PPP: Spin, truth, and fiction

PPP: Spin, truth, and fiction image

Text: Tito F. Hermoso / Photos: | posted May 27, 2014 17:43

Tracking BOT accomplishments

Recent press releases were singing the praises that President Benigno Aquino III has awarded more build-operate-transfer (BOT) projects than any of the three previous administrations.We quote.....

“In a report, the Public-Private Partnership (PPP) Center said the Aquino administration has awarded to the private sector seven projects. The PPP Center's reckoning however excludes unsolicited projects, or those that the private sector proposed.

"Unsolicited projects were excluded in the assessment as these were initiated by the private sector and are not part of the Aquino administration’s priority list," the PPP Center said.

"BOT projects of local governments were likewise excluded as they were mostly pursued at the local level, in recognition of their local autonomy and independence under the Local Government Code," the agency said.

Created by President Aquino, the PPP Center however didn't indicate whether the previous three administrations' priority lists likewise focused only on solicited projects.

The seven PPP projects awarded so far during the current administration are as follows:

  • Daang Hari SLEX Link,

  • NAIA Expressway,

  • Automatic Fare Collection System,

  • Mactan-Cebu International Airport projects,

  • Modernization of the Philippine Orthopedic Center, and

  • School Infrastructure Project Phases I and II.

The awarded projects cost a combined $1.39 billion and are part of the pipeline of 54 projects identified by the various implementing agencies out of their priority list.

Under the Ramos administration, only two BOT projects were awarded, namely the Land Transportation Office’s Database Infrastructure Information Technology System and the Southern Tagalog Arterial Road of the DPWH -- both costing a combined $128 million.

During the short-lived Estrada administration, only three projects were awarded worth a combined $202 million. These were the Civil Registry System Information Technology Project of the National Statistics Office, the Land Titling Computerization Project of the Land Registration Authority, and the Clark Water Supply and Sewerage Project.

Under the Arroyo administration's nine-year term, only one BOT project -- the $35-million Tarlac-La Union Toll Expressway -- was awarded.” END of quote.


Sounds like a dry run for July's state of the nation address. Against the record of the previous administrations, impressive you might say? By any measure, seven BOT's approved, with 2 more years to go is no small beer. But in the interest of fairness we have to consider what are the so-called extenuating circumstances.

Selective memory, revisionist history

FIRST; the Ramos administration was hamstrung by the legacy of the previous administrations, i.e. the failed economy/near failed state of the Marcos administration and the free-for-all chaos of the Cory administration. As far as business was concerned, we also shot ourselves in the foot with all the coups d' etat, the power outages, widespread labor unrest, debt default and the warring factions in government, fiefdoms of all the disparate anti-Marcos factions. One thinks that the ruling class at that time really took the French Revolution inspired People Power revolt to heart as we mimicked its bloodletting and infighting, warts and all. To expect our country to have an attractive business climate was patently unrealistic.

Poisoned Challis

Still credit is due to the Ramos administration for having doggedly pushed for pro-business legislation, even at the expense of many alleged unfavorable give-away deals and contracts considering it was negotiating in desperation with, not through its own fault, a grossly weakened hand. The BOT law, the foundation of today's PPP investment climate was nurtured during this time and the push of the ex-US bases into vibrant Economic zones got its start during this same period of time.

Asian Century, Asian Crisis

SECOND; The truncated Estrada administration, the first popularly elected government free of any politically destabilizing protests from the losing parties, and its cohesive pro-growth Cabinet was well positioned and predisposed to ride on the beginning of the Asian Century. By this time, new and ambitious business conglomerates were arising, challenging the entrenched commercio-political oligarchy largely untouched from the time of Harry Stonehill. Unfortunately, even if we were well positioned to take off with the rest of Asia, the Asian Crisis befell the region, dragging us down with it. Things were not helped when we engaged in our favorite bloodsport of setting loose our mob lynching tendencies on the President's private bank accounts, sparking another EDSA packaged/branded revolt. Surely a premonition of things to come to the Thaksin saga playing out in Thailand to this day.

Relative calm

THIRD; So we got the street mob's choice of administration, duly rubber stamped by the Constitution only for us to turn against this same Vice President turned President-elect because of the Hello Garci election. At least, the fact that there were no major coups d' etat or Pinatubo/Baguio Earthquake like long playing disasters, meant that there was some kind of relative stability for the 9 years of the Arroyo reign, long enough to let the business of business take a long breather and start warming up for more years of stability to come. Never mind if curfew was imposed once, long after the Martial Law seventies, when some rogue soldiers staged some noisy stunt at the Manila Pen, which ended when the heavy handed Police crashed an armored car through the glass doors and Christmas tree of the lobby. Ironically, one of those rogue soldiers became a Senator.

