Motherland

While, in this part of the world, our focus was distracted by the mystifying disappearance of a Malaysian Airlines plane en route to Beijing, the fast-moving crisis in Ukraine continues to evolve.

As Russian troop convoys roll into Crimea, the Russian Navy was reported to have scuttled several ships to blockade the Ukrainian Navy and keep them trapped in their own bases. Ukrainian Army forces in the contested peninsula have likewise been trapped in their bases, surrounded by Russian troops operating without insignias.

The US Navy, for its part, sent two warships to the Black Sea for previously scheduled naval exercises with Bulgarian and Romanian ships. Additional US Navy ships are being deployed to the Baltic Sea apparently to reassure Poland, Lithuania, Estonia and Latvia. The former vassal states of the erstwhile Soviet Union are wary of the final consequences of Russian action in Ukraine.

The deployment of US Navy assets is part of the general effort to put pressure on Russia. It is unlikely, however, that the diplomatic measures so far undertaken will impress Vladimir Putin.

A few years ago, Moscow sent military forces into neighboring Georgia. After a lopsided military confrontation, and notwithstanding strong objections from the western powers, Moscow managed to extract two Georgian provinces populated by ethnic Russians.

A similar objective inspires Putin’s maneuvers in Crimea, with its majority Russian population and host to strategically vital bases for the Russian Navy. There is no doubt that the referendum called for this weekend will produce either Crimea’s outright annexation or an arrangement very close to that.

Putin once observed that the greatest geopolitical calamity of the late 20th century was the break-up of the Soviet Union. His personal historical mission, it now appears, is to restore as much of the mythical motherland as he can.

In order to understand Moscow’s (and Putin’s) behavior in Ukraine, one has to look deeply into the Russian soul. For centuries, Russia looked at the immediately surrounding nationalities as crucial buffer zones to protect the homeland. That is the passion that drove the Tsarist empire, the same one that animated the creation of the Soviet Union.

With former vassal states leaning more closely to the West, Russia feels naked and vulnerable. Moscow will tend to take more risks in order to consolidate the old order. Ukraine’s effort to join the European Union is a bad example for all the others who choose to continue behaving like the old vassal states they were.

Hotshot

There appears to be a new kid on the block, a real hotshot challenging the big boys in the infrastructure game such as Ayala, SMC, Metro Pacific, JG Summit, Filinvest and the Consunji group.

Until the Megawide group began aggressively bagging government projects, it was little known outside the contracting circuit. Today, with this administration’s much-vaunted and incredibly delayed PPP projects finally beginning to roll, Megawide bagged three of the six projects bid out. That is not a bad score for the new kid on the block.

Megawide has been in the news lately for two controversial projects: the Mactan-Cebu airport project and the modernization of the Philippine Orthopedic Center.

The Mactan airport project is being contested by the runner-up in the bidding. The Gotianun-led consortium raised questions about the financial viability of GMR Infrastructure Corp., Megawide’s partner in this huge project. Serious conflict-of-interest issues have likewise been brought before the DOTC’s post-qualification panel.

Cebuano leaders likewise oppose the award of the airport project to what they consider a questionable corporate entity. A congressional hearing is, in fact, scheduled for tomorrow. It is expected to air all the issues raised against Megawide.

There will likely be hearings called on the P5.68 billion Philippine Orthopedic Center project awarded to Megawide. The entire project actually involves the construction of a single “medical complex” grouping the Fabella hospital, the San Lazaro Hospital and the Jose Reyes Memorial Medical Center with the orthopedic hospital.

Militant legislators question the design of this project, saying it will raise the costs of vital medical services and harm the poor. The party-list group Gabriela is heading the campaign to stall this project.

Should Megawide surmount objections and win the Mactan project, the company will require financing in the vicinity of P48.4 billion for all the PPP projects it has bagged. That is a large volume of financing even for the established conglomerates Megawide beat to the draw. It will definitely be a challenging proposition for the new kid on the block.

Megawide has little demonstrable financial clout to support the requirements of all the projects it has thus far cornered. If it fails to raise the required financing, half of the already much-delayed PPP projects will be in jeopardy.

The business community is abuzz with the sheer audacity of this new kid. There is as much curiosity about its apparent political clout as much as its financial adventurousness. It is one thing to win the bidding (which is all paperwork) and quite another to deliver the projects (which requires real financial and engineering acumen).

The government agencies in charge of delivering these vital projects ought to take a long, hard look at this new kid on the block. The due diligence must be done with real diligence. There is a large gamble being taken here.

The much-delayed but much-ballyhooed PPP program could, by sheer recklessness, implode from centerpiece program to a magnificent fiasco.