PPP

The Public-Private Partnership (PPP) program is supposed to be the centerpiece program of this administration. By expanding the old build-operate-transfer method to include joint ventures, the PPP aims to close our yawning infrastructure gap and drive the economy towards faster growth.

Today, however, one hears about the PPP mostly from the mouth of hecklers.

First, they said PPP stood for Power Point Presentation. All the plans, it seems, never went beyond the initial presentation.

Now, PPP is said to stand for Post-PNoy Projects. This is because the vital infrastructure projects, if they are undertaken at all, will happen beyond the life of the current dispensation.

Take the case of the LRT Cavite extension. It turns out, the project is marred with right-of-way issues. The alignment runs through a former dumpsite, which engineering standards do not allow. No space was acquired by the provincial government under Ayong Maliksi (who did most of the real estate purchases for the project) for the 8 stations of the line extension.

For all these reasons, no sane corporation is keen to bid for the project. The last bidding attempt failed —  because all the potential investors wanted the right-of-way costs discounted.

While campaigning for his candidates in the last elections, President Aquino whipped up the expectations of the people of Cavite. He said he would throw himself before an incoming train if the project is not done during his term.

Well, the project will not be done during his term. Fortunately for Aquino, we are quickly running out of trains to use the existing tracks. Should he jump onto the rails, he will likely survive.

At the MRT line, over a third of the existing rolling stock is out of commission. This is the reason why the trains come far in between and passengers pile up in the stations, especially during this Christmas rush.

Some money, it appears, was set aside using the DAP mechanism to procure new rolling stock. The purchase was tainted by rumors of a shakedown pulled by influential personalities on the original Czech train suppliers. A Chinese firm was contracted to supply new rolling stock. We are not sure when the deliveries will finally come.

Meanwhile, with so many trains in disrepair, the tracks are underutilized. Metro Manila commuters might have been better off if the rail service was sold lock, stock and barrel to a private investor. Fares might be higher than they are presently, but at least there will be enough trains running.

Last week, the project for a common ticketing system for the three existing commuter train lines was finally awarded to a consortium that includes Ayala and Metro Pacific. We will finally have a modern ticketing system — which might mean little if there are no trains plying the routes.

Bangkok, by comparison, in a comparatively shorter time, now enjoys the convenience of an integrated skyway, subway, bus, light rail and river ferry urban transport, all participating in a common ticketing system.

Our own modernization effort was held back for years by powerful syndicates in the bureaucracy. It is estimated that over P600,000 in fares are lost each day due to the inefficient system in place. That is enough reason to impede modernization.

We are not sure if the other LRT lines on the drawing boards will be built within our lifetime. After over three years with this do-nothing administration, the interconnecting station between the LRT and the MRT at North Edsa remains unbuilt.

Meanwhile, tens of thousands of man-hours are lost each day to heavy traffic in the major thoroughfares. The whole metropolis is choked. If we could not move in this overcrowded metropolis, how can the economy prosper?

More mighty

Last week, I yielded some space in this column for the denials made by the spokesman for Mighty Corp. on accusations it was undervaluing imports, misclassifying them and understating sales to avoid proper taxation. Mighty attracted much attention because it was gaining market share by selling its premium cigarettes for only P1 per stick.

If the proper sin taxes and VAT are paid, the corporation wholesales its cigarettes for only P1.22 per flip-top pack. That covers everything: tobacco, acetate tow filters, cigarette paper, packaging and distribution.

The spokesman for Mighty likewise flatly denied cases were filed against the company in three US states. This turns out to be a lie. A simple Google search shows a “Notice of Entry of Judgment” issued a few years ago by the Superior Court of California. The court ordered Mighty to pay $21 million in penalties and fees as well as banned the sale of the company’s products in the US.

A globally reputable market research firm, estimating Mighty’s sales, claims the company ought to have paid P12.44 billion in excise “sin” taxes in just the first nine months of this year. The cigarette maker, however, paid only P5.3 billion for the period — short-changing government about P7.14 billion in taxes.

Mighty claims the study of its actual sales based on its market share done by this research firm is faulty — but accepts the market share estimates for its estimates. Mighty does not explain why only estimates of its market share is “faulty” while the numbers on all the others are correct.

The P7.14 billion in excise taxes could be just the tip of the iceberg. The amount does not yet include customs duties due on its imports if these were properly declared.

Mighty must understand there are many ways for computing sales based on market share.