Construction sector looks forward to PPP

MANILA, Philippines - The construction industry expects the implementation of the public-private partnership (PPP) infrastructure projects to boost the industry which could result in a double digit growth rate for the sector next year.

At the same time, the sector is asking the government to limit the awarding of unsolicited government projects because it is “not open, not transparent and open to graft and corruption.”

 At the sidelines of yesterday’s press conference, Philippine Constructors Association Inc. (PCA) president Levy V. Espiritu said the P500- billion construction industry is optimistic of experiencing a double digit growth for next year. This year, growth will be at eight percent.

Espiritu said that the PPP projects will likewise result in a boom in private construction. Currently, private construction accounts for 60 percent of total construction activity in the country. The PPP is expected to reverse the trend which with 60 percent public and 40 percent private.

At the same conference, Espiritu said that there must be some amendments in the joint venture agreements (JVA), right of way acquisition and unsolicited proposals. “Unsolicited proposals should not be made the rule. It should be the exemption,” Espiritu noted.

According to Espiritu, the Swiss challenge is not enough to guarantee that the unsolicited proposal is competitive because under the rules, the challenging firm is not given enough time to contest the bid.

Espiritu explained that firms are only given seven to 60 days to make a counter proposal. He said that the period should be extended by at least six months. He said this is only fair since most of the feasibility studies take almost a year to make.

Earlier, the National Economic and Development Authority (NEDA) said that it is studying the possibility of abolishing the joint-venture (JV) guidelines created by the previous administration so that there will be more transparency in public-private partnership projects.

Kenneth Tanate, the director of the NEDA Infrastructure Staff, said the agency is in the process of amending the joint venture guidelines as well as the possibility of abolishing them.

Under the joint venture guidelines, only the head of the government entity concerned is given the authority to approve a proposed joint-venture agreement, regardless of the project’s amount, while clearance from the departments of Finance and Budget and Management will be required only when the JV agreement requires national government undertakings, subsidies or guarantees.