This is a re-posted opinion piece.
No, this isn’t about the Balay versus Samar contest for P-Noy’s affection. Mar Roxas didn’t declare war against Kaklase, Kabarkada, Kabarilan when he spoke before a well attended joint meeting of the Makati Business Club and the Management Association of the Philippines. He wanted an end to Kapabayaan, Kakulangan and Katangahan. And he directed his warning to both regulators and regulated entities in the transportation industry.
Mar wants DOTC’s performance rated “by our safety score for our passengers… We intend to make safety standards enforcement a religious vow in the Department… No more business as usual, ‘okay na yan,’ ‘bahala na’ attitudes… We will make every official accountable and ship out the negligent and the incompetent…”
Complaining that he has grown more white hair since he took over DOTC, he said he and his team had been able to review, reconfigure and obtain approvals for nearly half a trillion pesos worth of CAPEX plans. He also said he has “gone through ups and downs and hard negotiating and dealing with international companies and their governmental backers (Germany, France and China).”
He identified his three top problems as the North Rail project, NAIA Terminal 3’s resolution and GMA’s RoRo project. He said China has agreed to reconfigure the North Rail project to our needs and terms. According to Roxas, “P-Noy very successfully convinced President Hu Jintao, Premier Wen Jiabao and Party Leader Wu Bangguo to be open to this and both the Chinese and Philippine leaders have tasked the relevant ministers to attend to it.”
How will it be different? Mar told the gathered executives “we will insist that the Philippines write the Terms of Reference, we will insist on an experienced rail construction contractor, we will insist on a bidding for the contract and we will insist on making payments only AFTER acceptance by the client (i.e. PHL).” The NorthRail project starts from Kalookan (some 15 kms short of the Metro Manila CBD) to Mabalacat, Pampanga (another 15 kms short of the Clark airport). The big change will see the reconfigured project linking CBD Metro Manila to Clark.
“This time we will get tracks that are standard gauge, able to handle heavier loads at faster speeds, instead of the older technology of a narrow gauge. Moreover, this time we will ensure that what gets built is as what was originally intended, in this case, a fast speed rail link whose target travel time for the 90 km stretch will be a reliable less than an hour, and not allow it to metamorphose, thru change orders, into something else, like it did presently, a slow commuter with some 12 stops. In short, think Hong Kong’s airport express!”
On NAIA Terminal 3 and PIATCO, Sec Mar emphasized, “we will pay JUST compensation, underscore JUST!” He said that “we were prepared to adopt fair value assessment based on the international practice of having three international appraisers or value engineers assess the value of the structure with the midpoint being the agreed upon value. But the contra party rejected this approach and insisted on their claim of some $800 million for a project with a turn-key contract of about $350 million. You be the judge as to whether this would be acceptable, whether for your own companies you would pay this.” Sec Mar reassured “we will not pay a cent beyond what is proper.”
On the P15.7 billion GMA RORO Port project, Sec Mar said they have informed the contractor of government’s position to suspend the contract. “The fact that its design is not suited for Philippine tidal, wind and wave sea conditions, the fact that out of the 72 locations where they were to be installed, some 50 already had port facilities in place … Moreover, there was no site inspection, no endorsement from regional development councils, no economic and financial viability studies, and no Environmental Compliance Certificates! In short, the project bypassed the proper budgetary, environmental and procurement processes.”
The Secretary said they are presently in talks with the proponent company and they have expressed a willingness to renegotiate the contract. The government has convened a Technical Working Group (DOTC, PPA, OSG and DoF) to set the parameters for negotiation.”
As a regulator of the local transport industry, Sec Mar declared they “shall be strict, consistent, effective, fair and transparent in order to protect the public…” He promised to apply the economic law of supply and demand in granting route franchises for buses and jeepneys. He also intends to pursue the proposal to dump the “boundary” or quota system of compensation for bus drivers, “so that bus drivers don’t go battling each other recklessly in chasing for passengers posing a danger to themselves, their passengers and other motorists and pedestrians.”
On Civil Aviation, Sec Mar is focused on regaining our Category-1 status and meeting the international standards for aviation safety. He reported that “out of the 127 total individual ‘findings’ by FAA and ICAO (25 are overlapping), we believe we have satisfactorily attended to all but seven. Among the remaining ‘open’, unresolved items are: the hiring of additional employees, the comprehensive training here and abroad for all CAAP inspectors, the conduct of regular flight checks for pilots and aircraft. The FAA is scheduled to conduct a “Technical Review sometime in December 2011, something like a midterm test, and we are optimistic about the progress we have made.”
On NAIA/MIAA, his top concern is decongesting the airport facility, which he said, is operating beyond its rated capacity hence the 30 min to one hour delays (at the terminal, the taxiway or circling overhead). “Our goal is to increase the handling capacity of the airport by improving its ‘cycle rate’. We shall do this by constructing first one then another rapid exit taxiway to reduce runway occupancy time. This will take a few hundred million pesos and will take up to a year as we can only do construction work during the airport’s ‘downtime’ which is from 1am to 4am.”
On the LRT – MRT, he noted that MRT is operating way beyond rated carrying capacity, the major cause for breakdowns. Sec Mar intends to expand capacity – rehabilitating and rebuilding many of the 1st generation trains (63, LRT-1), buying new trains (24, MRT-3), improve maintenance so it is preventive vs curative, and if necessary, advance the purchase of spares and replacements.
Sec Mar said they roughly estimate all this to cost about P6.5 billion (some $150 million). But fear not about where to get the money… they are hopeful they can obtain the money for this. They recognize that all the 3 train systems require ongoing and continuous funding support from the government. That means fare subsidy continues even if a minimal fare hike is imposed.
Mar Roxas supports limited open skies but not at expense of local commercial airlines. He likes Asean Open Skies which provides reciprocity for airlines in the Asean region. But he pointed out that China is our big potential tourism market and we will have to negotiate with China for a bilateral open skies agreement at some point.
In a conversation we had over coffee after his MBC/MAP speech, Sec Mar exuded confidence that he now has a grip on the problems of his department and he is now all set to get the projects rolling properly. But none will be bid out this year under the PPP.
Asked about Finance Sec Purisima’s promise of PPP projects before year ends, Sec Mar clarified that none of the projects were PPP ready when he assumed office and he does not intend to cut corners. He reassured that there will be no delay because of his plan to use ODA financing for the infrastructure part of the projects and that O and M will still be for the private sector.
Follow your heart
I am changing pace today to honor Steve Jobs. Here’s one of his inspiring quotes.
“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”
Boo Chanco’s e-mail address is [email protected]. He is also on Twitter @boochanco
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By: Boo Chanco – Demand and Supply
Source: The Philippine Star, Oct. 10, 2011
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