|
THE
National Economic and Development Authority (Neda) is
asking for an increase in its budget to improve project
evaluation of “complicated” projects that will go
through Investment Coordination Committee (ICC)
approval.
Ruben
Reinoso, Neda assistant director general for
infrastructure, regulation and contract-review services,
said he has been pushing for an additional budget of
around $100 million to help the Neda obtain expert
evaluation, particularly for programs that make use of
new technology such as the national broadband network (NBN)
project.
Reinoso
said there are certain projects that require value
engineering and risk analysis for better evaluation.
This is usually provided by foreign experts who charge
$20,000 to $30,000 a month or around P500,000 to P1
million a month for a two- to six-month review period.
“This is
not to say that we at the Neda are your run-of-the-mill
engineers. In fact, many of us have undergone
specialized training in our specific fields, but we’re
not claiming expertise in these fields,” Reinoso said in
a phone interview.
Reinoso
added that if the additional funding was approved when
it was first proposed three years ago, the Neda would
have resources to seek expert evaluation for
“complicated projects” like the NBN.
However,
Reinoso assured that the Neda will not need expert
evaluation for projects such as railways and roads since
the Neda can easily benchmark the costs and terms of old
programs with new projects.
Meanwhile, Neda Deputy Director General Rolando
Tungpalan said the Neda could not yet comment on whether
the Southrail project is overpriced or not.
In his
testimony, NBN star witness Rodolfo Lozada Jr. said the
Southrail project was overpriced by $70 million due to
kickbacks and commissions paid to various project
ninongs.
Tungpalan said that when a project is submitted to the
Neda-ICC for approval, the project is first evaluated
based on the need for that particular project. The
evaluation is based on the Medium-Term Public Investment
Plan and the Comprehensive Integrated Infrastructure
Program.
If the
need for the project is justified based on the two
plans, then it will be subjected to a market evaluation.
Tungpalan said that this will help determine, for
example, the number of train cars needed, rails and
other similar components for the project.
Tungpalan said that only after these can an evaluation
of the financial aspect of a project be made.
As a
rule, however, he said that the contract price should
not exceed the project cost approved by the Neda-ICC. If
the commercial contract price is higher, the
implementing agency is required to return the proposal
for reevaluation by the ICC.
“There
are agencies, however, who do not return to ICC until
the funds are exhausted,” Tungpalan said in a phone
interview.
Tungpalan said that there are times when costs increase
after a detailed engineering of a project is conducted.
Usually, the cost of the 18-month detailed engineering
is included in the ICC approval, which leaves a +/- 20
percent of the cost for detailed engineering.
However,
if, for example, the detailed engineering reveals that
the site for the project requires a stronger foundation,
this will increase the project cost. |
