Poor infrastructure spooks investors

Numbeo.com, which claims to be the world’s largest database of user-contributed data about cities and countries worldwide on current information on living conditions across the globe ranging from cost of living, housing and health care to crime, pollution and traffic, has placed the Philippines on the world’s Top 10 list of countries (and the fourth in Asia) with the worst traffic situation.

The Philippines was at No. 9 with the worst traffic condition among 88 countries, having garnered 202.31 points (out of a perfect score of one) based on “average commuting time, commuting dissatisfaction, traffic inefficiencies and carbon dioxide emissions in commuting.”

Kenya was number one on the list, followed by Egypt, Bangladesh, Bolivia, Nigeria, Jordan, Iran, and South Africa. The 10th spot went to Thailand.

Local experts blame the absence of a comprehensive, long-term urban development masterplan for what a top Makati Business Club (MBC) executive has termed the “logistical nightmares” confronting a government unable to meet the ever-rising demands for infrastructure and other essentials of a fast-growing domestic economy.

Philippine Chamber of Commerce and Industry (PCCI) president Alfredo Yao, meanwhile, said that apart from adequate resources, time is crucial to addressing the logistical nightmares wracking the country.

Yao said: “We need to work double time. These problems are a result of poor planning from past administrations—a confluence of poor planning. We should have improved our rail systems by this time, our airports should have been modernized, and our ports should have been improved.”

Congestion at the Ninoy Aquino International Airport (NAIA) and Manila ports should prompt airlines and port operators to seek out secondary gateways in the north and south, he added.

One major hitch in Yao’s must-do list is that the needed public transport and road projects for such a major undertaking, including those endorsed by President Aquino no less under his pet program Public Private Partnership (PPP), have been moving at a snail’s pace.

A number of PPP projects are actually under the P4.76-trillion Roadmap for Transport Infrastructure Development for Metro Manila and its Surrounding Areas, or the Dream Plan, which had been drawn up by the Japan International Cooperation Agency (JICA).

However, not one of these PPP projects has been completed with less than a year-and-a-half to go in the Aquino presidency.

Of some 60 projects on the drawing board, the government has thus far awarded only nine PPP ventures and is bidding out 11 more projects.

Meanwhile, Filomeno Sta, Ana III, coordinator of the policy and advocacy group Action for Economic Reforms (AER), said in a recent news report that although President Aquino continues to enjoy a relatively higher net satisfaction rating compared to his predecessors, the President could suffer a dip towards the end of his term, resulting from infrastructure woes as exemplified by the “decrepit” public transport system, heavy traffic and port and airport congestion.

“The last few years of his administration, that is 2015 and 2016, will be tough, quite tough. The problems relating to infrastructure and logistics as exemplified by the decrepit public transportation, heavy traffic, congestion in ports and airports, looming power crisis, etc., are now exacting their toll on the economy. Each, in turn, will affect, probably adversely, the President’s satisfaction rating,” he emphasized.

It takes time to reverse the poor state of infrastructure and there seems to be no end in sight in the near future because of the national government’s failure to put in place road or transport projects that should have been completed or up and running already yesterday.

Consider the following examples of official procrastination.

Ayala Corp’s AC Infrastructure won in 2011 the contract for the four-kilometer Daang Hari-SLEX (South Luzon Expressway) Connector Project, which was the first PPP project bid out by the Aquino government. 

It is designed to connect the expressway to Cavite from Daang Hari near Verdana Homes in Imus town up to the Susana Heights Interchange at SLEX, and to serve as an access road to the province aside from the traffic-mired Alabang-Zapote Road.

 But this PPP venture was hobbled by delays owing to right-of-way issues and unexpected changes in project design.

 Next is the P18-billion NLEX-SLEX Connector Road an unsolicited proposal by Metro Pacific Tollways Development Corp. (MPTDC), which was originally set for completion before the President steps down in June 2016.

 However, it has yet to get off the ground, and its proponents predict that it could be completed by late 2017 or early 2018 at the soonest because the government has yet to make a final decision till now on whether this elevated NLEX-SLEX Connector Road would be carried out through the Swiss Challenge or a joint venture (JV) with the Philippine National Construction Corp. (PNCC), which holds the franchise to both NLEX and SLEX.

 MPTDC was amenable to the Swiss Challenge, in which interested bidders should top the bid of MPTDC to win the project, but the original proponent gets to do this venture in case it decides to match the highest offer.

 It was later on told to scrap the Swiss Challenge and do the project instead via its existing JV with PNCC through a Supplemental Toll Operations Agreement (STOA).

 But the STOA’s approval was then put on hold after the Department of Justice (DOJ) surprisingly issued an opinion last July that the connector road could not be carried out through a JV without public bidding, and endorsed a return to the Swiss Challenge.

 Then of course there’s the perennial headache that is MRT3.

MRT3 service has definitely worsened ever since the Department of Transportation and Communications got PH Trams and then APT Global to do the operations and maintenance work.

It will be recalled that DOTC handpicked PH Trams and, later, APT Global without first consulting its private partner MRT Corp. (MRTC), in violation of their original build-lease-transfer (BLT) accord.

 The DOTC then picked Dalian Locomotive of China to supply light rail vehicles (LRVs) to MRT3, again without consulting MRTC in violation of their BLT.

 In fact, MRTC had protested DOTC’s decision on passenger safety issues because Dalian Locomotive has had no experience manufacturing electricity-powered LRVs, as it only builds diesel-powered coaches like those used by the Philippine National Railway (PNR).

 President Aquino has promised to ramp up infrastructure spending over the last year-and-a-half of his term, with a higher outlay of a reported P562.3 billion in 2015 alone.

 Nice words indeed. But Malacañang has to match its infrastructure rhetoric with action. It needs to speed up the implementation of its PPP and other big-ticket projects if the present leadership wants to end its reign on a high note.

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