Unsolicited proposals far better than PPPs

The Metro Pacific conglomerate is to reoffer to the government to expand the MRT-3 commuter railway. Main rival San Miguel Corp. too is to resubmit a blueprint for a new airport on the Manila Bay reclamation. Both infrastructures direly are needed. The cash-strapped government can only dream of doing them on its own. Yet the Aquino administration ignored the unsolicited proposals when broached to it in 2011. Its dark reasons were to unravel later.

The MRT-3 plan cost $600 million (P30 billion) then. Metro Pacific was to extend the rails from EDSA to the Manila airport and harbors. New coaches would be added, the signaling and power systems upgraded, and the old trains, tracks, and stations refurbished. Ridership and consequently economic activity would perk up. In exchange, Metro Pacific would take over and profitably run the railway.

That was not to be. Shelving the idea, Aquino’s transport agency instead hired consultants for hundreds of millions of pesos. To look busy the consultants made overlapping suggestions. All basically were the same items in the Metro Pacific plan – but with a twist. Transport Sec. Joseph Abaya gave the maintenance to Liberal Party-mates. Substandard coaches were indented from China, at huge kickbacks. Since then, Abaya has plunked in P15 billion. He even doubled the fares. Yet MRT-3 has deteriorated. Only half the original coaches still run. No new train, rail, signaling, power supply, or station has been added. Ridership has dropped. Passengers took to other means of transport, snarling traffic for years in Mega Manila.

Metro Pacific announced to resubmit the MRT-3 plan a day after a new President was elected in May. Its head Manny Pangilinan said the idea has better chances of becoming reality under a changed leader.

San Miguel’s plan for a new Manila International Airport (MIA) was grander at $10 billion (P500 billion). Four parallel runways would be built on reclaimed land near the old one. Modern terminals would accommodate 50 million passengers a year, from the present 30 million. Philippine tourism would be boosted. San Miguel was to operate the facility like an efficient private concern.

That too the Aquino regime scuttled. At first it pretended to look to expand the Clark International Airport 90 km north. Then Abaya got more consultants to study erecting the new facility where most politically beneficial – at his congressional district in Cavite 25 km south. It would be costlier too. Space needs reclaiming from the sea, and roads paved and widened to Manila. Neither plan has materialized. The existing MIA has declined, meanwhile. Its only two bisecting runways always are congested; so are the passenger and cargo terminals. Running it like a mom-and-pop shop is Aquino’s cousin, Abaya’s ex-military boss Jose Angel Aquino Honrado. He is noted for the bullet-planting extortions, a five-hour blackout, frequent ceiling, floor, and air-conditioner collapses, and overpriced CCTV security cameras and rapid-exit taxiways.

San Miguel intends to revive the airport plan. This time it is in joint venture with the Metro Pacific Group.

Aquino’s policy excuse against the Metro Pacific and San Miguel unsolicited proposals was its bias for solicited ones. Ballyhooed as Public-Private Partnerships (PPPs), the latter were mistaken to be better. They were not.

Every PPP takes time and money to get off the ground. Tens of millions of dollars need to be spent on feasibility studies, usually by foreign consultants. Then the biddings take months to finish. Most end up rigged for administration cronies. Local officials also cut in with land speculations or outright extortions. As of end-2015 the Aquino admin had 14 un-started PPPs, more than it had bid out since 2012. The 14 are mostly airports, wharfs, railways, toll roads, hospitals, and a new national penitentiary.

By their very nature, unsolicited proposals shut out kickbacks and unnecessary political accommodations. Planning and execution is at no cost to government. The original proponent bankrolls the studies and judiciously hires subcontractors. For cost efficiencies it relies on built-in strengths: Metro Pacific, for instance, on international experience and contacts; San Miguel, on cement and petroleum subsidiaries. Because less costly to implement, unsolicited projects give the public cheaper yet better service, say, in airports, toll roads, and transportation.

Submitting to the Build-Operate-Transfer concept, unsolicited proponents do not factor in kickbacks. A superbody, the National Economic and Development Authority, reviews, improves, and approves the project. As parallel to transparency of regular biddings, there are Swiss challengers with equally clean and efficient counter-offers.

The Aquino group mistakenly broadcast that its predecessor’s unsolicited projects under the B-O-T were dirty. In truth, it was referring to such opaque Arroyo administration deals as the National Broadband Network, Diwalwal mining, and North and South Rails. Those were not B-O-T projects but secret G-to-G (government-to-government) deals with China. There were no competitors with Swiss challenges. Beijing simply chose the lending bank and the implementing state corporation.

The Arroyo crooks made dirty money from those G-to-Gs. Aquino crooks profiteered from the PPPs and permutations.

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