PPP to continue to take back seat to state funding — DoF

NOTWITHSTANDING calls by Philippine and foreign business groups for the government to put public-private partnership (PPP) arrangements back at the forefront of its infrastructure drive, state financing will continue to be a preferred mode, the head of the Department of Finance (DoF) told reporters on Thursday last week.

Finance Secretary Carlos G. Dominguez III said he met with heads of some conglomerates last month to discuss this concern.

“I just laid it down to them,” he said, noting some PPP projects have been delayed “because you guys were arguing… who was going to make the profit.”

“And in the meantime when you were arguing about that, there is no growth and I think that is unfair to the Filipino people.”

Among those taken off the PPP pipeline were plans to develop the New Bohol (Panglao), Davao, Iloilo, Laguindingan and Bacolod airports, which would have been the second airport offer under this scheme after the P17.52-billion Mactan-Cebu International Airport Passenger Terminal Building project that was awarded in April 2014.

Mr. Dominguez said the government’s “hybrid” mode — involving state funding or foreign aid for the construction stage and private sector participation in operation and maintenance — has proven faster, citing progress of the Clark International Airport Expansion Project, the first project under such financing scheme. Groundbreaking is expected in December after the project was approved in July by the National Economic and Development Authority board. Operation of the new facility is expected to start in the first quarter of 2020.

“We have no time. We are very far behind in infra(structure) and we have to move faster. We have proven we can start a project in 18 months so that is the benchmark the private sector has to meet,” Mr. Dominguez said.

“Our experience with PPP — and I am not inventing this — it’s very slow. How many PPP projects were actually started by the last admin — half a dozen. They had six years to do it,” he added.

“Half a dozen in six years and the average took 30 months and one of them took 50 months. Fifty months from conception to the start — I am not talking about completion.” 

source: Businessworld