NEWS

By Cai Ordinario

THE slowdown in advanced economies may be one of the reasons the national government has decided to increase the number of public-private partnerships (PPPs) in its list of flagship projects.

The MRT-LRT Common Station Project was renamed the Unified Grand Central Station on the revised flagship list.

Economists such as Rene Ofreneo told the BusinessMirror that at least one of the government’s major sources of official development assistance (ODA), China, is expected to post slower growth.

Based on a list submitted to the House of Representatives (HOR) on Wednesday, 26 of the 100 flagship projects will be funded wholly or in part by the private sector.

“Siguro may mga nakausap nga siya [President Duterte] na magbibigay ng ODA, even China nga eh, kitang-kita mo naman ang China may economic slowdown [Maybe the President was able to talk to development partners, even China, but as you can see, China is experiencing an economic slowdown],” Ofreneo said.

In its Asian Development Outlook Update, the Asian Development Bank (ADB) forecast the Chinese economy to post a growth of 6.3 percent this year and 6.1 percent next year.

Japan and the United States, other ODA sources, are also expected to post slower growth next year at 1.9 percent and 0.6 percent, respectively.

The San Miguel effect
Apart from slower growth, Ofreneo said it is also possible that the granting of San Miguel’s unsolicited proposal for the New Manila International Airport encouraged more businesses to participate in public infrastructure projects.

Ofreneo said this means the government needed to provide more options to allow them to come in and participate. “If Ramon Ang can do it, bakit hindi [why can’t]some other taipans?” he said.

Meanwhile, another reason for the increase in PPP projects in the flagship could be the need to improve project implementation.

A former government bureaucrat who requested anonymity said the President has yet to weigh in on the implementation issues at this point.

The former official said there could also be some “bureaucratic fear” surrounding project implementation, which may lead to charges filed by the Ombudsman and disallowances by the Commission on Audit (COA).

“Bureaucrats [are] not rewarded for decisive implementation, but charged for minor infractions and even if they make correct decisions,” the source said.

The source added, “bureaucrats about to retire do not want to take any risks for fear of losing their retirement benefits due to COA disallowances.”

The former government official also said some of the presidential appointees may lack the qualifications needed to implement projects and programs of the government.

With little capacity or incentive for the government agencies to implement, allowing the private sector to undertake projects may be a better option to ensure that projects are completed, the source said.

11 under PPP
Based on the list obtained by BusinessMirror, of the 26 projects, 11 will be financed through various forms of PPP schemes.

Another 13 will be funded via PPP, but these are all unsolicited projects. The remaining two will be wholly funded by the private sector.

The list also showed that 50 projects will be funded through ODA and 22 will be funded by the national government.

One project still has no mode of financing while another one will be funded through the national budget and another institution. Comparing the list of 100 flagship projects to the original 75 projects, around 35 projects were obtained from the original list last updated in July 2019.

However, these 35 projects include two projects that had several components taken off the list of flagship projects.

Projects in the China Grant Bridges project include two items—the Binondo Intramuros and Estrella-Pantaleon bridges—that were initially treated as individual undertakings in the list of 75 projects.

Another project is the Pasig River and Manggahan Floodway Bridges Construction Project which contained five projects that were individual undertakings in the list of 75 projects. These projects are the North and South Harbor; Beata-FY Manalo; Palanca-Villegas; East-West Bank 2; and Blumentritt-Antipolo bridges.

Another project in the original list, the MRT-LRT Common Station Project, was renamed the Unified Grand Central Station in the revised flagship list.

Source: Business Mirror