Like ADB, adviser sees need for PPP to hit infra targets

IF THE Duterte administration wants to see all the planned infrastructure projects built during its six-year term, it should use the Public–Private Partnership (PPP) mechanism to speed up construction and better manage these projects, an adviser said.

“We need to bring back PPP,” said Presidential Adviser for Entrepreneurship Joey Concepcion during this talk in the Visayas Area Business Conference in Waterfront Cebu City Hotel and Casino last Friday.

Concepcion said he will meet with some of the Cabinet officials to push for support for one of the important pillars or 3Ms of micro, small and medium enterprises (MSME) development: the market. The other two are money and mentorship.

“We have to build the airports, the bridges, the roads, all of that. We have to be open to bringing back PPP. We need the entrepreneurs to help government. Government is there for six years, and after that, they change everybody so how can you have continuity?” said Concepcion.

He cited, as an example, the huge tourism potential of the expansion of the Mactan-Cebu International Airport (MCIA), which is being implemented as a PPP venture. In 2014, the GMR-Megawide Cebu Airport Corporation took over management of the existing terminal and started work on the new terminal, which is slated to open in mid-2018.

Tweak terms

“The vision of Megawide president Edgar Saavedra is to beat Manila. He wants everybody to land in Cebu and take a flight to Manila, which means tourism here will explode…It is not about how the airport is nicely built it; it is about the vision of what that province should be,” he said.

Concepcion, who also heads Go Negosyo Foundation, will appeal to the Cabinet secretaries to bring back PPP. He said he will suggest to them to change terms (of the current PPP scheme) if these conflict with the country’s laws or their priorities.

“Without the private sector, you will not have the continuity and vision,” he said. “The private sector is really the best in managing things under proper rules and the government regulates and makes sure that the public is always taken care of in terms of rates and efficiency, among others.”

Concepcion said that if the PPP will not be strengthened next year, he thinks it’s likely that President Rodrigo Duterte will not see anything built during his term, which will end in 2022.

Now’s the time

“This has to be initiated soon,” he said, adding that solving the country’s airport congestion problems would be one of the main issues he would bring up during the meeting. He said he will also raise the need for more farm-to-market roads and improve connectivity to boost MSME development.

Under the “Build, Build, Build” initiative, the Duterte administration intends to spend at least P8 trillion on infrastructure. This aims to increase the share of infrastructure spending in the gross domestic product (GDP) from 5.3 percent this year to 7.4 percent in 2022.

However, due to the size and extent of the planned infrastructure program, the Asian Development Bank (ADB) has suggested that the government employ the PPP scheme.

“The size of the infrastructure need requires the expansion of both budget spending and public-private partnerships (PPPs),” said the ADB paper titled: “Scaling Up Infrastructure Investment In The Philippines: Role of Public-Private Partnership and Issues.”

The Duterte administration prefers to build infrastructure through the use of official development assistance funds and loans from multilateral development banks and later on bid out the operations and maintenance.

“Given persistent bottlenecks in various sectors, PPPs will remain an attractive option for meeting infrastructure requirements,” the ADB said. (KOC)

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