MANILA, Philippines — International aid agencies are scrambling to fund the Public Private Partnership projects as the government has decided to tap official development assistance (ODA) funds to ensure lower cost of capital to bankroll these huge infrastructure projects.
Transportation Secretary Mar Roxas revealed this to reporters after his speech at the ‘ASEAN One Leadership Forum 2011’ saying the government has reconfigured some of the projects’ financing element so they could avail of concessional long term agreement or ODA funds from international aid agencies.
“There is tremendous support by international aid agencies. They are scrambling and competing against each other to finance these projects,” Roxas said. He said they have been talking to aid agencies including the Japan International Cooperation Agency.
Based on its “reconfiguration,” Roxas said the government is going to undertake the construction of the hard infrastructure and subsequently bid out for the operation and maintenance contract of the project to the private sector. “The hard infrastructure will be undertaken by the government,” he said. These projects include the LRT Line 1, which is an extension from Baclaran to Bacoor, LRT Line 2 for the Masinag-Antipolo extension and the airports for Cebu, Laguindingan and Puerto Princesa.
With the reconfiguration of the financing aspect, Roxas said, the government would be able to tap concessional loan agreements at ‘lowest possible cost” from international funding institutions.
“With the capital expenditure coming from ODA funds, there will be reasonable fees that would be charged to users of these facilities,” he said.
He noted of risk-sharing between the government and the private sector unlike in the past wherein the government has to guarantee the return on investments of the project proponents.
Roxas, however, cannot give exact timetable if there would still be enough time for the bidding of PPP projects this year, but said that as far as the DoTC-led PPP projects there has been no substantial slippage.
The feasibility studies of the DoTC projects have been completed two months ago but then the government has to reconfigure the financing element.
He, however, said that bidding for the detailed engineering has to happen earlier.
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By: Bernie Cahiles-Magkilat
Source: Manila Bulletin, Sept. 29, 2011
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