Europe-PH News
Infra crisis imminent sans PPP Act - Palacios
April 26, 2016
Lorenz S. Marasigan
Europe-PH News
The country is now experiencing what Andre C. Palacios, the executive director of the PublicPrivate Partnership (PPP) Center, tagged as an infrastructure gap.
But if the government fails to act immediately to mitigate the imbalance between infrastructure demand and supply -- beginning with the passage of the proposed PPP Act -- the Philippines could plunge into a catastrophe, termed as "infra crisis," something that will require extraordinary measures to be addressed.
"What we have now is an infrastructure gap, wherein the needs of the public for public services, delivered by public infrastructure, [are] not being met by our current public infrastructure," he told the BUSINESSMIRROR. "We don’t have an infrastructure crisis, yet. But, if we do not act now, the gap may turn into an infrastructure crisis."
He explained that,difference between a gap and a crisis in infrastructure is purely qualitative. "A gap is something that can be solved following normal government efforts.
What we are doing now is a lot, but we need to do it quickly and more. Examples of these are procurement, disbursement, proper delivery of right of way, and the likes," he said.
But a crisis, he said, is something that will require the action of all branches of the government.
"It needs extraordinary government measures. For example, in the 1990s, we had a water crisis, and the government had to pass a water-crisis law. A crisis is when you still have current public infrastructure and is unable to deliver the required public infrastructure, but the need is acute," Palacios said.
"Addressing a crisis needs a policy response from the Legislative, the Executive and the Judicial branches of government," he said. "We could still prevent that with the passage of the PPP Act."
But sadly, the PPP Act is as good as dead. In an interview with the BusinessMirror in mid-April, Speaker Feliciano Belmonte Jr. admitted that the chance for Congress to pass the said bill is "slim to none" due to the lack of time.
He noted, however, that a flicker of hope still remains. This is if the Senate has a similar bill at the similar stage.
Regrettably, the Senate version of the proposed PPP Act is still pending for second reading, while the House version of the bill is pending for third reading.
Belmonte said there maybe no more time for both chambers of Congress to pass the measure on third reading.
Based on the legislative calendar, Congress sessions adjourned on February 3 as part of its preparation for the May national and local elections. Sessions will resume on May 23 until June 10.
The two chambers will convene first as National Board of Canvassers before the approval of other pending priority bills.
’Still hoping’
"We’re still hoping, and we will keep on pushing for the passage of the bill," Palacios said. "We believe that after the elections, our lawmakers will see that this infrastructure bill is needed and will help solve our infrastructure gap."
When approved, the PPP Act will institutionalize the Project Development and Monitoring Facility, the PPP Governing Board and the contingent liability fund. The proposed amendments include the separation of regulatory and commercial functions of government owned and -controlled corporations, and create a list of projects called "projects of national significance."
By virtue of being included on the list of projects of national significance, projects will be "insulated" from local laws, among others, by local government units.
The proposed amendments also include allowing time-bound temporary restraining order and the extension of the period for Swiss Challenge to six months, from the current two-month period.
Also, the piece of legislation will give the executive director of the PPP Center a fixed tenure, and will, likewise, make the said body a voting member of the Investment Coordination Committee and the Cabinet Committee of the National Economic and Development Authority.
Moral obligation
That is why former PPP Center Executive Director Cosette V. Canilao was aggressively pushing for the passage of the bill during her term.
"It’s sad news. But, if the next administration is really serious in fasttracking the infrastructure development in the country, then a very good venue to do that is to pass the PPP law," she told the BusinessMirror. "The proposed law will hasten the procurements process from planning to bidding, and down to implementation."
She hopes the next president would have the moral audacity to influence Congress to pass the crucial piece of legislation.
"Whoever the president would be, I hope he or she could morally persuade the existing Congress to pass the law within the three-week period that is available in May, after the elections. So that when his admin starts by July 1, infrastructure development will be faster," Canilao said.
Business groups are also hopeful for the passage of the PPP Act, as this could improve investor confidence in a sector that is still budding at this point in time.
"Infrastructure development is needed to move economic growth to a higher level. From that perspective, it is unfortunate that the PPP Act will not make it in the 16th Congress," European Chamber of Commerce of the Philippines External Vice President Henry J. Schumacher told the BusinessMirror.
For his part, Makati Business Club (MBC) Executive Director Peter Angelo B. Perfecto said his group is saddened by the news, as there is still time left to consolidate a version of the bill in both houses of Congress.
"It’s unfortunate that the PPP Act may not get passed, despite the small window we still have left until the transition. The PPP Act consolidates and institutionalizes the reforms that the Aquino administration has put in place in infrastructure procurement, which has been recognized internationally as a solid framework," he said.
’Immediately certify the bill as urgent’
Nevertheless both business chambers will continue to support the administration in its push to improve the sorry state of infrastructure in the Philippines.
"The business community continues to support these reforms and will continue to be active participants in the PPP Program. Consistent with the views of MBC members on our Executive Outlook Survey, we believe that the economy will continue to grow, but the challenge remains on how best to make this growth exponential and inclusive, recognizing that infra development is a critical element in this effort," Perfecto said.
Schumacher noted that foreign chambers wish that the next set of lawmakers will see the importance of the infrastructure program, and will pass the bill, as it is necessary. "The foreign business community continues to support this legislation and trusts that the 17th Congress will have this as a priority on its agenda," he said.
Perfecto added: "Whoever will be the president come June 30 must immediately certify the bill as urgent in order to sustain our present momentum in closing our infra gap, both in terms of physical facilities and policy. The foundations have already been set, and the task now is to cement them and build upon it."
Since 2010, various implementing agencies have awarded 12 PPP contracts to the private partners, more than the combined six solicited projects awarded during the past three administrations.
The government is currently tendering off 13 key infrastructure projects, which include five regional airports, a prison facility, a port modernization and water project, two information-technologyprojects and three rail projects.
Some of these deals have been slipping, fighting an uphill battle with delays and the lack of time. "We’ve already learned from the previous crises," Palacios said. "And without us mitigating this gap in infrastructure, we may be sliding closer to having a crisis."
Source: BusinessMirror
