P-Noy’s PPP version prejudicial to Filipino public
The concept originates from the idea of tapping government and private capital resources for infrastructure-building; and then give the operation of the projects to the private partners under government supervision for them to recover their respective investments. Thus, significant economies in essential public services, such as toll highways, urban rapid transit systems (rail and others), water services, etc. become attainable to the user-public and the country as a whole.
However, the policies of President Aquino’s public-private partnership (PPP) program appear to have been “hijacked.”
Background: The invitation for the submission of tenders for the Cavite-Laguna Expressway project (Calax) was issued by the Department of Public Works and Highways in mid-2014.
The two-envelope procedure used by the DPWH yielded only one conforming tender—from Team “Orion.” (The only other bidder, “Optimal Infrastructure,” was “disqualified” by the DPWH, hence, its bid was left unopened.)
However, after being disqualified, Optimal disclosed to the public that its proposal provided for a “premium” of P20.405 billion as against Orion’s P11.66 billion!
Under these circumstances, the President decided to intervene, making the bidding doubly controversial, Optimal being a consortium identified with Cojuangco family interests.
Calax was eventually rebid with the stipulation that “The Bid Parameter: Shall be the highest ‘premium’ offered with a floor price of P20,405,000,000.00.”
Two conforming tenders were received:
- MPCALA (a unit of Metro Pacific Investments Corp.) offered a premium of P27.3 billion.
- Optimal offered a premium of P22.2 billion.
Neither Orion nor MTD Philippines joined the second solicitation for tenders.
We understand that the DPWH has chosen to award Calax to the unit of Metro Pacific Investments Corp. sometime in mid-2016.
Caveat emptor. The public may have failed to take notice of the costly and extralegal consequences of the “premium” provisions in the P-Noy version of the PPP concept!
The premium, payable front-end plus the cost-of-money thereon, represent an additional cost-element for the proponent over and above all the direct and indirect costs of engineering, construction and operation of the infrastructure, the totality of which the proponent will need to recover from the toll fees collected from the user-public.
Effectively the premium provision partakes of baseless revenue-generation act on the part of the national government—like the surreptitious collection from the user-public of a specific infrastructure for which the national government had spent. This issue warrants the involvement of the legislature and the courts! The infrastructure’s user-public will be burdened—probably deceived as well!
P-Noy’s PPP version, as currently implemented, is in reality an “auction” to the highest offerer for the franchise to partner with the national government and for the monopoly to collect the highest “usage fees” over the life of the franchise. Big Business and Big Bureaucracy are the unwanted beneficiaries!
The issue need to be resolved for the PPP program to succeed.
—ALFREDO V. ASUNCION, [email protected]
