Finance Secretary Carlos Dominguez III said the government now prefers “hybrid” public-private partnership deals where the government would first build the infrastructure projects and later bid out the operation and maintenance of the projects to the private sector.
“There are several approaches to that. The first approach”•and which we are most likely going to do”•is we will do [the projects] ourselves first, and then most likely auction out or bid out the O&M. But that is the fastest way to do it. At least we get something going,” Dominguez said in a recent business forum.
He said a traditional PPP project was usually taking an average of 29 months before it could take off, while unsolicited proposals would have at least a 20-month lead time.
“But if we do our projects right away and then bid out the O&M later, I think that’s the quickest way to do it,” Dominguez said.
He said undertaking the construction of PPP projects would prove cheaper in the long run as the government could borrow at lower rates through grants and concessional loans and later on harness the private sector’s expertise in managing, operating and maintaining such infrastructure projects.
Dominguez said the 18 projects approved last year by the National Economic Development Authority board were now undergoing various stages of project development.
“We are not stopping any of those. But opening up to unsolicited proposals is actually very good because we don’t know all the problems, and we may have not identified all of them. So we are inviting the public to help us do it,” Dominguez said.
He said “Dutertenomics” is President Duterte’s economic strategy to dramatically raise funds”•in large part through his proposed tax reform program”•and spend big on infrastructure, human capital formation and social protection to sustain the growth momentum, attract investments and create jobs, achieve economic inclusion and transform the Philippines into a high middle-income country by 2022, by which time poverty incidence would have been reduced to 14 percent.
Under “DuterteNomics,” the government envisions the Philippines to be a high-income economy in one generation or by 2040.
Dominguez earlier said the Duterte administration was looking at several measures, including the monitoring of projects in real time through the use of drones, to place its infrastructure buildup strategy on track and keep such public works free from graft and corruption.
Another is for the government to break up certain major projects into smaller ones to fast-track their completion and attract relatively smaller investors or bidders.
Dominguez said the government might also require doing the construction work on a 24-hour basis whenever possible.