System failure

DEMAND AND SUPPLY – Boo Chanco (The Philippine Star) – June 22, 2018 – 12:00am

The economic managers were in Japan this week to finalize plans to borrow significant amounts of money to finance Build Build Build. We are borrowing $ 1 billion in yen denominated samurai bonds. The Japanese government is also giving us a little over a billion US dollars in loans and grants also for BBB.

I am sure we need all the money we can get to help us build needed infrastructure. But I am not sure about our readiness to use the money productively. The money can’t sit idly, waiting for us to get our act together.

I am not too hopeful. Two years after the Duterte administration took office, we have seen nothing yet. Everything so far is talk, road shows, and powerpoint presentations. Wishful thinking!

The projects they have been inaugurating lately were initiated by the last administration. While they get stars for allowing those projects to be completed, they should by this time be busy constructing projects from their long list under Build Build Build. Only the Clark Airport project being done by Megawide under contract with BCDA has been awarded and is actually being constructed.

I have been wondering what is keeping the likes of Tugade and Villar from getting the show on the road. From people who know the workings of government, the answer I keep on getting is simply this: the system to award projects is terribly broken. In other words, we have a system failure.

Let me explain by way of example… my favorite four kilometer LRT2 extension project to Antipolo. Jun Abaya made the horrible mistake of chopping up the project during PNoy’s watch. Because he did, the project is difficult to get completed.

The viaduct on which the rails will be laid were delivered a year ago. That is the part of the project that required a lot of heavy lifting, literally. Motorists have suffered unbearable traffic jams while it was being constructed. That inspired Abaya’s memorable observation that traffic jams don’t kill anyone.

But Abaya didn’t award the building of the stations, supply of and installation of the rails, the catenary (overhead line or overhead wire used to transmit electrical energy to trains) and signaling system. Under Art Tugade, DOTr awarded the building of the stations and that is now being constructed and will soon be completed.

But guess what? After the stations are completed, the trains will still be unable to run. Tugade has yet to award the supply of the catenary system, the rails and the signaling system.

They had a number of failed bids. Why? Because the project was so delayed… the cost estimate was circa 2012. Of course, prices have gone up by now, specially with the weak peso. There is, however, a rule that no bid above the estimated price can be awarded.

So a failed bidding is declared. Succeeding attempts to bid have also understandably failed. The budget department should provide a bigger budget, upgrade the estimate to reflect present costs.

Budget Secretary Ben Diokno told me that public biddings of Tugade’s projects are now being done by his department. If that is so, Ben should know they are wasting time. All those failed bids could have been avoided if they allocated additional funds.

Ben is so busy promoting BBB, but he miserably failed to attend to the details of how his department can get it done. I understand Tugade is experiencing the same problem with the common station which broke ground almost a year ago, but nothing else has happened since other than failed bids.

Maybe if Ben stops trying to steal the work of Martin Andanar as the administration’s point man for propaganda, he will find the time to address bottlenecks in implementation. This system failure will make BBB a big disappointment unless attended to right away.

There are other funny rules designed to prevent fraud in the public works arena that are also causing a slowdown in project implementation.

When they have to tear down houses or buildings to give way to a road project, they must first make an inventory of every screw, door locks, and other such things so COA can determine the compensation.

That is one reason why the much needed NLEX-SLEX connector road is unable to move faster. Right-of-way procurement is snail paced. And once the land had been acquired, dealing with the buildings is another arduous process.

It makes me wonder why ROW scams like that one in General Santos still happen. These tough rules are useless if real projects are delayed considerably, but crooks are still able to defraud the taxpayers as if it was the simplest thing to do.

If we are unable to carry out much needed projects in Metro Manila where the likes of Ben Diokno can easily monitor developments, what more in the provinces?

Ben was trying to impress me with the idea of geo-tagging projects so they can remotely see developments in the project sites. I am impressed, but I would be more impressed if Ben asks his procurement staff what’s keeping the LRT 2 Extension project from being completed a little more quickly.

Mark Villar can also be a little more hands-on with his ROW acquisition team and help alleviate the backlog of cases so projects can actually get started.

Mark made a big to-do with the groundbreaking of that C-6 Lakeshore project. But I found out the ROW has not been acquired. San Miguel, which won the right to do the project, cannot mobilize a construction crew until a significant amount of ROW is available.

The system is broken… no, it is worse. There is a system failure and the earlier the economic managers start fixing the system, the earlier they can get going on BBB. Until then, it’s all hot air.

Source: https://www.philstar.com/business/2018/06/22/1826675/system-failure