Aquino has P1.5-trillion PPPs ‘gift-wrapped’ for Duterte

The Aquino administration has “gift-wrapped” a pipeline of infrastructure deals worth P1.5 trillion to the team of President-elect Rodrigo R. Duterte, topped with recommendations on how the new government will be able to speed up their implementation.

Delighted to hear that the next administration has included infrastructure development on its 10-point economic agenda, Public-Private Partnership (PPP) Center Executive Director Andre C. Palacios expressed his confidence that Duterte’s economic team will further drive growth to the program.

“We have gift-wrapped for the new team a pipeline of 53 projects worth P1.5 trillion. These projects are inter-generational endeavors, with 20-year and 30-year contracts spanning several presidencies. We are confident the new team will turn over a bigger, longer pipeline to the next team in 2022,” Palacios told the BusinessMirror.

Palacios noted, however, that the future chief of the agency will have to do three things to make the program sustainable and successful.

“One lesson is to follow the best practices developed for Philippine PPPs, which we are seeking to institutionalize through the PPP Act,” he said.

The outgoing administration has been pushing for the bill to be passed into law, as this concretizes the learnings of the agency from previous hiccups in implementing deals under the program.

Such a piece of legislation, which essentially is the amendment of the build-operate-transfer law, however, is now at the mercy of the next set of lawmakers, as the 16th Congress failed to pass the bill into law.

When approved, the PPP Act will institutionalize the Project Development and Monitoring Facility, the PPP Governing Board and the contingent liability fund.

The proposed amendments include the separation of regulatory and commercial functions of government-owned and -controlled corporations and create a list of projects called “projects of national significance.”

By virtue of being included on the list of projects of national significance, projects will be “insulated” from local laws, among others by local government units (LGUs).

The proposed amendments also include allowing time-bound temporary restraining order and the extension of the period for Swiss Challenge to six months from the current two-month period.

Also, the said piece of legislation will give the executive director of the PPP Center a fixed tenure and will, likewise, make the said body a voting member of the Investment Coordination Committee and the Cabinet Committee of the National Economic and Development Authority (Neda).

Palacios said the next government must also conduct feasibility studies with the right set of experts to easily market deals to the private sector.

“Another lesson is to get the right experts to do a proper feasibility study during project preparation,” Palacios said.

There were several deals that had to undergo a second round of procurement due to their commercial inviability. For example, no party submitted a bid for the P122.8-billion deal to construct the Laguna Lakeshore Expressway Dike.

Interested groups said they have three issues on the project: economic viability, problems with connectivity and the complexity of the deal.

By getting the right set of experts in reviewing infrastructure deals before launching them, the government may avoid seeing such a misfortune.

The third point, Palacios said, is to hold “early engagements” and market soundings with all the stakeholders that will be involved in infrastructure deals. With this, issues, such as the lack of engagement with LGUs and business groups, may be dodged.

“We look forward to briefing the new PPP team, and sharing lessons learned for faster implementation of PPP projects. From preparation, approval, bidding and implementation of PPP projects, the Philippines is one of the fastest in Asean, the most improved in Asia-Pacific, and on a par with developed countries like United Kingdom and Australia,” he said.

Since the program’s launch in 2010, the government has awarded 12 projects with a cumulative worth of P217.4 billion. There are still several projects under the program that are currently under procurement.