Infra standstill: Risk aversion or incompetence?

People keep on asking me why the P-Noy administration has fallen flat on its face in the area of constructing vital infrastructure. The only major project they are claiming to have completed, the Laguindingan Airport in Cagayan de Oro was initiated during the Ate Glue watch.

The portion that was the responsibility of the P-Noy watch was even botched by DOTC. They forgot the airport needs air navigation and night landing facilities. So they inaugurated the airport with only visual flight rule in place. The ILS (Instrument Landing System) and other vital facilities will come later.

Another agency under DOTC forgot that the new airport needs a good public transport system. LTFRB should have been issuing franchises for buses and jeepneys but they thought of doing that too late. I was told of a Manila-bound Cebu Pacific passenger who had to pay a taxi P800 to get to the airport. His plane ticket was P300.

In answer to my question, I am inclined to believe that incompetence is the basic reason why P-Noy’s boys have failed to put up infrastructure projects over the past three years. But there are those who say it is an acute case of risk aversion… as in a fear of signing any contract that may end up with the Ombudsman and will bug them way after they are out of office.

They are most likely thinking they cannot be sued for corruption if they do nothing… but they risk a Sandiganbayan case if they signed anything related to a project. But it is so unfair to the public if P-Noy’s boys just dribble the ball all the way to June 30, 2016 while the economy suffers from inadequate infrastructure.

In a way, risk aversion is just part of the excuse. We have so structured our procurement process in government so that honest bureaucrats could be harassed by a disgruntled bidder even as the dishonest gets away with ill-gotten loot scot free. That pork scam is proof the system does not discourage the determined thieves.

But there is no excuse for doing nothing. Accepting a post in government carries some risks. If they are not willing to take those risks, why did they take the positions?

So I go back to incompetence as the most plausible explanation for P-Noy’s infra failure. Budget Secretary Butch Abad called it a “technical deficit”. Worse, they have made some wrong calls in the few instances they did something.

That Daang Hari connection to SLEX is a good example. It was already being done by PNCC and NDC when DPWH decided to take the project as its contribution to the PPP basket. The project was already 30 percent done when PNCC was ordered to stop.

The Daang Hari project would have been completed by December last year if DPWH didn’t intervene. There was no good reason for the DPWH intervention anyway. What has been completed has been exposed to the elements and may have to be redone. Such waste of scarce public resources!

And there is still a good chance Ayala, the winning bidder, may abandon the project because of continuing disputes on the design. The project is not moving on the ground where it counts.

It was disappointing to the business sector that P-Noy’s PPP didn’t get anywhere. They started off with so much hoopla and eagerness to build new airports, highways, seaports, bridges and power plants. Then the same cabinet members with the loudest voices for PPP turned out to be the most risk averse, setting roadblocks for implementation.

For a while I thought it was just because the first blast for PPP was led by Finance Secretary Cesar Purisima at a time when Mar Roxas was still licking his wounds of defeat at the hands of Jojo Binay. Cesar was then the acknowledged head of the economic cluster.

When Mar joined the Cabinet, he understandably wanted to be the primus inter pares of this group but Purisima is already enjoying the aura. There were rumors of a rift, surprising as Purisima started off as a Roxas supporter.

Purisima’s early sponsorship of PPP was probably why Mar torpedoed PPP. Mar wanted to take the ODA route because of cheaper financing terms, even if this is not always true. As Mar exited DOTC, he was already talking about a hybrid. Bottom line is… nothing happened and nothing is happening still.

What became clear was the fact that money is no longer a problem even for big ticket infrastructure. There was so much money sloshing around that the banks and private sector entities like Metro Pacific and San Miguel, among others, were raring to risk their own capital to build those much needed infra projects.

Indeed, the only real practical use of that credit rating upgrade was the potential ability of local entities to borrow cheaply abroad to augment their local resources for these vital infrastructure projects. We seem to be at the verge of losing that window of opportunity or have actually lost it. The bureaucracy just couldn’t make decisions quickly enough to make things happen.

In an interview of Dax Lucas of the Inquirer, Jose Ma Lim of Metro Pacific cited the elevated NLEX-SLEX “connector road” project as a good example of why the private sector had been demoralized.

“Take our connector road. It was delayed for one year because the Department of Transportation and Communications wanted a provision for the high-speed train,” he said.

“At that time, it was unclear whether the [government’s] strategy was to have one airport or two [servicing Metro Manila]. We said, if you want us to proceed, we’ll provide for it. But there was a debate as to how much space provision [for right of way] was needed for future requirements.”

“Eventually, the DOTC gave the approval, one year delayed,” Lim said. But government imposed fresh requirements that entailed more time and additional costs, all of which were met by the company. “In spite of that, wala pa rin (we still don’t have it). It’s been three years. What else do they want from us?” he said.

The rival connector road project of San Miguel is not doing any better. It had been tossed around the bureaucracy, from DPWH, DOTC, DOF, NEDA and DOJ. It is supposed to be on a final approval process with NEDA until Sec Purisima objected to having PNCC as part of the deal.

I will not get into the details of the current debate on whether PNCC lost its right to be included when it lost its franchise or if the Marcos decree mandating their inclusion should prevail. The DOJ was supposed to have ruled again on the issue but the last I heard, the ruling was neither here nor there so nothing will happen there still.

Sayang… because both Metro Pacific and San Miguel are eager to get their projects going! Having those connector roads will also ease a lot of EDSA traffic. The bureaucrats are playing bridge when they should be building bridges. The last time I talked to Sec Purisima about this new delay, he told me he is just protecting his boss, the President.

But aversion to risk can be overcome as the DOTC bureaucrats did. They signed a fairly large MRT 3 contract just based on a questionable canvass. A Meralco subsidiary already denied sending a bid as DOTC claimed.

I understand that the contractor they got was not even registered at SEC, at least as of November last year when the first of several “emergency” contracts was awarded. And I heard even GSIS refused to cover it so they probably don’t have insurance now. Pray no accidents happen in the meantime.

Against my better judgment, I am still trying to convince myself P-Noy will crack the whip and get his infra projects going. He won’t inaugurate any of those but at least he should be able to say they broke ground on his watch. I am lowering my expectations drastically. Sad.

Pork scam

This P10 billion pork scam is simply horrible. Probing this scam is the prime test of P-Noy’s Daang Matuwid.

I understand the principal woman in the scam is a very “religious” person and is known to be generous to Catholic priests. In one recent event, she was said to have over 30 priests concelebrate the Holy Mass.

Those priests have the moral obligation to counsel her to come clean and suffer the consequences. The Church must protect its credibility.

Kim Henares should also check if the lavish lifestyle of that woman is justified by the taxes she paid. I have more confidence in Kim doing her job than any investigation by other bureaucrats. The Al Capone strategy to get the crooks is our hope for justice.

Why

Question: Why is sperm donation more expensive than blood donation?

Answer: Because it’s HANDMADE!!

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter@boochanco