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Government still needs private sector to build infrastructure projects

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By Madelaine B. Miraflor

A lot has already been said about the country’s infrastructure sector — with the Philippine government even setting aside billions worth of funds to “Build, Build, Build” program — but some are saying that without the private sector or Public-Private Partnership (PPP) projects for that matter, the golden age of infrastructure will still be far from happening.

Enrique Razon and Jaime Augusto Zobel de Ayala

(From left) Enrique Razon and Jaime Augusto Zobel de Ayala

At the ASEAN Business and Investment Summit ysterday, port and gaming magnate Enrique Razon said that the government and the private sector have to be “on the same page” when it comes to infrastructure development.

“While the forum is on ASEAN, I’d like to focus on the Philippines. To be blunt about it, I’m not really concerned with what other countries are doing. I’m more concerned about the Philippines because we have a lot of things to do and a lot of catching up to do,” Razon told businessmen and delegates at the Summit.

“My hope is that this administration is able to change the culture of how things get done in this country. The private sector, I think, we have no problem. We are capable. I use the world culture because that’s what it  is, everybody has to be in the same book on that. Until that happens, we will just be behind or ahead of Laos and Cambodia,” he further said.

For his part, Ayala Corp. Chief Executive Officer Jaime Augusto Zobel de Ayala believes that if only the government and the private sector could work more closely, the infrastructure sector would have improved so much faster.

“I believe in Public-Private Partnerships. Infrastructure is about ecosystem, you can’t just do one piece in above itself… It’s not just about [building] one component to another. I think all of this can’t be done without the public sector and the private sector working together,” Zobel de Ayala said. Razon and Zobel de Ayala spoke at the first panel of the ASEAN Business and Investment Summit, which is happening on the sidelines of 31st ASEAN Summit and Related Meetings being held now in Manila.

Their statements on infrastructure development came at the time when the government seems to have already veered away from PPPs and instead decided to rely more on Official Development Assistance (ODA) in financing the country’s major infrastructure projects.

For Zobel de Ayala, funding is not the problem but the way to implement projects and what standards have to be followed to get them rolling.

“The financing needs are going to be tremendous and of course you could have public sector’s funds coming in and you got private sector funds, [funds from the] multilateral sector, and foreign investments. But in the end you have to have global set of standards to live by,” he said.

“I think structures like PPP, which originally oriented by the US, is a way of getting our standards to come together,” he added.

Meanwhile, Thomas Hardy, acting director at the US Trade and Development Agency, thinks that the private sector needs to exert more effort in explaining to the government their intentions in participating in PPP projects.

“It all goes down to having transparency, sanctity of contracts, and commitment on both sides. In PPPs, at the end of the day, the public sector is giving something up so they need to have partners that is willing to go along and take it,” Hardy said.

As the government’s “slower than expected” rollout of public infrastructure projects caused World Bank to trim its growth projections for the Philippines for this year and next year, it’s already clear that the administration has failed to execute swiftly its ambitious “build, build, build” program.

To recall, the government pledged to spend as much as P8 trillion throughout President Rodrigo Duterte’s six-year term for the infrastructure sector alone.

Critics are now saying that this might be the right time for the government to resort to PPP which they believe is a more successful model than ODA.

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  • da

    That’s direct from the oligarchs’ mouth. In plain language, the government is their hostage.

    If the government administrators believe them or connive with these unsatiable crocs then surely we will fall back to old ways.

    The philippines is a victim of “democracy” which is system of governance unfit for pilipino traits.

    We just need to learn we have to sweat to live. Anything the private sector can the government can, if it really serious, and apply proper discipline. And there is one thing he government can do that the private sector can not do, fight the enemies of the state, for they themselves are among those enemies.

    If the free itself from the fictive concept of cory’s constitution, western style demo, then what the shady private sector can do it, can do better -just get serious. Like what the government accomplished in marawi.

    Hang all oligarchs, their staff and workers are the ones sweating not them; and their capital came from conniving with bank managers playing with ofws earnings. Ask sy,tan, etc.

    • Well said

      • Adre

        Very nice indeed :) !

  • TulisangDagat

    the elite wants the piece of the pie big time, let the small enterpreneur / contractor have some piece of the meat so the common tao elevate themselves ….

  • pinoynga

    Every time government mentions “private sector” it points to just very few individuals and surnames. Those few “private sector” entities will only want to keep their wealth to themselves. Case in point? Even a mere common MRT/LRT station is mired in politicking at the expense of the riding public because only the “chosen few” controls wealth. Philippines may be a democratic government by name, but its economy is worst than the communists or socialists government. Our economy remains exclusive, not inclusive. Members only! Outsiders will be shot.