVMPC members, who number 300, most of

them female (74%), gained knowledge and skills in terminal management as well as an improved sense of pride and responsibility in their work. A few members have been invited to attend seminar-workshops on public economic enterprise management spearheaded by the LGU.

More resources to improve terminal services. The cooperative, with the help of

the LGU, has also received assistance from the Peace and Equity Foundation (PEF) to increase their capital to enable them to buy more farm produce. This was facilitated by the LGU which linked up the EMVMPC to the PEF. The Planning Office of the LGU also assisted EMVMPC in the preparation of its project proposal.

Key Implementation Steps The successful implementation of Esperanza’s experiment in a CSO-managed public enterprise can be replicated by other LGUs by following the key implementation steps described below. 1. Conducting consultations among stakeholders to build consensus for improved

terminal management

The LGU conducted consultations with stakeholders whose operations would be affected by changes in the terminal’s management. Stakeholders consulted included organizations of transport drivers and operators, dispatchers, ambulant and market stall vendors, terminal workers, and business establishments within and near the terminal. 2. Selecting a competent and committed terminal manager/operator Esperanza went through a bidding process that was made open to the private sector as well as NGOs. This ensured that there was a proper assessment of capacities to manage the public terminal, which was lacking when terminal management was awarded in 1995. Announcements were made over the radio, and print materials were posted in most public places. When the bids were finally opened, the members of the Bids and Awards Committee (BAC) were all present, as well as representatives from the three bidders. (See Annex A for Requirements for Pre-qualification and Invitation to Pre-Qualify and Bid)

While the bidding process was being undertaken, the LGU took over the management of the terminal on a temporary basis, pending the awarding of the contract. Two personnel from the Municipal Treasurer’s office acted as terminal supervisor and the other as collector.

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3. Signing a management contract and turning over terminal operations to the

contractor After signing a contract with the LGU, the EMVMPC began discharging its responsibilities as terminal operator. Regular consultations between the LGU, through the Municipal Treasurer’s Office, and the EMVMPC were carried out, especially in the period right after the turnover.

Policies were also put in place and properly enforced regarding rates of terminal fees, modes and timetables for payments, regulations on traffic and vehicle movement, etc. (See Annex B for Memorandum of Agreement) 4. Conducting monitoring and evaluation Although the management has been turned over to the EVMPC, EMVMPC submitted regular reports and held consultations with the LGU every quarter. Even the Mayor, the Municipal Treasurer, and the SB Chair on Transportation attended the regular meetings called by EMVMPC with transport operators and drivers.

In a consultation held after a year of EMVMPC management, stakeholders came up with a more systematic assessment/evaluation scheme to further improve terminal operations by regularly assessing the performance of individual personnel as well as the functionality of relationships among personnel and organizations in the terminal. 5. Ensuring sustainability and capacity for terminal management EMVMPC strives for sustainable terminal operations through the following measures:

Development of a manual of operations that further systematizes terminal management, defines roles and responsibilities and clarifies policies and regulations

Continued regular consultations with the LGU and terminal stakeholders to ensure that terminal policies are in line with overall LGU guidelines

Implementation of an assessment/evaluation scheme Improvement of physical infrastructure (e.g. installing seats for waiting

passengers, a clean public toilet, trash bins for garbage, etc)

As an added measure, the President of the EMVMPC also sits in the Municipal Development Council, and is regularly invited to committee hearings carried out either by the SB Committee on Transportation or by the Committee on Public Economic Enterprises. This contributes to ensuring that terminal concerns are integrated or considered in overall LGU development plans.

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Matrix of Key Implementation Steps Key Implementation

Steps Expected Outputs Timeframe Person/

Agency Responsible Budget/ Resources

Required 1. Conducting consultations, build consensus for improving terminal management

Consultations conducted, consensus built

Bids and Awards Committee (BAC), Economic Enterprise Taskforce headed by Municipal Treasurer

Time and budget for consultations Political will on the

part of the LGU Budget for print and

radio announcements

2. Selecting a competent terminal operator/manager

Private contractor selected, formulation of SB resolution, MOA or contract formulated and signed

6 months for the bidding process and selection of contractor

BAC, Sangguniang Bayan (SB) for resolution

Time and budget for the bidding process

3. Signing a management contract and turning over terminal operations to the contractor

A signed management contract A functioning

privately-managed public terminal with structures and policies in place

1 week BAC, Mayor, Contractor, Taskforce as witnesses

Budget and personnel for terminal operations

4. Conducting monitoring and evaluation

Monitoring and evaluation mechanisms and tools Changes made to

address findings

Regular (monthly reports)

Treasury, Accounting; Chairman of Project Monitoring and Evaluation Committee (PMEC)

Time, budget and personnel for monitoring and evaluation

5. Ensuring sustainability

Sustained through resolution to conduct bidding at end of contract

Continuing BAC, Treasury, Mayor

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Analysis and Lessons Learned: Sustaining a successful partnership Two key lessons learned by Esperanza’s project stakeholders from the experience of implementing the project were: Civil society groups can effectively manage and operate public economic enterprises like transport terminals and can become effective LGU partners in development and revenue generation. LGUs, therefore, should be more open to working with NGOs and other CSOs in similar ventures. Effective terminal management is rooted in cooperation and dialogue among stakeholders, including the LGU, the private sector, workers and others.

LGUs interested in replicating Esperanza’s success may be able to do so, therefore, by keeping these lessons in mind. Apart from these, minimal financial and material resources (mostly on the bidding process) are required on the part of the LGU, as such a project calls for private management. In addition, replicating LGUs may also want to adopt the following measures during replication: A broader public economic enterprise management plan may be considered, of

which terminal management may only be a part. This will provide greater significance to the venture, show the seriousness of the LGU in the project and attract reputable organizations to the undertaking

To pave the way for CSO-LGU partnership, an LGU may need to undertake

accreditation of CSOs in the area and designate an office/department within the LGU that can work well or have rapport with CSOs

Making the bidding process open and transparent will encourage trust among

prospective bidders and stakeholders and may ensure a wider selection of bidders to choose from. This will increase the chances of selecting a professional, competent and reliable contractor.

By building trust and ensuring support, an LGU can show that it is serious in

allowing a private entity to take responsibility for terminal management, and equally serious in holding the same entity to its obligations. In Esperanza, while LGU officials would attend the meetings called for by the EMVMPC, it allowed the cooperative to make the major decisions, offering only suggestions and recommendations. In addition, the LGU has also invited EMVMPC representatives to seminar-workshops to improve their management capacities, and linking them with funding institutions like the PEF to acquire more capital for investing in the terminal. The Mayor’s Office and the Municipal Treasurer’s Office also provided ready assistance for any problems or concerns brought to their attention by the EMVMPC.

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Continuous capacity building is important for improved management of public enterprises in general. This may include seeking opportunities for, and or direct assistance in: improving capacities for negotiation, mediation, and organizational management; market linkaging and expansion; product enhancement; developing positive attitudes towards healthy business competition; intensifying environmental awareness (particularly in solid waste management); strengthening entrepreneurial ability.

Who to contact if interested in replication: Richel Librilla Tel. 064-477-0133

Annexes:

A: Requirements for Pre-qualification and Invitation to Pre-Qualify and Bid B: Memorandum of Agreement between the LGU and EMVMPC

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Annex A: Requirements for Pre-qualification and Invitation to Pre-qualify and Bid

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Annex B: Memorandum of Agreement Between the LGU and EMVMPC

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