Pushing PPP at LGU level

T“Build, Build, Build” program of the Duterte administration has the potential of accelerating Philippine GDP growth from its present level of 6 to 7% to the higher range of 8 to 10%, growth rates attained by China and India when they were at similar stages of development in which we are right now and are being attained by even poorer countries like Vietnam, Myanmar and Laos today. We have to make sure, however, that we go beyond sloganeering and are actually implementing infrastructure projects both of the public sector and of the private sector through the Public Private Partnership mode which fortunately is once again being given due importance after a shortterm distraction with the so-called “hybrid model” that was problematic from the very beginning. The government is the worst implementor of infrastructure projects and Official Development Assistance (ODA) funding is a sure formula for more delays. I am so glad that there is now a flowering of unsolicited proposals from the private sector for various PPP projects such as airports, railways, toll ways, sea ports, waste to energy facilities, etc.

The “Build, Build, Build” program can take even greater traction if many more LGUs are involved in accepting unsolicited proposals for vital infrastructures in their respective provinces and municipalities. Under the Local Government Code of 1991, LGUs can pass an ordinance which will permit them to accept unsolicited proposals and engage in PPP projects with private-sector partners without having to obtain any approval from national agencies like the NEDA. It is for this reason that the Center for Research and Communication, a think tank of the University of Asia and the Pacific, has been very active in assisting various progressive LGU heads in implementing PPP projects at their respective levels. CRC provides these LGUs with the following services:

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Strategic economic development planning to arrive at road maps for their respective localities; advisory in the crafting of PublicPrivate Partnership (PPP) Code; identification of and advisory for development projects in various modalities – PPP, loans, grants or selffinancing; conduct of pre-investment studies for each type of modality and investment promotion of LGU PPP projects through road shows locally or abroad.

Playing the role of an honest broker, CRC also can render services to banks and financial organizations looking for infrastructure projects to fund by identifying LGUs with political stability, harmony among officials and good governance; gathering data on LGU’s Internal Revenue Allotment (IRA) capacity and financial stability; and identifying LGU PPP projects that would be financial viable for banks and other finance organizations to fund. To complete the loop, CRC also provides services for private sector proponents in identifying LGUs with political stability, harmony among officials and good governance; and in conducting prefeasibility or full feasibility studies that can include one of all of the following: market and technical studies, environmental impact analysis or financial, economic, social and organizational analysis.

As a starter, CRC has identified two provinces and a private provincial development foundation as the first potential clients. They are Bataan, Batangas and the Iloilo Economic Development Foundation. The LGUs concerned have a reputation for visionary, competent and honest local officials. For Bataan, the following possible PPP projects have been identified: Provincial/municipal bulk water supply; Freeport Area of Bataan (FAB) International Seaport; FAB Port and Financial Center and Manila Bay Bridge (Mariveles to Ternate, Cavite). The Bulk Water Supply could start either in specific municipalities or could be provincewide from the start. The province has a total population of 813,810 with three municipalities exceeding 100,000 in population, i.e. Mariveles (140,243); Dinalupihan(118,335) and Balanga City (194,230). Major water sources are the Talisay and Almaden Rivers; Subic, Mt. Natib and Mariveles water sheds.

The second major project that can adopt the PPP mode for the province of Bataan is the Freeport Area of Bataan or International Sea Port. This would involve reclaiming from the sea 180 hectares of land and would target ship accommodations of Panamax container ships (4,500 TEUs) and neo-panamax container ships (12,500 TEUs). The required facilities would be 20 container berths; 6.1 km berth length at 16 meters depth; 30 to 40 meters max depth on chart data; 100 hectares container storage yards; 52,100 square meters of warehousing capacity and 5 million TEUs projected annual capacity. This Freeport Area can be the hub for Philippine and Asian international cargo and can significantly decongest Metro Manila’s vehicular traffic.

Complementary to the seaport is the development of a 23-hectare Central Business District (CBD), container port and cruise ship terminal. This can accommodate 100 locator firms, employing some 40,000 workers. The CBD will be built on a 12-hectare property, divided into 4.5 hectares of commercial lot for sale or lease, 1.33 hectares for a public market; 1.4 hectares for a container port terminal and 2.57 hectares for a maritime HQ and training center.

A major project that can appeal to our Northeast Asian neighbors like Taiwan, South Korea and China that have built bridges of record lengths connecting one island to another is the envisioned Manila Bay Bridge, 24.4 kilometers connecting Mariveles, Bataan; Corrigidor Island West; and Ternate, Cavite. Such a bridge will conveniently connect the Central Luzon megapolis to Calabarzon bypassing Metro Manila traffic. The bridge will have capacity for fiber optics, oil or water lines. There can be passenger or cargo railway that will go a long way in decongesting Metro Manila traffic.