#Throwback2014: The PPP program, four years on—still in need of improvement

 

This has prompted the PPP Center,  the state agency tasked to review PPP projects, to pursue amendments to the Build-Operate-Transfer (BOT) Law.

 

PPP Center executive director Cosette Canilao said the case of the CALAX is an indication that there is still "room for improvement" for the PPP program.

 

"This is the reason the PPP Center is pushing for the amendment of the BOT Law, to further improve and streamline the PPP processes and institutionalize the initiatives and policy enhancements that government has put forward in the last four years," she said.

The rebidding of CALAX is already approved by the Investment Coordination Committee-Cabinet Committee and is targeted by the first quarter of next year. President Benigno Aquino III has decided to rebid the project that was auctioned in June.

 

The PPP Center is eyeing amendments to the BOT Law by the first quarter of 2015. Measures are currently pending at the Senate and House of Representatives, according to Canilao.

 

Ramon del Rosario Jr. president and CEO of property developer Philippine Investment Management Inc. (PHINMA) and Makati Business Club chairman said the proposed measure will enhance the centerpiece program.

 

"The passage of the BOT Law Amendments or the PPP Act will define standards, further encourage private sector participation, reduce red tape and improve transparency," he told GMA News Online.

 

At present, the program is covered by Executive Order No. 8 issued in 2010 which reorganized and renamed the Build-Operate and Transfer Center to the PPP Center and transferred it to National Economic Development Authority from the Industry department.

 

"Our aim for next year is to primarily pass BOT Law amendment or the PPP act that will institutionalize all reforms that we've initiated," Canilao said.

Amendments on the table

 

Among the amendments being pushed by the PPP Center are to extend the period for a swiss challenge for unsolicited proposal to a maximum of six months, from the current two months; and to institutionalize the Project Development and Monitoring Facility (PDMF) or the agency's hiring of consultants for its projects.

 

The PDMF has "allowed implementing agencies to hire competent transaction advisors who are tasked to put together well-structured and bankable PPP projects," Canilao noted.

 

Also included in the proposed measure is the introduction of projects of national significance in the BOT Law to "insulate" the said projects from local laws.  

 

The government is currently bidding out 12 projects where bulk of it are infrastructure projects under the Department of Transportation and Communications and Department of Public Works and Highways.

12 projects in procurement
 

Canilao said this is the first time that 12 projects are simultaneously in the procurement stage.

 

It has auctioned off three projects this year, bringing the total awarded projects during the Aquino administration to eight projects. The three projects are: P1.72-billion Automatic Fare Collection System Project, P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building Project, and P64.9-billion Light Rail Transit Line 1 Cavite Extension and operation and maintenance.

 

April Tan, head of research for COL Financial Group, said there has been "obvious improvement" in the pace of roll outs.

 

"I also think that where PPPs have improved is that they have created a system on how to evaluate and roll out PPP projects," she told GMA News Online.

Critical point for govt

 

John Forbes, senior advisor at the American Chamber of Commerce of the Philippines, said the government has arrived at a critical point.

 

"It has developed an ambitious group of projects," he told GMA News Online.

 

He said the Aquino administration has to prove it can bid and award the projects successfully.

 

For government officials, the flagship program has supported state agencies to address backlogs in projects such as infrastructures.

 

Education Secretary Armin Luistro said the PPP program aside from helping the country to catchup with classrooms backlog, has helped the Education department to focus on its core business as well—the development of curriculum.

 

"In general, we're very happy with the specs and implementation of the two PPP projects," he told GMA News Online.

'Govt is not the best operator'

 

For the Transportation department, spokesman Michael Arthur Sagcal said the PPP program allows government agencies to run facilities with a "customer-service mindset."

 

"Government is not the best of operators, so we are tapping private sector expertise to run transport facilities with a customer-service mindset," he told GMA News Online.

 

"PPP projects will help deliver more convenient, reliable, efficient, and safe services to the public, which is what the DOTC wants to do," he said, noting the the Transportation department needs to catch up with around 15 to 20 years worth of backlogs in transportation development.

 

Metropolitan Waterworks and Sewerage System administrator Gerardo Esquivel said the PPP team has been of great help to the agency.

 

"Water Infra to my mind is one of the most important PPP projects of this administration," he told GMA News Online.

 

The PPP Center chief highlighted the importance of transparency for the government's centerpiece program.

 

"The high turn-out of private groups, local and foreign, participating in the bidding of projects is also an indication of investors’ confidence in the transparent process and the level playing field," Canilao said.

Transparency is a prerequisite

 

Transparency is one of the things  that attracted one of the companies which participated in a number of auctions and was able to bag four projects.

 

Michael Cosiquien, chairman and CEO of Megawide Construction Corp., said two things—"transparency and equitable playing field"—have attracted the company to participate in the PPP.

 

He said the governments needs to improve in terms of implementation—post tender and award. 

 

Ayala Corp head of energy and infrastructure group John Eric Francia said the government should "beef up" its resources on the post bid implementation side such as right of way acquisition, among others. Ayala Corp. has won three PPP projects. 

 

Asked if the company will still participate in future auctions, despite the CALAX case, Francia said Ayala Corp. will "selectively pursue the infrastructure projects." — TJD, GMA News