Can they deliver?
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - October 21, 2019 - 12:00am

Finally, President Duterte is getting impatient with the extremely slow pace of the implementation of infrastructure projects. He should. In this country, the legacies by which presidents are remembered are made of steel and cement.

This is probably why the President appointed Vince Dizon, CEO of BCDA as a special presidential adviser for flagship projects. He wants someone more energetic than the Cabinet members responsible for Build Build Build.

But this was what I was saying from early on. Duterte needs a foreman… a capataz, so to speak, to make sure the rollout of infrastructure projects happen on the ground and not just in press releases or Facebook memes.

Vince is probably as good a choice as the President has at this point. The construction of projects at Clark has been going on smoothly from the start. It helps that Vince is from Pampanga and has a strong incentive to see Clark emerge as an alternate to Metro Manila as soon as possible.

Vince is also lucky that the airport terminal that is about to be completed was won in a transparent public bidding by Megawide. It is the local construction company that built and operates Mactan Cebu International Airport.

Actually, it would have been better if the bidding terms followed the Mactan formula. It would have been seamless from construction to operation. I heard Changi has its own ideas on things like passenger flows after construction is almost done. That will now cause delay and added costs.

But Vince delivered the villas used for a few hours by APEC head of states and is likely to deliver all the venues for the Southeast Asian games on time. Indeed, the only visible projects started and to be delivered within the Duterte term are so far those managed by Vince.

The only other doubt about Vince’s capability to deliver has to do with the widening of that main road in BGC that is two years delayed. But that can be blamed on DPWH. Still, why trust DPWH for a project right on BCDA’s front yard?

First order of business is to assess the status of the original 75 projects in the Build Build Build work list.

I imagine the list was haphazardly made amidst the euphoria of Duterte’s early days. They were talking then of working 24/7 to deliver a golden age of infrastructure. Reality has set in after three years.

Key consideration is the ability of infrastructure agencies to absorb all that money for the projects. According to a Bloomberg story, Vince is evaluating the projects in the list and now admits not all will stay in the priority list.

“Projects ‘deemed unfeasible at this time’ were dropped after a review of the original 75 projects in Duterte’s $180-billion Build Build Build program,” Vince was quoted as saying.

They are also starting to realize that they need more PPP projects after all. “Added to the list were some unsolicited proposals and others being considered for tender under the public-private partnership program, he said.”

So, the interagency Investment Coordination Committee (ICC) and Infrastructure Committee (InfraCom), shepherded by NEDA, is coming up with a better pipeline with more projects that can be started and, hopefully, finished before Mr. Duterte ends his term in 2022.

The latest NEDA status report on the progress of Build Build Build as of July, showed only 21 projects worth P187.6 billion out of the 75 flagship projects worth a total of at least P2.4 trillion will be finished in 2022.

As of mid-2019, only nine are under construction.

Of the 75 Build Build Build projects, 20 are under project development, five for review, and four are awaiting government approval.

Construction of three other PPPs via joint venture—Clark Green City’s government center, commercial center and mixed-income housing—all part of the National Government Administrative Center in New Clark City, were 65-percent complete in April.

Also under construction were three China-financed projects: the Chico River Pump Irrigation Project whose physical accomplishment was at 57.22 percent and two bridges—Binondo-Intramuros Bridge (8.65 percent done) and Estrella Pantaleon Bridge (20.56 percent done).

Two projects funded by GAA, Bonifacio Global City to Ortigas Center Road Link Project Phases 1, 2A and 2B was 33.79-percent completed; while Malitubog-Maridagao Irrigation Project Phase 2 was 57.46-percent done.

Vince sounded positive about PPP, a change in official tune. He was quoted in media reports saying emerging big-ticket projects to be rolled out by the private sector might be included in the Build Build Build pipeline.

But they are partial to so-called hybrid partnerships where the private sector takes on operations and maintenance, such as the approach for the Bohol Panglao International Airport. That’s a good move since government is notorious for its inability to manage and operate vital transport infrastructure, particularly airports.

Incidentally, the other big project, another bridge connecting Mactan to Cebu City is being undertaken as PPP --- a partnership between LGUs and Metro Pacific.

Absorptive capacity is at the crux of government’s inability to meet the high expectations they have set for Build Build Build.

Recent Commission on Audit (COA) reports show that the DOTr and DPWH have been experiencing difficulty in spending their annual budgets. The DPWH spent only one-third of its allocated budget in 2017, while the DOTr spent only 26 percent in 2017, and 21 percent in 2018.

If DOTr did not scrap the package of five regional airports that was ready for bidding as PPP when they took over, they would have inaugurated some, if not all of them, by now. As it happens, they are still trying to fine tune the terms of reference for new bidding.

Additionally, BBB wouldn’t have been affected by the late passage of the budget bill this year and the long negotiations for ODA with China.

With less than three years left, it is doubtful they will be able to deliver a golden age of infrastructure that they promised. But we surely need to have a good conversation on PPP, given government’s lackluster ability to implement big infra projects we badly need.

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

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