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Bang for the buck

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WHAT’S becoming clear, if its program in transportation-infrastructure development is any indication, is that this administration did not hit the ground running from Day One.

That much is evident in the recent pronouncement by the Department of Transportation and Communications (DOTC) of its lineup of projects for the next five years.

In unveiling an ambitious P500-billion plan to develop key rail, airport and rail projects, Transportation and Communications Secretary Mar Roxas said the goal is to build up the country’s public transportation systems and thereby accelerate economic development, particularly in the countryside.

The DOTC projects include the international airports of Puerto Princesa City in Palawan, Panglao in Bohol, and Laguindingan in Misamis Oriental. The plan also calls for the development of ports in Davao, and the roll-on, roll-off port linking China with the Subic Bay Freeport Zone in Zambales.

The rail projects include the LRT 1 Baclaran, Pasay City, to Bacoor, Cavite, and LRT 2 Santolan, Pasig City, to Masinag, Antipolo City, extensions, as well as the reconfigured NorthRail from Metro Manila to the Clark Freeport Zone in Pampanga.

All these would no doubt help bring about progress to both rural and urban areas. But most of the projects announced by the DOTC are still in their early stages. In some cases, the feasibility studies have yet to be completed. Thus, it would definitely take some time before the contracts are put on the auction block for investors.

And there lies the rub. Can the DOTC deliver on its promise to complete most, if not all, of these projects by 2016?

Roxas said the government would have the option of funding the projects through public-private partnerships (PPP), official development assistance (ODA) or loans from abroad, the government budget or a combination of all these. The priority, he said, would be to get the lowest costs possible.

But the problem is that the Aquino administration’s much-vaunted PPP program is in the doldrums more than a year after it was announced by the President early on. The PPP looked good on paper: the government would not spend a single centavo for vital infrastructure projects and instead entice the private sector to put in money. But as things have turned out, foreign investments, according to one foreign chamber, have been “slow in arrival.”

That’s not surprising, given the government’s deliberate slowdown in public spending due to concerns over corruption. It has junked at least two big-ticket projects: the rehabilitation of Laguna de Bay bid out to a Belgian dredging company and the modular Roro ports contracted to a French consortium. With the contracts unilaterally rescinded by President Aquino, forget about getting an influx of Belgian and French investments to the country in the meantime.    

Then there’s the government’s less-than-sterling record in implementing ODA projects. Last week the National Economic and Development Authority placed 31 foreign-assisted projects under close monitoring due to possible delays in implementation or completion. Of these, 18 are actual problem projects and 13 are considered potential problem projects. The DOTC has one foreign-assisted project considered in the critical stage.

With Makati businessmen expressing concern that the switch from PPP to ODA to fund infrastructure could result in further delays in the implementation of projects considered crucial in the government’s efforts to generate jobs and reduce poverty, the DOTC plan appears to have started off on the wrong foot.

Nevertheless, we remain hopeful that the DOTC will be able to get these projects off the ground. The DOTC wants “to get the biggest bang out of every peso spent—no overpricing, no fancy specs that we don’t need,” said Roxas.

It’s a laudable objective, to be sure, but the infrastructure plan should have been ready right from the start, not one year later.

 


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