Let private sector help
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - April 1, 2019 - 12:00am

In the course of a very vibrant exchange in one of my Viber groups, a government technocrat pointed out that there is also an opportunity cost for government when the private sector builds or takes over public infrastructure like airports. He pointed out that government stands to lose concession fees and other airport charges.

I was disappointed that the comment came from an official who should know better, based on his credentials. It isn’t the mission of government agencies to contribute to government coffers. The agencies may recover costs, but their main obligation is to provide the services in a world class manner… efficiently.

I guess this is why I sense a strong hesitation on the part of government to allow NAIA to be managed by a strong consortium of the country’s top conglomerates.

And turning the tables around, DOTr Secretary Art Tugade issued an ultimatum to the consortium to conclude negotiations this month or lose the opportunity to do the NAIA rehab project.

 I had a foreboding of this government attitude when I traveled to Sapporo last week. I noticed that Terminal 2 was already being rehabilitated. I don’t know the nature of the work they are doing, but if they only acted faster on the proposal of the consortium, the taxpayers don’t even have to spend for what they are doing now.

So, it is turning out, the original proponent status that the consortium got for the NAIA rehab was just for show. Indeed, the NAIA GM had been quoted several times saying in so many words that government can do what the consortium proposes to do.

Perhaps it could, but how fast and how good are questions to ask. Based on past records of performance, we have good reasons to doubt. They constantly blame government procurement requirements for their inefficiency.

Note that the consortium is being advised by Changi, the same guys who run the best airport in the world. I doubt if government airport managers can top that.

Every time a Filipino travels around Asia and the Middle East, he sees the shortcomings of our government in managing our airports. Here is one example.

The Chitose International Airport in Sapporo, Japan is not a large airport, but it can immediately draw ohhs and ahhs from any Pinoy.

It is clean, it is airy, and very modern. Yet it serves a population of just about two million. It is about 50 kilometers from the city center of Sapporo and has a rapid train service that covers the distance in 37 minutes at a cost of about P500.

The train drops off airport-bound passengers right at the airport terminal… so totally convenient. The seamless transfer is something we can only dream of. But then it is Japan and nothing less is expected of them.

Still, I believe Filipinos are capable of approximating the convenience and quality of service the Sapporo airport provides. Megawide is already showing Filipino capability in Mactan Terminal 2.

 Our government can’t be expected to approximate the efficiency and honesty of the Japanese government, which is why our private sector must be allowed to help.

Unfortunately, Finance Secretary Carlos Dominguez was reported to have observed that PPP infrastructure projects take too long to implement. Sec Sonny cited the NAIA rehab project.

He recalled that the OPS status was granted to the consortium in September last year “and that was a year after we first met. It is now 2019 and the project has not yet started.” He also cited CALAX or the Cavite-Laguna Expressway project, which he said, took the private sector five years to implement.

Teka muna… in both examples, I am under the impression that it was the government that failed to act more quickly. In the case of the airport, the negotiations are dragging because it seems government is not inclined to let the consortium do the project anyway. Nag-da-drama lang.

On CALAX, it is government’s failure to provide the right of way on time that has been the major hindrance to a faster implementation. This had been the case for many infrastructure projects, including the much needed NLEX-SLEX connector road project of San Miguel.

It makes no sense for the private proponents to drag their feet. Delay costs money. As the CFO of a private company told me, they are paying commitment fees for money they have already borrowed, but are unable to use due to delays in government permits, ROW, and other such things.

That is also the case for the Bulacan airport proposal of San Miguel. They have to pay commitment fees to their creditors while waiting for the go signal to proceed. Now DOTr is saying the go signal may come in the third quarter yet, not in the second as originally announced. San Miguel is raring to go.

I can understand why Sec Sonny is getting a bit testy in the light of continuing discussions on whether to do the Chinese funded Kaliwa dam or do the Japanese proposed weir instead.

I agree with Sec Sonny that we should get started now and the period of discussing options is over. We have been talking about doing Kaliwa for 40 years now.

What I think government should do is tell the public how they will facilitate execution of the Kaliwa project in the light of the long-standing opposition of local residents at the dam site.

It is reasonable for many to have doubts the Kaliwa project can be done quickly because the local opposition to the project had derailed it in the past. Why is it different now? Political will? Maybe.

There simply is so much infrastructure to build and government cannot do it all by itself. It has to welcome private sector help. After all, there is private appetite and financial liquidity to support such projects.

The bottom line is simply, we needed those infrastructure projects 10 or more years ago. It doesn’t matter who builds all those. Just get those projects operational soonest. Working together is the only way to go.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

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