The best news to come out of Malacañang late in January was that the President doesn’t like the cheapest price. I’ve long argued this: You get what you pay for. Cheap leads to substandard, skimped work as suppliers try to make a profit at an unreasonably low cost.
The President says unsolicited bids for infrastructure works will now be welcome. The previous president said the very opposite: He wanted no unsolicited bids.
What’s really needed is amendments to the Procurement Law, which needs change in a number of areas including being able to select the best (not cheapest) offer.
Unsolicited bids are a clever way around this law, as the law allows for them. It’s just a little bit of fiction to allow for someone to introduce a project — even if it’s already a well-known need. It does, however, give someone an advantage as it’s very hard to beat someone who can match your price (as unsolicited bids allow), unless you are very low in price. Then you’re back to square one.
But there are other areas that need faster resolution.
They are:
ROW, or right of way. The Constitution gives the government the right of eminent domain, but no government has ever enforced it. For me, the solution is easy: Offer landowners one and a half (even two) times the market value. Given the delays now, it’s a cheap alternative. No one will refuse; if anyone does, that person can be shamed, and forced.
Licenses, permits, approvals, etc. Both national and local ones are too many, involve too many bureaucrats, and take a lot of time and expense. They can be reduced to a minimum, and given a deadline beyond which approval is automatic (this is already being done in some areas, but not universally). There are bills calling for the streamlining of business registration processes and hopefully, the lawmakers will pass the measures before Congress ends its session.
TROs, or temporary restraining orders. Here you need the support of the courts. But this should be attainable. I believe the issuance of a TRO for a major infra project is limited to the Supreme Court. The high court should be highly judicious in issuing TROs, particularly if sought by a losing bidder.
Freedom of information. This needs to be institutionalized through the immediate passage of the long outstanding law. The possibility of bribery will be greatly reduced, as the people can monitor all processes.
Better absorptive capacity of implementing agencies. Under the previous administrations, agencies were not able to fully spend their budgets. As a result, the government underspent and the funds went back to the national treasury. The intended projects under the General Appropriations Act were not implemented, and the projected benefits did not trickle down to the populace.
The World Bank has attributed the low absorptive capacities of implementing agencies to the following: frequent and unpredictable changes in agency policy regarding program implementation modality; cumbersome procurement process exacerbated by a lack of forward planning; and complexity of interagency coordination, which at times is exacerbated by internal administrative errors that are avoidable.
All these have yet to be done, but even if done, it could take months, even years in some cases, to get a project started. Action does not depend solely on the President. He needs the support of implementing national agencies, lawmakers, and local government officials to fast-track the construction of infrastructure that the government sorely needs. The bureaucratic roadblocks to more efficient infrastructure development must be resolved soon. This will support President Duterte’s goal of fulfilling his promise that the next few years will be the Philippines’ golden age of infrastructure.
Read my previous columns: www.wallacebusinessforum.com. E-mail: wallace_likeitis@wbf.ph