Fix now or pay later plan

My elderly neighbor Mr. Rene Silvestre recently called my attention to the fact that two major property developers are now planning on building condominiums in Barrio Kapitolyo. As a result there would be 2,000 to 4,000 new residents added into out very small community over night. Most people worry about the potential traffic congestion they will create but “kuya Rene has a more serious concern: Where will they get the water?

Most people will probably say: “Silly Man, of course “Nawasa” will supply it!

Far from being silly, Mr. Silvestre actually worries for the future and for the next generation. At the rate we are going, we have not seriously looked to the future much less planned for it. We have not expanded our capacities or created new reservoirs and to top it all, our natural environment for water retention is all but diminished. We are operating “On a rain and a prayer.”

Unfortunately water is not our only problem. We are importing and buying more cars but we have no new roads. Suggestions on cannibalizing or crushing old or dilapidated vehicles are not based on science or logic but merely to stimulate new vehicle sales or to appear as if those in government are doing something about it.

We have a number of developing and growing urban centers and populations but the necessary infrastructures are not coming up fast enough and can’t even catch up with growth. Economic planners are encouraging and stimulating the business sector to be bold and forward looking but their counterparts in the public sector or government are so behind in terms of adapting, modernizing or are shackled by laws that are obsessed with preventing corruption, focused on legal penalties but ignore the over-all result where nothing is done, no one moves and everybody is scared.

While Filipinos debate on who should be their next president or gawk at Yaya Dub and Miss Universe Pia, it is interesting to note that a number of foreign entities and business groups have quietly been organizing and hosting events and seminars that are meant to bring attention to the immediate challenges that will confront the next president and his or her administration.

A global design and consultancy company named Arup recently hosted two events that focused on “Rail” transport as in mass transport and a second seminar on water engineering and management. Last week, the British Embassy hosted the UK Financial and Professional Services Seminar led by their ever active and aggressive Ambassador Asif Ahmad and their Director for Trade and Investment Mike Moon who made every effort not to sound or look like a “stereotypical diplomat.”

What caught my attention is the fact that many of the resource speakers circled around the word “Infrastructure” and the series of presentations seemed to pick-up on the right way or the wrong way of planning, presenting and implementing infrastructure projects. It was part déjà vu and part ominous warning that the next administration will have to pick up the pieces or missed opportunities to launch Public-Private Partnership projects or PPP.

Given the vast experience of the “Brits” in terms of infrastructure projects as well as their excellence in terms of their Civil Service, the seminar speakers were well chosen and managed to spell out historical facts related to infrastructure development, problems encountered with setting goals, parameters, contract provisions and incentives.

Right off the bat, a speaker pointed out that infrastructure projects take time, a lot of time. She shared how many big PPP projects or infrastructure developments took anywhere from 30 to 60 years and not the 6-year timetable that Presidents in the Philippines operate under. It takes roughly 3 years to start and 6 years to get off the table and into actual work. Another speaker made it clear that just because you want or need infrastructure does not mean you’re going to get it or that investors will make a beeline to your door.

However we craft it or sweeten it, investors must get their money back, must be assured of profits and must have a basis for predictability and reliability of the government’s commitment. A history of litigation, project cancellations, or political controversies eventually works against the country’s reputation. Because of past issues on corruption, sovereign guarantees have become a dirty word and the government is wary of giving such for fear of political backlash. The government is also wary of giving subsidies or deals that fall under “use or pay.”

(Unfortunately the real problem over and above all of these is Transparency and public consultation.  Public projects will always have a political component or sensitivity and this should be managed way ahead or early in the project. The PPP Center of the Philippines has successfully managed the pairing and processing of such projects but it is the lead agencies that almost always make a mess of things by failing to talk to stakeholders even before making drafts or proposed plans.)

A couple of speakers spoke about what to avoid disasters or how to work towards successful projects and they pointed out that more time on planning means less time and money spent on fixing problems or mistakes. In once case study the speaker pointed out that grabbing what looks like a cheap or clear opportunity that is not consistent with business decisions could cause you to buy high and sell cheap.

In terms of advise, the best was to continuously enlarge your circle of opinion or group to make sure that you cover all possibilities and concern. This is where the current administration seriously failed and it has caused them so much in terms of support and acceptance. Remember there is wisdom in the counsel of many. But you eventually have to make a decision and act.

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