THE AQUINO ADMINISTRATION’S centerpiece infrastructure program could be headed for further delays as the president has directed his economic team to ensure that a proposed policy adjustment would have the “least cost” for the government.
Palace spokesperson Edwin Lacierda told reporters yesterday that President Benigno S. C. Aquino III had asked for detailed costings of public-private partnership (PPP) projects under the Transportation, Public Works, Health and Education departments. Financing and feasibility reviews have been cited by officials as having pushed back the bidding of PPP projects, which the government initially claimed would be the backbone of 2011 economic growth but have yet to be implemented.
Mr. Aquino’s directive, issued during a late afternoon Monday meeting that extended into the evening, followed Transportation Secretary Manuel A. Roxas II’s statement last week that the government could opt to build the infrastructure itself — taking advantage of concessional loans — and then turn the facilities over to the private sector.
In announcing the PPP initiative last year, Mr. Aquino had said his administration was looking to tap private sector resources as the government lacked the funds to bridge the country’s infrastructure gap.
“Based on cost, if government pays for the entire project, how much does it cost? If it’s PPP, how much do we pay then? So those are the kinds of figures that he (Mr. Aquino) wanted. Everybody had to present, because he had concerns really with some of them,” Mr. Lacierda said.
Asked if any of the projects listed under the PPP scheme had been dropped on the basis of cost, Mr. Lacierda replied, “so far, none yet.”
“There is no preference na huwag na lang, government na lang (that we shouldn’t engage the private sector)… There is no decision to move them (the projects) out of PPP,” he added.
Mr. Lacierda claimed that fresh delays were not forthcoming, indicating that PPP Center acting chief Cosette V. Canilao and her team, who were present during the Monday meeting, had given assurances that this year’s timeline would be followed.
The Palace spokesman confirmed that Mr. Roxas again discussed the concept of reconfiguring the PPP program into a “hybrid” whereby official development assistance rather than private sector financing would be tapped.
“The President agrees with Mar’s (Mr. Roxas’ nickname) statement that what we’re engaged in should be at least cost,” Mr. Lacierda said, reiterating the Aquino administration’s “Five Rs” — Right Project, Right Cost, Right Quality, Right People, at Right on Time — slogan.
“The President’s concerns are towards that; he wanted to see the figures again,” he said.
Out of an original list of 10 big-ticket infrastructure deals announced as having been included in the PPP program, only the P1.956-billion Daang Hari-South Luzon Expressway link deal is on the table. The first project offered to investors, the combined Light Rail Transit Line 1 and Metro Rail Transit-3 operations and maintenance contract, has been recalled by Mr. Roxas for review.
The chief of the PPP Center, which is supposed to oversee the scheme, resigned recently. The infrastructure-centered program has also been expanded to include projects such as the Health department’s vaccine self-sufficiency initiative.
In a related development, a Finance officials yesterday said that work was under way to launch the $13-billion Association of Southeast Asian Nations (ASEAN) Infrastructure Fund, which the Philippines is looking to tap for the PPP program.
The fund, to be based in Malaysia as a limited liability company, is currently being organized and operational guidelines are also being drafted, Finance Undersecretary Rosalia V. de Leon said.
It could be up and running by April next year, in time for the rollout of most of the projects under the PPP program, she added.
“The sovereigns can apply for financing from the ASEAN Infrastructure Fund,” Ms. de Leon explained.
The ASEAN Infrastructure Fund, launched last week, aims to leverage roughly $13 billion in infrastructure financing in the region until 2020. ASEAN has committed to lend $4 billion while the Asian Development Bank will finance some $9 billion.
Malaysia is the largest ASEAN contributor with a $150-million investment, followed by Indonesia with $120 million. The Philippines and Singapore will pitch in $15 million each.
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By: J. P. D. Poblete with inputs from K. A. Martin and Diane Claire J. Jiao
Source: Business World, Oct. 4, 2011
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