Why I wouldn’t rebid Calax

“Panay Power Point” was, for a while, the tongue-in-cheek definition given by critics for the government’s PPP program. The appellation appeared to embody the business sector’s impatience with slow movement in the public-private partnership infrastructure program, which had found prominence in President Benigno Aquino III’s very first State of the Nation Address. Indeed, halfway through the President’s term (i.e., in mid-2013), only two relatively minor projects among the initial list of 10 were under construction. Without downplaying their importance, the Daang Hari-SLEx Link Road and the School Infrastructure Project actually represent a tiny portion of the first round of identified PPP projects, at least in terms of costs. Clearly, the various other PPP projects need to be promptly bid out, built and put into service at the soonest possible time. The needs are urgent, and suffering Filipinos have waited long enough.

This is why the proposed rebidding of the Cavite-Laguna Expressway (Calax) project, when there was no bid failure that would warrant it, has become of great concern to many. The 47-kilometer expressway will link the Cavite Expressway (Cavitex) and the Southern Luzon Expressway (SLEx). Apart from easing traffic congestion now clogging up Governor’s Drive, Aguinaldo Highway and Santa Rosa-Tagaytay Road, Calax would substantially enhance socioeconomic activities and trade in this premier agroindustrial area. The project was bidded out last June with four proponents participating, but the San Miguel Corp. (SMC)-led Optimal Infrastructure consortium was disqualified on a non-compliant bid bond, later claimed to be the result of a “typographical error.” Team Orion, the Ayala-Aboitiz consortium, won the bid with a proposed P11.66-billion premium payment to government. However, the SMC group claimed that it would have won with a P20.1-billion bid if not for the “technicality,” and appealed to President Aquino to overturn its disqualification. In late June, the President ordered the suspension of the award, and the project has remained hanging since. Citing the P8-billion difference between the winning bid and the claimed SMC bid, President Aquino has signaled his inclination to rebid the project. This has met with a strong reaction from business groups, alarmed at the wider ramifications of government failing to uphold its own PPP rules in this case. Meanwhile, the project is unable to take off, and those adversely affected by the lack of it must continue to bear their burden.

If I were the president (not that I entertain any illusions that I could ever be), I would not tread that dangerous ground of a rebid. I would have at least four reasons why.

First, rules are rules. They are there for good reason, and not meant to be set aside or broken when convenient. For me to set those very rules aside shatters my entire government’s credibility and sends a chilling signal to all, investors and plain citizens alike. And I stand the risk of derailing the entire PPP program—not to mention giving myself more problems later—as nothing will stop losing bidders from challenging awards directly with me henceforth. (When a funding organization recently called for project proposals and set a firm deadline for submission, proposals that came in late, even by a few minutes, were declined outright. The tardy proponents graciously accepted it. I know; I was part of one such proposal that missed the submission deadline by mere minutes, and despite the great effort we had put into the proposal, and our confidence that ours was a strong one, we respected the rejection. Rules are rules.)

Second, I would think twice to overrule my Cabinet members when I know they have acted in accordance with law, in strict adherence to set rules, and to the best of their judgment. Such unwarranted rebuke, especially for a subordinate official who has shown exemplary performance the way Public Works Secretary Rogelio Singson has, would run counter to effective and empowering leadership. It would also court serious demoralization among my best lieutenants who are supposed to be my alter egos, and ultimately undermine my own effectiveness as a leader.

Third, price/cost alone has never been sufficient basis for determining the best proposal. Even with the disqualified bid’s P8-billion difference, it need not follow that it was the superior proposal; comparing the technical bids is just as important, if not more so. And considering that my decision to rebid could lead to (1) loss of a potentially larger amount in discouraged investments, plus (2) implementation delays that would translate to mounting opportunity losses from continued traffic congestion and foregone economic activity, the P8-billion bid difference may very well be illusory and not worth calling a rebid for, everything considered.

Fourth, Team Orion has already made it easy for me to shun a rebid and to just make a decision outright, whether to uphold the official bidding result in their favor, or overrule it and award the project to the SMC group. Orion has made a firm commitment to respect my decision, and not to seek legal recourse if I ruled against them. Thus, if the P8-billion difference is really all that matters in my judgment, and since I have the power and authority to decide the matter, I could rule whichever way and avoid further costly delay.

Other convincing arguments have already been advanced besides these, but if I were the President, the above are enough to convince me that forcing a rebid would be a bad idea indeed, and certainly not the Solomonic decision it may appear to be.

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