Projects in advanced stages

The President’s economic team should learn to keep expectations low even as they make sure those in the implementing agencies deliver big.

Economic Planning Secretary Ernie Pernia, a no nonsense low key kind of guy before he joined government, raised some eyebrows with his presentation last Wednesday at the Management Association of the Philippines.

Sec Ernie made another iteration of the administration’s Build Build Build infrastructure program which most likely elicited some yawns. He bravely listed nine projects with a combined cost of about P738 billion and said the projects are in the advanced stages.

Ano daw? Advanced stages of what? Baka advanced stages of decomposition kasi most of the projects have long been buried by the transportation department.

Is Ernie Pernia staking his reputation on the ability of DOTr to deliver those projects? I know Sec Ernie is a man of faith, having been once upon a time a seminarian or probably even a priest. Sure, faith can move mountains, but it is reasonable to doubt faith could move our transport department.

Teka muna… definition of terms first. Apparently, when government bureaucrats say projects are in an advanced stage, they mean the projects are ready to be presented to the NEDA board for approval. They are not saying they will be able to execute quickly. Indeed, what we need is reassurance on precisely this point… that they will be able to execute quickly.

So many projects have been approved by the NEDA board in the past that were not executed or took an awful long time to execute. NAIA modernization was approved by the NEDA board as was the bundled modernization of five domestic airports. Both were scuttled by DOTr. So… keep your expectations low.

Transport projects in the “advanced stage” list include: Mega Manila Subway Project – Phase 1 (P230 B), PNR Long-Haul Calamba-Bicol (P151 B), Malolos-Clark Airport-Clark Green City Rail (P150 B), PNR South Commuter Line Tutuban-Los Baños (P134 B), Mindanao Railway Project Tagum-Davao-Digos (P35 B) and Clark International Airport New Terminal Building Project (P15 B).

Other projects include: New Centennial Water Source-Kaliwa Dam Project (P11 B), Cavite Industrial Area Flood Management Project (P9 B) and Chico River Pump Irrigation Project (P3 B). Not one is under the Public Private Partnership or PPP scheme.

The Duterte administration is seeking ODA financing from China and Japan for most of the projects. The Mindanao Railway and the new Clark Airport will be financed by the General Appropriations Act or GAA.

Hmmm… I thought China or Japan was interested in financing the Mindanao Railway. That it is now going to be financed by GAA means the usually bullish donors have doubts about the viability of the project… so it is okay to waste the money of Filipino taxpayers on it.

An expert in transport systems who is consulted by financial institutions and governments in the region, posted in a Viber group what he thought about the Pernia presentation:

“In the minds of tyros (who have not implemented an infra project in their previous incarnation), completion of a quickie study and approval by NEDA (fearful of being labeled theoretical obstructionists) is advanced stage.

“Take Mindanao Railway. No geodetic survey done yet to delineate ROW for 101-km length, and they imagine construction can begin 2018, and be completed in 2020! TPLEX is shorter @90-km; started surveys way back 2005, got NEDA approval in 2009, opened 17-km section in Nov 2013.

“Railway is more complicated than an expressway. If a child cannot solve a supply problem of motor vehicle plates after one year, can you expect him to deliver a fully-functioning railway in three years? Maybe, in their minds. Or maybe, assembling an electric DIY toy railway.”

Same thing with the Metro Manila subway. I admire the rah rah rah spirit of DOTr Sec Art Tugade, but if it will take two more years to deliver the stations and the other components of a four kilometer extension of LRT 2, how can he deliver a subway system by 2024 as he is promising now?

I have no doubt Sec. Tugade does not lack the willpower to deliver. But DOTr has a very shallow technical bench. That wouldn’t have been a big problem if they were doing PPP because the private sector proponent will be able to get whatever technical consultancy the projects need.

Indeed, we could have very big problems with the ODA funded projects, specially those by China. Who will supervise the execution of those projects from within the bureaucracy? Hopefully, they have budget for hiring the right consultants to do that to ensure top quality execution.

It was the same problem during the last administration. It came to a point that when I pressed then Budget Secretary Butch Abad why the long delay in project implementation, he had to admit it was because of what he called “a technical deficit” in the bureaucracy to carry out the projects.

A foreign consultant familiar with the workings of DOTr and its agencies told me that from his experience, the technical people in the transport agencies lack up to date exposure to international trends in building and maintaining public infrastructure. They concentrate on shuffling papers through the bureaucratic labyrinth.

Can Secretaries Pernia and Tugade tell us that change has come in their bureaucracies?

If the economic managers (including Budget Sec. Ben Diokno) want to reassure the local business community that they can carry out what they are promising, they have to talk about how they have changed the bureaucracy and its processes.

They have to show us timelines with commensurate penalties on the department secretary for missing important milestones. They will have to tell us how they will mitigate this “technical deficit” in the bureaucracy specially because they now prefer to use the national budget to fund some of the projects.

Until then, we cannot blame one private sector executive for his reaction: “Already saw Dr Ernie’s APPP* (*Another PowerPoint Presentation). Nice. But what we sorely need is COMPETENT EXECUTION.”

Is it so difficult to stake their reputations and give us this reassurance?

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