Don’t ‘overanalyze’ PPP projects, gov’t urged

Big business groups pitching infrastructure deals to the government are preparing for the new normal as they emerge from strict lockdowns. One thing they wish will be left behind: the habit of current and previous governments to “overanalyze” offers without the guidance of long-term goals.

This leads to multiyear delays in upgrading crucial infrastructure—only to be repeated by the next administration, Christian Gonzalez, executive vice president of global ports operator International Container Terminal Services Inc. (ICTSI), said during a business forum last week.

“It’s like Groundhog Day,” said Gonzalez, referring to the 1993 comedy where a television weatherman relives the same day over and over again.

Gonzalez, a nephew of billionaire and ICTSI president and chair Enrique Razon Jr., was a guest speaker at a webinar on how public private partnerships (PPP) could help as the government diverts resources to fight the coronavirus pandemic.

ICTSI itself is a major PPP player in the Philippines and overseas and has an active offer to develop ports in Iloilo province.

“The success of PPPs will come from not looking at the answer first but rather the problem and objective and putting those into a timeline, which will allow us to create better governance and accountability,” Gonzalez said.

Gonzalez said time was also lost during negotiations as the government tried to “find a perfect contract.” In the ports business, he said the terms for infrastructure in Manila should differ from a facility in Davao or Iloilo.

“We need to realize each of these places is different and we need to realize that if we don’t get these through, we’re basically going to waste two or three years debating these contracts and ultimately end up in the same place when the next administration kicks in,” Gonzalez said.

The government’s insistence on a template also led to protracted negotiations in the airport sector. These included San Miguel Corp.’s P735-billion New Manila International Airport in Bulacan and Ninoy Aquino International Airport (Naia) Consortium’s P102-billion proposal to upgrade Naia.

Proponents behind those projects were forced to accept contentious terms included in the contract of the Clark International Airport in Pampanga province.

Cosette Canilao, CEO of Aboitiz InfraCapital, which is part of Naia Consortium, urged the administration to focus on projects in the advanced stages of development “or lose another four or five years.”

“We need this injection of private sector participation in infrastructure projects as soon as possible,” Canilao, who used to head the PPP Center, said during the webinar.

Coco Alcuaz, executive director of the Makati Business Club, said during the webinar that low-hanging fruits included smaller and faster PPPs related to healthcare, farm logistics and storage.INQ