Transport chief says PPP scheme to be amended

THE GOVERNMENT is changing its public-private partnership program, a Cabinet official yesterday said, with the state to build some of the projects to save money and then letting the private sector operate and maintain the facilities.

The shift from the usual built-operate-transfer model for infrastructure projects suggests more delays to the centerpiece PPP scheme. The first projects were meant to have been put up for tender in early 2011.

Transportation Secretary Manuel A. Roxas II, who will oversee many of the projects, said it would be more cost-effective for the government to build the infrastructure, as it had access to cheap, long-term development loans, and bid out the operation and maintenance.

“We are reconfiguring the financing of the many projects so that we can avail of the long-term, low-interest capital that is available to government,” Mr. Roxas told reporters.

“As originally conceived, several of these projects would have been concession agreements with the private sector. We have reconfigured the projects so that the large, basic, hard infrastructure will be undertaken by the government availing of low-interest money… and we will then subsequently privatize the operations and maintenance aspect,” he added.

The PPP policy shift means upgrading the contract for the Light Rail Transit 1 (LRT-1) from just an operations and maintenance (O&M) deal, Mr. Roxas said.

“Our direction for the LRT is … revenue, operate and maintain. This means the [winning] firm would be the one collecting the fare.”

The railway, opened in 1984 and Metro Manila’s first elevated line, will no longer be offered together with the Metro Rail Transit-3 (MRT-3), which the transportation chief hinted could be taken off the auction block.

Provisions regarding guaranteed fares have not been decided but the Transport chief said he did not expect this to be a dealbreaker.

“We redesigned the terms of the contract … [it will be finished] in the next month or so,” Mr. Roxas said.

The LRT-1/MRT-3 O&M contract was the first PPP project to be offered by the government. It was put on hold, however, when Mr. Roxas took over in June.
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By: Reuters with a report from KAM
Source: Business World, Sept. 30, 2011
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