Immediate action needed to prevent infra crisis – PPP Center

The Philippines is on the verge of an infrastructure crisis, which needs immediate government action and more investments to prevent it from happening, the PublicPrivate Partnership (PPP) Center said.

PPP Center executive director Andre Palacios said the country’s current infrastructure deficiencies could easily turn into a crisis if delays continue on critical developments.

“There is an urgent need for infrastructure. We feel the need everyday as we go to EDSA and take the MRT. People describe it as an infrastructure gap and it’s pretty much close to infrastructure crisis. We have done a lot but there is still much more to be done. And if we don’t do more and don’t do these things quickly, the infrastructure gap may quickly slide into an infrastructure crisis,” Palacios said in an interview.

The PPP Center official described an infrastructure gap as having infrastructure which are not sufficient to meet the demands for public services but “there remains an opportunity for the government to fill such gap.”

“Crisis will require a more drastic action on the part of government. We’re not there yet and if we continue our present rate of progress, we will be able to avoid it,” Palacios said.

At its current state, the Philippines has the poorest quality of public infrastructure among the ASEAN-5 member states.

To accelerate the country’s infrastructure development, Palacios said the next administration should spend at least five percent of the country’s gross domestic product ( GDP) in infrastructure and continue with the implementation of the PPP projects.

“Generally, government spending should be about five percent of GDP. That would be complemented by private sector spending for utilities as well as private sector spending for PPP projects,” he said.

“Given government’s limited resources, PPP looks at the private sector as a partner. The one that will provide capital as well as innovation to build the infrastructure and eventually deliver the public service,” Palacios added.

The PPP Center has so far awarded 12 projects worth P200.48 billion. Some 15 projects worth P579 billion are under procurement while 13 more are under development.

The PPP Center, initially targeted to complete the procurement of 11 projects before President Aquino steps down from office.

The number, however, has dwindled to eight following problems encountered by some projects with other government agencies.

“We keep pushing on our part but some of our partner agencies are reluctant to continue with the projects and they decided to postpone the bidding – like the prison – and postpone it to the next administration,” Palacios said.

“Last week, we were hoped ing that nine projects will still be awarded before the current administration ends. The nine includes the prisons project with Department of Justice (DOJ). But Friday, DOJ decided the bid submission for the project will be in August so we are left with eight DOTC projects, including the five regional airports,” he added.

Palacios said the bundled regional airports are most likely to be auctioned and award-regional among the PPP projects within the remaining months of the current administration.

“Of the eight, the five regional airports are the most ripe because the five prequalified bidders are very much committed and ready to bid,” he said.

The PPP regional airports project involves the operations, maintenance and development of New Bohol ( Panglao) Airport, Laguindingan Airport, Davao Airport, Bacolod Airport and Iloilo Airport.

“We hope we can still complete the procurement at least for those five regional airports if we want to prevent NAIA-type congestion in the airports,” Palacios said.

Other PPP projects seen to be procured at the tailend of the Aquino administration are the Davao Sasa Port Modernization Project, Road Transport Information Technology Infrastructure Project (Phase II) and Operation and Maintenance of LRT Line 2 Project.