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THE GOVERNMENT does not expect to meet its target of bidding out 10 private-public partnership (PPP) projects this year given the need to scrutinize details and renewed uncertainty over ownership rules, a senior official yesterday said.
“At this rate, the studies are taking time, so we won’t be able to bid them all out, perhaps, around seven within the second semester,” Trade Undersecretary Cristino L. Panlilio told reporters at a communications forum.
The government has so far only offered two PPP projects to investors: the maintenance and operations contract for two Metro Manila railways, bidding for which has been put on hold given a management change at the Transportation department, and the Daang Hari-South Luzon Expressway (SLEx) toll road that was announced this week.
Mr. Panlilio said other projects close to being green lit were the Ninoy Aquino International Airport (NAIA) Expressway Phase II and the expansion of the Light Rail Transit-2 (LRT-2) and Metro Rail Transit (MRT)-3 lines.
“[F]or five PPP projects that are close to being bid out, and they took long to do so because the feasibility study phase was extremely difficult … they are either ongoing or nearly finished,” he said.
“We have the Daang Hari and NAIA road, which can be bid out by August… then we have the connector road or elevated highway connecting SLEx to Diosdado Macapagal Avenue… which will pass through the NAIA-3 terminal, the old domestic airport… and according to reports I’ve heard, this will be bid out in the next two months,” he said.
“Third, the connector road between NLEx (North Luzon Expressway) and SLEx, a major infrastructure project… is close to being perfected and will be bid out in due time as well.
“Fourth, there is the operations and maintenance of LRT-1 and MRT-3, although I cannot say which particular month the bidding will be scheduled, but I can say it can be bid out within the second semester,” he continued.
“The last for this year will hopefully be the LRT-2 extension to Masinag, Antipolo, and [the extension of a] branch of MRT-3… to San Jose, Del Monte. These are the PPP projects, which we think we can pull off within this second semester up to first quarter of 2012,” Mr. Panlilio said.
He also acknowledged the need to ease rules on foreign ownership to expedite the rollout of PPP projects.
“We are also currently working on at least five measures which should make our country more investor-friendly,” Mr. Panlilio said. “Based on our consultation with lawyers, these measures are considered unconstitutional because they were discretionarily imposed and not even part for the negative list.”
“One of the issues we will review is the operation of public infrastructure, so we can examine how to amend the law to allow foreigners to be majority stakeholders — probably reverse the [40% foreign ownership cap] rule, which I think will benefit many of our projects,” he said.
“Construction is also one of the areas,” he added while declining to name the rest of the sectors as the review continues.
Officials of the American and European chambers said they would welcome efforts to reform such policies amid confusion on the interpretation of the ownership cap.
“We welcome any attempt to create a level playing field to allow competition for the benefit of consumers at large,” said Henry Schumacher, European Chamber of Commerce in the Philippines executive vice-president, in a text message.
John D. Forbes, American Chamber of Commerce in the Philippines legislative committee chairman, said: “I hope what [Mr. Panlilio] said today is a beginning of a complete review of the foreign investment negative list to make it smaller in order to implement the level playing field envisioned [by the Aquino administration]”
He suggested that the government implement even bolder ownership reforms.
“Between 2000 and 2010, there was only one change… in the foreign investment regime which was the [Retail Trade Liberalization Act of 2000], and at that rate, we wonder what does it mean for the government to create a level playing field… if the constitution restricts foreign investments in these different areas,” he said.
“Having said that, I welcome the direction the government is taking for infrastructure, [but] since the year 2000, there has been no leadership in making the negative list less negative and to increase competitiveness in the country,” he continued. — Eliza J. Diaz
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Source: Business World, July 21, 2011
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