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One delay after another

/ 12:13 AM April 08, 2014

Not much good news has come out of late on the Aquino administration’s Public-Private Partnership program. This flagship investment program has been lurching from one delay to the next—truly disappointing, with just a little more than two years left in the administration. But to be fair, the Philippines’ record in privatizing vital projects since the 1980s has been marred by contract disputes, court litigations and flip-flopping regulations that serve to discourage foreign investments.

Last March 31, the Department of Transportation and Communications signed with the consortium of Metro Pacific Investment Corp. and Ayala Corp. the 10-year concession agreement on a new single-ticketing system for Metro Manila’s MRT and LRT lines. The P1.72-billion Automatic Fare Collection System (AFCS) project will replace the old ticketing system with a smart card technology similar to the Octopus card system in Hong Kong. It is envisioned to banish the long queues and make train travel more convenient and efficient. Yet this is only the sixth PPP project to be awarded under the Aquino administration. (The others are the Daang Hari-South Luzon Expressway link road, phases 1 and 2 of the school infrastructure project, the Naia toll road and the modernization of the Philippine Orthopedic Center.)

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But the bigger projects that would generate not only huge private investments but also thousands of jobs remain bogged down. Bid submissions for the Cavite-Laguna

Expressway and the LRT Line 1 Cavite extension project have been delayed. The approval of the National Economic and Development Authority board is still being awaited for the operation and maintenance contract for the Laguindingan and the New Bohol (Panglao) airports, and the operation and maintenance contract for LRT Line 2. Meanwhile, the Laguna Lakeshore Expressway Dike/Calamba-Los Baños toll expressway awaits the nod of the Investment Coordinating Committee.

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Still in the preinvestment-study phase are the Puerto Princesa airport; the integrated Luzon railway project; phase 2 of the Central Luzon link expressway; the Iloilo, Davao and Bacolod airports; the Kennon Road and

Marcos Highway improvement; the San Fernando Airport upgrading; and the Batangas-Manila (BatMan) 1 natural gas pipeline. And implementing agencies are either preparing or looking for consultants who will assist in the conduct of preinvestment studies for the modernization of the National Center for Mental Health, the Plaridel bypass toll road, the Manila Bay-Pasig River-Laguna Lake ferry system, the C-5 transport development, the modernization of the Dr. Jose Fabella Memorial Hospital, the Manila East mass transport system, and the new Cebu container port, among others.

What is saddening is that even those that have been bid out cannot proceed because—as in politics—some local businessmen cannot accept loss. Take the P17.5-billion Mactan-Cebu airport modernization project, which was delayed by almost three months. (The DOTC finally awarded the contract last Friday to Megawide Construction Corp. and India’s GMR Infrastructure. Second-highest bidder Filinvest, a partner of Singapore’s Changi, had questioned the financial capability of GMR, which operates airports in New Delhi and Hyderabad, and had raised a possible case of conflict of interest. However, Sen. Sergio Osmeña filed on Thursday a petition at the Supreme Court seeking to stop the DOTC from executing a concession agreement with Megawide-GMR.) The AFCS is another. It was awarded last March 31, but the second-highest bidder questioned the DOTC decision, claiming that its offer was better than that submitted by the Ayala-Metro Pacific group.

Questions are begging for answers. If the bidders are causing the delays, doesn’t this suggest that guidelines are being flouted? Why is there no will on the government’s part to enforce deadlines? Does it mean that project plans are not well thought out?

Also, if it is true that lawyers, and not technical people, are overseeing the bidding for many projects, then something must be truly wrong with the PPP program. Ensuring that projects will stand up to legal scrutiny should not be done at the expense of job-generation and investment inflows. Losing bidders should learn a lesson or two on accepting loss and on considering the greater good instead of selfish concerns. Government agencies in charge of the projects should not waver when faced with the slightest suggestion of a complaint or suit from losing bidders. The bidding rules are there for all to see, and follow.

Ultimately, these endless delays will see the Philippines losing out to Vietnam, Cambodia, and even Burma (Myanmar).

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TAGS: Aquino administration, DOTC, MRT, PPP, public private partnership program, Transportation
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