Why DOTC sucks

DEMAND AND SUPPLY By Boo Chanco (The Philippine Star) | Updated April 29, 2016 – 12:00am

The other week, there was this tweet that DOTC is hiring more lawyers. After I stopped laughing and shaking my head from left to right, I just had to share that tweet with my social media friends. They too had quite a laugh before they got angry.

Bureaucrats just don’t get it. The lawyers Mar Roxas brought with him to DOTC are principally responsible for the failure of that department to respond to their mandate of building the railways, airports and the reason why we don’t have car plates and drivers’ license cards.

But even if the lawyers abound at DOTC, I found out they are unable to roll out the bidding for the O and M of five domestic airports because they are waiting for the legal opinion of the Solicitor General and the Office of the Government Corporate Counsel. Ano ba yan?

I can understand why Mar would want a few trusted lawyers to watch his back. Awarding big projects are complicated within the context of government procurement rules. Mar had his sights on running for president and he didn’t want an Ombudsman case spoiling his ambition.

That’s fair enough. But the lawyers Mar brought with him took their jobs to mean they have to block every project or at least study the projects to death. No projects, no mistakes, no Ombudsman suits. Simple!

The lawyers also had no idea how to build or rehabilitate a railroad system from the engineering point of view. They couldn’t put out proper terms of reference for projects. The engineers in the private sector companies looking into the projects had a tough time trying to figure things out with them.

But don’t they have technical staff at DOTC? Yes, they do but it seems they are too low in the totem pole to have their opinions solicited by the undersecretaries who are lawyers. And, as one foreign consultant once told me, DOTC’s technical staff has little exposure on the latest international practices in implementing big ticket infra projects.

Budget Secretary Butch Abad early on in the P-Noy watch confirmed to me what he called “a technical deficit” within DOTC. When I asked him to define that, he said precisely what I feared: they don’t have enough trained engineers.

During the Dagupan debate last Sunday, Mar Roxas confirmed my conclusions about DOTC’s inadequacies and he made an excellent suggestion to just merge DOTC with DPWH. I suggested that too in a past column because there are many good reasons for doing that.

Mar mentioned better coordination since DPWH is in charge of building roads. DPWH also has better technical staff. They are more experienced in the nitty-gritty of getting big infra projects off the ground.

For one thing, DPWH has a dedicated staff trained and experienced in securing right of way. ROW problems are big stumbling blocks for DOTC projects like the LRT1 extension to Cavite.

They have lawyers too at DPWH, but unlike the DOTC lawyers, they are not neophytes in awarding projects within the requirements of the procurement rules. All they need is a good leader like Babes Singson to set policies and be a good example.

In last Sunday’s debate, it was difficult to argue with Mar Roxas about his proposed solutions to the traffic problems of Metro Manila and the transport infrastructure needs of the country, e.g. the railway line from La Union to Bicol. But Mar has no credibility saying all that because those are precisely the projects DOTC failed to deliver over the last six years.

I once asked Sec Jun Abaya in a conference we had at the PhilSTAR office why they take so long in rolling out projects. He said it was because they are very careful not to commit the mistakes of the past. He also said the requirements of the procurement law are very strict and give them little wiggle room.

Assuming Abaya’s excuse is valid, my next question to Mar Roxas if I was among the media panel in Dagupan would have been this: since the procurement law remains the same, what would make it easier for a President Roxas to roll out projects faster that Secretary Roxas and Secretary Abaya couldn’t do?

I have come to the conclusion the problem has more to do with the leadership and staffing of DOTC. If Ping de Jesus remained on top of DOTC, there would have been more accomplishments by this time. Ping did a lot more for Tita Cory as DPWH secretary in a shorter period and he didn’t get into trouble with COA and the Ombudsman.

I started out as a staunch supporter of Mar Roxas. When I noticed things were not moving, I gently pointed this out but he took the criticism badly. Okay lang… my loyalty to friends end when my loyalty to my country begins is a good motto for a columnist. I noticed it was the indecisiveness of Mar that led to DOTC’s downward spiral in P-Noy’s watch.

When he spoke before a group of Makati businessmen after his appointment at DOTC, he took me aside after his presentation and gave me a bird’s eye view of how he would do things. He was going PPP.

I thought going PPP was good because we can get more honest costing when there is a public bid for a project. And the private sector has an economic incentive to get projects up and running and earning money as quickly as possible.

Nothing was really moving for weeks because Mar was vacillating whether to go PPP or ODA. Eventually it was ODA because the interest rate is concessional, it is government to government so Mar signs one agreement with say, JICA, and that’s it. He gets no exposure to allegations of corruption.

Problem is, ODA may end up more expensive than PPP. Yen denominated loans have a way of ballooning out of bounds if the yen revalues. It may turn out the ODA-backed project is more expensive than PPP financed on commercial terms.

Besides, our financial system had very high liquidity at that time and the BSP even paid attractive interest rates just to sterilize so much cash floating around. Some of that could have been used to fund PPP and minimize our foreign debt as well.

In ODA, only Japanese or Korean contractors can bid, depending on which government is providing the aid package. We have no way of knowing if the bidders colluded to overprice the cost of the projects.

Hopefully, whoever wins on May 9 will have an infrastructure czar who knows what he wants to do on day one and not waste time.

Latest news from DOTC: I heard a very disturbing development regarding the North South Railway Project – South segment (from Tutuban to Bicol). DOTC has proposed (and ICC just approved) to split the project (there we go again with the tingi-tingi).

The worse part – they’ll do the commuter line via Build gradual Transfer O&M, but the long haul thru BT only! Again the DOTC delusion they can better manage the O&M of our trains!

Kahit BTM man lang for the long haul. Hindi na natuto ang DOTC sa interface issues between plain BT and O&M. This is another MRT3 in the making.

I asked transport expert Rene Santiago and this is his comment: “Granting good intentions, the BT component implies non-viability (financially) a priori. But should have been BTM to keep the incentives right and avoid future disputes on poor design and construction.

“If I was the decision maker, build the track infrastructure on government funding and bid out on PPP the acquisition of rolling stocks as well as the O&M of both.”

In other words, DOTC as presently constituted is hopeless.

Source: www.philstar.com/business