Gov’t cautious in tapping private funds for big-ticket infrastructure projects

Finance Secretary Carlos Dominguez said yesterday the Duterte administration would be careful on tapping the private sector to finance the government’s big ticket infrastructure projects.

“Those that were (already) built eventually cost higher for the consumers because of the high front-end costs charged the bidder,” he said in a speech during the Philippines Investment Summit.

“I am not sure this is the best way to go about this business of recruiting the private sector support to meet our shortfall in infrastructure,” he added.

While Dominguez continues to welcome public-private partnerships (PPP), he lament- ed that recent PPPs have not been successful in providing quality service and reducing government costs.

The finance chief’s presentation during the forum showed a photo of the Ninoy Aquino International Airport (NAIA) Terminal 3 while he was delivering his speech.

Dominguez suggested using PPP only when the project requires long- term funding and longer years to complete.

“Small, short-term projects often turn out to be more expensive for government eventually because of related costs such as the hiring of consultants and multiple Cabinetlevel approvals,” he said.

Under the previous administration, 12 PPP projects worth P197 billion were awarded, including the Daang-hari-South Luzon Expressway Link.

Budget Secretary Benjamin Diokno earlier criticized bidding out two PPP projects covering the construction of school buildings cumulatively worth P13.75 billion.

Consequently, he has said the Department of Education would spend P118 billion for school buildings alone last year, up 44 percent year-onyear.

He added PPPs could be best pursued using a “hybrid” of the government constructing the infrastructure, and the private sector managing it.

Dominguez, for his part, said too much reliance to PPPs may cost the government’s contingent liabilities to balloon.

As of May, contingent liabilities or guaranteed debts covering both state corporations and private contractors totaled P448.20 billion, up 12.3 percent from P399.28 billion a year ago.

“We are looking to launching hundreds of infrastructure projects over the next few years,” Dominguez said.

“This can be done only if we re-imagine the terms of these partnerships. We cannot continue to bleed the public dry under the guise of providing for their needs,” he added.