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Government renews courtship to private sector investors for BBB projects

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Government renews courtship to private sector investors for BBB projects
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The national government remains open to accepting unsolicited proposals from private-sector entities, provided they could begin project implementation in less than two years.

In the 55th Annual Meeting and Conference of the Philippine Economic Society (PES), the Department of Budget and Management (DBM) and the National Economic and Development Authority (Neda) assured that the private sector have a place in the government’s huge infrastructure initiatives.

Budget Secretary Benjamin E. Diokno said the Duterte administration does not want to continue the practice of accepting “premium payments” from the private sector for Public-Private Partnership (PPP) Program. He said this was “taxation without representation.”

“Let me disabuse your mind that we have abandoned PPPs. We have, in fact, provided more options. We are entertaining unsolicited proposals that were not entertained before,” Diokno said.

“We are challenging the private sector. If you can start a PPP project within 18 months, then it’s yours,” he added.

Socioeconomic Planning Secretary Ernesto M. Pernia said the 18-month window to begin projects was based on the experience in building the Clark International Airport.

Pernia reiterated that the government intends to finance the P7-trillion to P8-trillion worth medium-term infrastructure program through official development assistance (ODA) funding, the national budget, and PPPs, particularly unsolicited proposals.

He said the reservation of the Duterte administration to PPPs stemmed from the delays experienced by projects. Diokno added this includes the 4-kilometer Daang Hari-Southern Luzon

Expressway Link Road that, according to him, took five years to complete.

Pernia said the government is “experimenting” on having its flagship projects initially financed through ODA and the General Appropriations Act (GAA) or national budget, and having the private sector take over the operations and maintenance of the projects.

“We are open to a mix of funding sources, private, ODA or government. There is really no rule of how much PPP, ODA, or GAA [can be used for infrastructure projects],” Pernia added.

As of June 2017, the Neda estimates that 53 of its 75 flagship projects could be worth P1.58 trillion. The other 22 projects still do not have cost estimates.

This is the reason the government put together a list of 70 projects in the “Build, Build, Build” (BBB) program. According to the government’s web site, the BBBs consist of a mixed bag of projects ranging from roads, bridges, railways, bus-rapid transits (BRT), to the Philippines’s first subway, among others.

Based on the government’s launch of the BBBs in November 2016, the list included unfinished projects that were started by previous administrations.

Around 20 projects included in the BBBs are also included in the flagship projects. These include the Mindanao Rail Project Phase 1 or the P35.26-billion Tagum Davao Digos Segment; the P2.8-billion Metro and Light Railways  Common Station Project; and the two BRT projects in Metro Manila; the P37.76-billion Line 2 or the Edsa/Central line; and P4.79-billion Line 1 or the Quezon Avenue line.

Written By
Cai Ordinario
Category
PES in the News