DPWH says gov’t saved P29B from competitive bidding

MANILA, Philippines - The Department of Public Works and Highways (DPWH) reported yesterday  that the agency has saved P29 billion as a result of transparent and competitive biddings of infrastructure projects since the start of the term of President Aquino.

DPWH Secretary Rogelio Singson told participants of the Philippine Investment Conference organized by CFA Society Philippines that reforms and strict adherence to competitive bidding has enabled DPWH to save billions for the national coffers.

Singson explained that the savings were derived from the difference between the approved budget for the contract (ABC) and the cost of the awarded projects.

 “By this time since June 2010, we have saved the government just in the difference between the approved budget for contract to the awarded project over P29 billion. That is a significant amount no matter how you look at it and that savings from biddings,” he said.

According to Singson, the savings would be used for additional scope of work or projects, which include roads, bridges, flood control, and disaster-related rehabilitation projects.

“These will go to roads, bridges, rails, airports, seaports, the basic infrastructure that is needed to sustain the economic growth in the country,” he added.

The DPWH chief said the government intends to raise infrastructure spending to P795 billion or five percent of gross domestic product (GDP) by 2016 from P125 billion or 1.9 percent of GDP in 2011.

In the case of DPWH, he disclosed that infrastructure spending would triple to P270 billion next year from P90 billion in 2011.

For Mindanao alone, Singson said the government is spending P63 billion for major infrastructure projects while another P56 billion is being spent to upgrade infrastructure in tourism havens as part of efforts to lure 10 million foreign tourists into the Philippines by 2016.

In recent years under the Aquino administration, Singson said the agency has simplified bidding process and eliminated the submission of Letter of Intent to achieve the right cost encouraging participation of more bidders and eliminating possible collusion among bidders.

Likewise, he added that the agency also removed the use of credit line certification from banks as basis for computing a contractors Net Financial Contracting Capacity.

“Some contractors are keeping their financial contracting capacity but now we are requiring the contractors to upgrade their equipment so they can increase their financial contracting capacity,” he said.

The move, he explained, would help contractors compete with the upcoming economic integration of the Association of Southeast Asian Nations (ASEAN) next year.

“In 2015, under the ASEAN economic integration, we are talking about of 800 million population or market,” he said.