2nd uncontested President

The preceding calm of the previous administration is something the current administration has to be grateful for. Today we reap the benefits of countless credit upgrades and the almost consistently unshakably positive business climate. President Aquino's election, next to President's Estrada's, is the only other presidential election in recent memory which was uncontested, something we can't say for his Vice President running mate.

Credit and Discredit

Thriving BOT's and PPP's are proof that credit is due to the relative political stability of previous post Cory administrations. Even if the previous administrations are consistently being discredited with broad brush accusations of wide spread corruption.

Planning shortage

So why are the unsolicited proposals not included in the count? It stands to reason that a bureaucracy of government or administration, bamboozled, underfunded and underestimated for many years of one-man top-down rule would have lost the ability, legitimacy and ability for even a modicum of planning. Economic planning's bright boys and girls preferred to be employed elsewhere other than the public sector. Cowed into an inferiority stupor as being behind the times all those years and having been shown the way, the public sector, by default, yielded planning to private sector initiative. Hence, the shortage of public sector initiated BOT's. So when the current administration was looking for forward looking plans, it complained of empty cupboards in main line departments.

Embrace, not exclude

Even if the current administration has admirably caught up and now has a full library of public sector/publicly funded future infra-plans [mostly DPWH], we believe that the current administration's supposed distaste for unsolicited proposals i.e. Ramon Ang's 800ha. Airport, North-South rail, NLEx connector and yes, even awarded contracts like the PHILTRAK Bus Rapid Transit and Metro Pacific NLEx-SCTEx integration which started out as unsolicited proposals, is counter productive. It should welcome all forms of private sector initiative, PPP, BOT and including unsolicited proposals. After all, we have the NEDA to vet such proposals with a fine tooth comb and we have rules to subject them to Swiss Challenge, before awarding.

Reality check

So were the previous administrations underachieving? Upon reviewing all the Infrastructure projects of the past post Cory administrations, including unsolicited proposals and awarded contracts, they do not have such a bad record. Witness, the National Power Grid, expansive and cheap cellular phone coverage, Manila Water and Maynilad Water, rebuilding of the NLEx and SLEx, SCTEx and CAVITEx, the network of Ro-ro ports and the Nautical Highway, the Skyway, MRT-3, LRT-2, several airport upgrades, all of which happened during the Ramos-Erap-GMA terms. Moreover, there were many more in the pipeline in the early half of 2010; LRT 7, North Luzon East Expressway, TPLEx, Nasugbu-Ternate highway link, Laguna Lakeshore Expressway, Adjustable Ro-ro ports for all, the North Food Exchange, the Bulacan-Nueva Ecija bypass highway, LTO Motor Vehicle Inspection System, new plate numbers, etc. Unfortunately, some of these projects were sidelined due to funding problems, suspected faulty awarding or just couldn't fit with the new parameters of the BOT, transformed into the PPP which essentially added the condition of the negative bid, a very profitable advance, sort of like a franchise fee/advance down payment for the government.

Star performers

Much of the success of this current administration is due to a few stellar main line departments that quickly cleared the anti-corruption vetting hurdle of the early months. The DPWH shines in this respect having moved forward with great speed with bridge retrofitting, new roads, thicker concrete pavement standards and the like. For the first time since the 70's, the DPWH is creating solid and workable anti-flooding solutions with its catchment basins, a technique pioneered by Sec. Singson when Metro Pacific was building Bonifacio Global City. The DPWH has accelerated river clearing in the critical CAMANAVA and Meycauayan-Marilao River Delta.

Shame, trial by publicity

Close on its heels, is the DoF, whose BIR has been aggressively and publicly shaming alleged tax cheats, like the way the Red Guards exposed Capitalist Railroaders during Mao Ze Dong's Cultural Revolution. Granted that the BIR's crusade may have chased away some well funded wheeler-dealers and luxury car sales, the given impression of tenacious Elliot Ness-like hunt for cheats has burnished the government's national and international image. The DoF could have fared better if not for the truck ban impairing customs collections in the Port of Manila, which accounts for a huge percentage of government income. All in all, a witch hunting BIR has been good for the business of lawyering and scandal baiting media.


As for the DoTC, well, to put it politely, it could have done more high social impact projects if it didn't get stuck in the minutiae of reinventing the wheel, ferreting out every suspect clause and condition that could spell even the ghost of corruption in all imaginable shapes or form.

The big picture

Even if it crows more about impeaching a sitting Chief Justice and jailing an ailing former President who hasn't even been proven guilty in a court of law, the current administration has done a lot relative to the past administrations., but not in the magnitude of the impression given by the PPP Center's claims, which is strictly just BOT's. Moreover, the PPP wouldn't have its successes if it wasn't for the foundation established by the previous administrations thru all the unsolicited proposals, government awarded contracts and expunging of the devil of political instability. The first Aquino administration allegedly disdained unsolicited advice, especially those coming from Media. Let's hope this Aquino administration, at least, welcomes unsolicited proposals. Even a grateful nation has every reason to expect more from this popular presidency.