ODA not faster after all

While there is still time, President Duterte’s economic managers should eat humble pie and admit that depending on official development assistance or ODA for Build Build Build isn’t proving to be faster after all. Chinese funding, for example, isn’t getting beyond promises.

Economic Planning Secretary Ernesto Pernia admitted during a news conference last week that there are delays in some projects funded by ODA.

“There’s also a lot of red tape on the side of ODA (donor-) countries. We thought that things would move fast, but they are not moving as fast as we expected,” he said.

Expressing impatience, Dr. Pernia said the government is prepared to shift to other financing modes if ODA projects continue to be stalled. “We were also discussing among ourselves, that if there are too many delays from a particular funding source, we are going to give them a deadline.”

Dr. Pernia was particularly referring to China. He said: “We haven’t had much experience with them in the past. We thought it would be fast…”

Pernia also explained the government is “extra careful” in dealing with funding from China due to the negative experiences of countries whose major projects were funded by China.

“Given the various experiences already felt by the other countries that dealt with China, we are even more cautious — we are extra careful — in having projects funded by China,” said Dr. Pernia.

Finance Secretary Sonny Dominguez, however, announced eyeing possible loan assistance from China-led Asian Infrastructure Investment Bank (AIIB) for the construction of health care facilities, school buildings, and roads in the country.

China is already committed to finance the P4.37-billion Chico River Pump Irrigation Project with an interest rate of two percent per annum and 20-year maturity inclusive of a seven-year grace period.

China is supposed to finance the P10.9-billion New Centennial Water Source-Kaliwa Dam Project, the P151.3-billion Philippine National Railway South Commuter Line, the P57.6-billion Subic-Clark Railway, the P25.63-billion Davao City expressway, and the P27.16-billion Panay-Guimaras-Negros Inter-Island Bridge.

But implementation of projects financed by Japan ODA has also been slow. Actual groundbreaking will require Japanese technical experts to finalize plans and many of them are still busy building facilities for the 2020 Tokyo Olympics.

Indeed, if our economic managers allowed ready-for- bidding PPP projects to proceed, like the bundled airports, they would have had something to show by now. Last I heard, DOTr has yet to do a new feasibility study for each of the five airports, something the private bidders already did.

The economic managers need a good reality check on BBB and the hindrances to the timely completion of vital projects. Only Secretary Pernia seems honest enough to tell us they have ODA problems. There are also other problems internal to the bureaucracy they can fix.

The LRT-1 extension to Cavite can’t proceed to actual construction because the wrong right-of-way was secured by the past administration.

LRT-2 extension to Masinag, Antipolo won’t be completed soon because of failed bids for the rail tracks, catenary, and signaling system. The estimated cost was circa 2012, failing to account for increased costs in the meantime. Budget Secretary Ben Diokno must look into it and give the additional budget required.

The NLEX-SLEX connector road project that will cut EDSA traffic by half is going on at a snail’s pace because of ROW problems in the Pandacan area, among others. DPWH Sec Mark Villar has not given it the kind of attention required. The DPWH ROW team is not enthusiastic because they say, they only inherited the assignment from the Toll Regulatory Board (TRB).

Sec. Pernia is claiming they will complete 32 of the 75 flagship projects by 2022. Pernia’s optimism is based on 16, or the 32 projects, having been given the final green light by NEDA to proceed to procurement stage.

It seems NEDA officials are under the impression that just because they were able to get some major projects approved relatively quickly, they have done their job and things will get going. But bottlenecks still exist on the ground. Talk about BBB is cheap.

Even unsolicited proposals where funding is not a problem, NEDA approval has not resulted in fast implementation. A case in point is the San Miguel proposal for a brand new international airport which is still awaiting Swiss challenge before getting final approval.

Yet, Sec. Pernia said “We must keep the infrastructure momentum and make sure there are no delays. We are determined to close the infrastructure gap.”

We can appreciate the good intentions expressed by Sec. Pernia but it is what happens on the ground that counts. We are seeing more bureaucratic inertia than momentum right now.

Unless we start to see some of their much ballyhooed flagship projects get started, it is difficult to believe they will be able to complete their projects before President Duterte ends his term in 2022. At the very least, cement needs curing time, so rushing at the homestretch isn’t possible.

So far, we are seeing the same narrative we saw with P-Noy’s Mar Roxas and Jun Abaya who had allowed valuable time to slip by. Indeed, two years of the Duterte watch has come and gone with no major infra project started by DOTr. They have yet to fast track private sector proposals that require no government funding or guarantees.

Hopefully the Duterte economic managers will not let hubris dictate their reaction to the very real problem of lack of speed in project execution. An early big shift to PPP may yet save the face of this administration that promised high and is in danger of delivering little.

Perhaps the only reason there seems to be an increase in infra expenditures is due to DPWH’s penchant for destroying still usable roads and repaving them, but delivering zero additional kilometers. Not only does this contribute to worsening traffic jams, but wastes scarce public resources.

That’s the story of our lives.

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