This is a re-posted opinion piece.
Okay, I realize you can’t “just do it” in government. They have rules that must be followed. Shortcuts can be painful in terms of potential court cases. No wonder Mar Roxas brought with him a bunch of lawyers as his undersecretaries. For an infrastructure agency, no one with technical expertise is among Mar’s senior deputies. Mar’s DOTC should be renamed Department of Transportation and Justice.
I can understand why Mar is being extra sure. I listened to his speech before the Makati business community and I understand that it takes time for Mar and his battery of lawyers to scrutinize everything. Still, I think public impatience is justified.
It took the embarrassment of NAIA 1 being tagged as the world’s worse airport for Mar and eventually P-Noy to do something about the terminal that bears the name of P-Noy’s illustrious father. Even then, I am keeping my fingers crossed that anything will really move by January as they promised. I now feel an obligation to publicly nag so they will not forget.
On the really big ticket projects, the same ones that were supposed to be up and running under the administration’s PPP program, not one is close to being started any time soon. Yet, amidst a lot of hoopla, Finance Secretary Cesar Purisima made P-Noy promise these projects will get going by year end, which happens to be a few weeks from now.
Judging from the all quiet on P-Noy’s early promises about the PPP, it is safe to assume they failed to get a single one on the starting block. And from the looks of it, expect nothing will get going by the first and the second quarters of next year. I believe, the reason why Mar was sent to DOTC is because the department needs clout to get going. Yet, almost half a year after, Mar isn’t even ready to pick the so called low hanging fruits.
I can understand that some projects are too complicated to rush. But there are some that have been studied to death and should be easy enough to get started. The LRT 2 extension from Santolan in Pasig to Masinag in Antipolo is a good example. It has no right of way issues. It had been studied four times. Drafting a terms of reference for bidding shouldn’t be too complicated.
The most recent feasibility study of LRT 2 extension to Masinag was financed by JICA. Proof that it is ready-to-go is a NEDA-ICC approval in June 2009. All that is missing is issuance of bid documents – the first drafts were already written, also in 2009.
I also heard that DBP and LBP had expressed willingness to finance the project. There is also willingness by the private sector to design-build-finance (i.e., true PPP) the project. Where is the hitch? Sources tell me it is being blocked by Japanese companies who want to place this project on the JICA pipeline and to end up with Japanese contractors.
That must be why Mar came out with his concept of ODA financing for the infrastructure and the private sector for operation and maintenance. Well, whatever it is, just get started. If the Japanese want it, give it to them but make sure they don’t overprice the project. It will be good to open it up for public bidding so we can see if there is private sector appetite and also to have a good feel on what is the right cost for the project.
The other project is the extension of the LRT to Bacoor, Cavite. Mar told me that he is well versed on this project that was once upon a time awarded to a Canadian firm. But I heard it got waylaid by a born again religious group with property interests in the area. They took the project away from the Canadians who won it fair and square and had done a lot of work already.
The LRT Bacoor extension was ready-to-go as far back as 2003. In 2006, IFC was hired as transaction advisor for a PPP implementation. It got blocked in the LRTA Board. In 2009, then LRTA Administrator Robles tried to shift funding through China, with the no-bid allure of the NorthRail-China template. Now, DOTC reportedly wants it handed over to JICA.
Again, this is a low hanging fruit begging to be picked. It is difficult to see what is keeping it mired in some bureaucrat’s desk. Best guess of earliest tender on the construction is 1st quarter 2013. Because that is an election year, the odds for delay are very high. There is also a strong lobby behind the scenes to get the project into the China cart, which is neither here nor there provided they get started quickly and without the embarrassing corruption of NorthRail.
One other MRT project should be ready for a final decision… MRT 3. DOTC announced that it is set to make a recommendation to President Aquino on whether or not the government should hand over full rights over the Metro Rail Transit (MRT) train line to the group of businessman Manuel V. Pangilinan.
Speaking to reporters last week, Mar said DOTC was considering spending P4.5 billion, to be taken out of government coffers, to buy 26 new trains for the MRT to increase capacity by a third. But he said the government was also studying Metro Pacific Investments Corp.’s (MPIC) $300-million proposal for MRT as a viable alternative to help the government save money. The MPIC proposal is also in line with the government’s policy to hand over major infrastructure projects to the more capable hands of the private sector.
Under MPIC’s proposal, the company plans to spend $300 million to improve MRT facilities by doubling the number of trains to 146 and expanding the stations. The company has also pledged to acquire the government’s shares in MRT, held by state lenders’ Development Bank of the Philippines and Land Bank of the Philippines.
In exchange, Manny Pangilinan’s group would raise MRT fares to about P30 a passenger, or about the same price commuters pay when they take Metro Manila buses for the same distance. MPIC also wants its concession for the MRT to be extended by an additional 15 years to give the company more time to recover its investment. The MPIC proposal was presented to President Aquino earlier this month.
It seems obvious the MPIC deal is the best chance for MRT3 to soon get that much-delayed system upgrade. Mar’s plan to let DOTC or the government buy 26 more railcars – will not bring relief to congested trains, aside from taking longer to execute. Imagine additional railcars in 2014 vs 2012 (if via the MPIC) deal.
Well, the Aquino administration does not have all the time in the world to study these urgently needed projects to death. They must also take advantage of the high interest of the private sector that can vanish in a jiffy as a result of fast changing conditions in the economic environment. It could happen that by the time government has decided what it wants to do, its options have already become limited.
The other project that seems to be shrouded in secrecy is the NorthRail. The last time we heard anything about it was during Mar’s speech in Makati. He said China is willing to reconfigure the deal. But Mar didn’t say when he intends to go to China to negotiate this reconfiguring. I heard the other evening that even Mar’s technical adviser who used to head NorthRail under Ping de Jesus was wondering what was going on with the project.
Yet, the NorthRail is very vital to making Clark our main international gateway. Mar himself said it is useless to talk about developing Clark before we get certain on the high speed train connecting it to Metro Manila’s business districts. Engineers tell me it could take as long as ten years to get this train in operation. So maybe that’s why it is in Mar’s back burner. It can’t be delivered before the end of P-Noy’s term.
The public sentiment seems to be simple enough: ok, they will concede that P-Noy is honest and sincere about his matuwid na daan. But is it asking too much for him to have a government that is not only honest but efficient as well?
The market explained
Ruth Marbibi sent this one.
The Financial Markets are currently like a strapless bra. Half the people are wondering what’s holding it up.
The other half are waiting for it to drop so that they can grab the opportunity with both hands.
Simple basic economics.
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, Nov. 25, 2011
To view the original article, click here.
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