DBM gives final blessing to two PPPs under DOTC

The government has funneled funds into the Department of Transportation and Communications (DOTC) as financial backing for its two major infrastructure projects under the flagship public-private partnership (PPP) program, effectively giving the final green-light for the undertakings.

In a statement Wednesday, the Department of Budget and Management (DBM) said it gave in December a Multi-Year Obligational Authority (MYOA) to the DOTC for projects automating and integrating Metro Manila's railway ticketing system and upgrading the Mactan-Cebu International Airport (MCIA).

“Put simply, a MYOA will allow a department or agency to obligate funds for a project for more than a year, but only if the total cost of that particular project isn't fully covered by the General Appropriations Act in the first year of the project's implementation,” Budget Secretary Florencio Abad said.  

A MYOA is a document issued by the DBM either for locally funded projects or foreign assisted projects implemented by government agencies authorizing the entry into multi-year contracts for the full project cost.

It contains an annual breakdown of the full project cost, and obligates agencies to include in their budget proposal the amount programmed for the said years.

Last month, the Automated Fare Collection System was awarded to AF Consortium, led by Ayala Corporation and Manuel V. Pangilinan's Metro Pacific Investments Corporation.  

The project – involving a railway ticketing modernization contract – has total investment cost of P3.16 billion covering the 2013 to 2025 period, the DBM said. Some P671 million was invested in it for 2013 and another P1.05 billion set for the AFCS this year.
 
The project's funding requirement for 2013 and 2014 is financed by the private sector, supporting development, financing, and civil works as well as initial costs for the smart cards and tokens, according to the DBM.
 
Meanwhile, the MCIA New Passenger Terminal Project will facilitate the construction of a terminal building and the renovation and expansion of the existing one in the airport.
 
The total investment cost for the MCIA upgrade project—spanning the years 2013 to 2016 and 2021-2023—will amount to P17.5 billion, the DBM said.  

Last year, the investment cost totaled P2.07 billion, which was wholly funded by the Philippine government.
 
This year, the administration will support the project with P123.6 million. A similar amount has been recommended in the MYOA for the current year, with the additional requirement of P100 million recommended for consideration in 2015.

The MCIA is awaiting final awarding within the quarter. — Siegfrid O. Alegado/KBK, GMA News