Gov’t won’t revert to infra PPP scheme » Manila Bulletin Business

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Dominguez says hybrid system is it

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By Chino S. Leyco

The Department of Finance (DOF) won’t bow to pressure from the private sector to revive the public-private partnership (PPP) scheme that was implemented by the Aquino administration.

Carlos G. Dominguez III

Finance Secretary Carlos G. Dominguez III reiterated that the government’s big-ticket infrastructure projects under its “Build, Build, Build” program will be faster to implement if they are under the “hybrid” PPP scheme.

Dominguez disclosed he already met twice with the private sector to discuss their concerns regarding the Duterte administration’s PPP approach.

During their meeting, the finance chief shared the government’s bad experience with the old PPP program, citing it took six years for the Aquino administration to implement only six infrastructure projects.

“Basically we said you know our experience with PPP and I am not inventing this, it’s very slow. How many PPP projects were actually started by the last administration, half a dozen, and they had six years to do it,” Dominguez told reporters.

The DOF chief said the government has no time to waste under the current administration as the Philippines continued to lag behind its peers in infrastructure development.

“We’ve proven we can start a project in 18 months, so that is the benchmark the private sector has to meet,” Dominguez said. “We have to start it, the country needs the infrastructure.”

Under the hybrid PPP formula, the government selects, finances and builds big-ticket projects through competitive public bidding and, upon completion, auctions off their operation and maintenance (O&M) to the private sector.

The old PPP program of the Aquino administration was purely funded and managed by the private sector under the government’s build-operate-transfer (BOT) scheme.

Dominguez had recently met with some of the country’s top business conglomerates, which include the groups of Aboitiz, Ayala and Lucio Tan.

Asked about the businessmen’s reaction after the meeting, Dominguez said “frankly I told them why was it delayed because you guys were arguing between who was going to make the profit.”

In particular, Dominguez cited the Cavite-Laguna Expressway (Calax) project as one prime example of why the government decided to modify the traditional PPP formula and fast-track the process.

“We had one PPP project that from conception to the start of implementation, it took 50 months. And one of the reasons is the private sector had a squabble among themselves. Remember the Calax project?” Dominguez said at a recent investment forum.

“We are not willing to wait for the private sector to settle their differences. While private companies quarrel among themselves as to who will make the profit, the public suffers from lack of infrastructure,” he added.

Under the “Build, Build, Build” program, the government plans to either implement or begin the project preparations for 75 big-ticket projects to realize the Duterte administration’s envisioned “Golden Age of Infrastructure.”

But Dominguez clarified the hybrid PPP mode does not totally shut out private contractors from taking part in the implementation of infrastructure projects as unsolicited proposals are still welcome from the private sector.

He has also pointed out that the government undertaking the construction of PPP projects would prove cheaper in the long run as the country can borrow at lower rates through grants and concessional loans.

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