A Partnership that Transforms – Legazpi City Grand Central Terminal
About 350,000 students, businessmen and tourists flock into Legazpi City daily. This translates into traffic congestion and potential chaos in the city during the day. To cope with the influx, the city government decided to put up an efficient and world-class transport terminal.
The city government lacked resources for the construction of the terminal but this was not a deterrent. They invited private entities and businesses to partner with them in community building and development. LKY Development Corporation agreed to undertake the construction of the Grand Central Terminal under the Build-Lease-Operate-Transfer scheme. Under the agreement contract, LKY will manage, operate and finance the project at “no cost” on the part of the city government.
LKY will have a lease period of 25 years after which the operation and management, inclusive of the structures and fixtures of the terminal, will be turned over to the city government. LKY is allowed to collect reasonable fees, rentals and other charges for the use of the facilities so that it could recover its investment. But, it would also be paying PhP3.6 million in rental fees to the city government annually.
Located at Brgy. Bitano, the 3.45 hectare lot housing the temporary transport terminal has been transformed into the first state-of-the-art transport terminal in Southern Luzon. The terminal is now a bustling business commercial center with a number of dining establishments, souvenir shops and with a nearby mall for entertainment and leisure.
The construction of the terminal was initially opposed by informal settlers in the area. But after stakeholder consultations and dialogues were conducted, a “win-win” solution was put in place. The souvenir stall owners who were temporarily relocated to give way to the terminal’s construction were organized into an association and given priority in the distribution of the slots. Tricycle drivers who catered to arriving tourists and visitors were organized to instill discipline and discard unlawful practices. Those who would be hired by the terminal for various jobs were given seminars to improve their knowhow and skills. The displaced informal settlers were also organized and given livelihood trainings before they were absorbed by the Association of Urban Poor and relocated. The owners of adjoining lots that will be affected by road openings and construction work were consulted and compensated.
Today, the buses, jeeps, vans and tricycles have unhampered access to a safe, accessible, and efficient terminal, and passengers can now travel in comfort. Departures and arrivals are punctual and there are sufficient vehicles to ferry passengers.
Land valuation eventually increased, which was favorable to the city government because it also meant additional income from the real property tax. Income from rentals and business licenses and taxes increased from PhP92,000 in 2009 (from the old terminal) to PhP4.1 million in 2011 after the Grand Terminal was built. There was a marked increase in visitors which boosted incomes for the various entrepreneurs.
The terminal offered employment opportunities for porters, janitors, guards, stall helpers, ticket sellers, dispatchers and cooks among others. Souvenir stores that relocated to the terminal experienced increased sales and income. A large grocery store chain was also enticed to put up shop near the vicinity of the terminal.
The city government has clearly demonstrated that Public-Private Partnerships (PPP) can contribute immensely to economic development. But, essential to the PPP’s success is the community’s involvement and ownership of the project as these guarantee sustainability. Since the private developer is assured of the return of their investments, the viability and uninterrupted operations of the terminal is also ensured. In anticipation of the eventual turnover of the terminal to the city government, a committee has been tasked to devise mechanisms that would smoothly transition the management and operation of the terminal once the lease is terminated.
Careful planning and total commitment on the part of the LGU, the community and the developer partner are essential ingredients. But, the developer-partner’s financial capacity also needs to be verified and the people’s participation should be secured by LGUs which plan on undertaking a similar project.