“MAP president Francisco del Rosario stresses the need for Government to raise infrastructure spending from a paltry 2.2% of the gross national product to 5% of GNP.
by Ducky Paredes
Renowned architect and urban planner Felino Palafox Jr. notes that Metro Manilans spend around 1,000 hours on congested roads every year as against an average of 300 hours in other countries with better urban planning. This means 700 hours wasted—or as much as 28,000 hours of the average metro folk’s economic life—as a consequence of daily monster traffic plus poor and inadequate road infrastructure.
“So, if you have 40 years of economic life, 40 years times 700 hours a year, (that’s how many hours you waste in traffic),” says Palafox. “You’re like a prisoner inside your car or a prisoner inside jeepneys and buses.”
Businessmen see poor infrastructure and the resulting traffic snafus as one of the reasons investors remain in no mood to park their cash in this country despite our successive credit rating upgrades.
For instance, the Port of Manila’s worsening congestion since last year is estimated to have cost foreign and local businesses over $500 million in combined losses.
ECCP president Michael Raeuber says that port-congestion surcharges at the Manila International Container terminal (MICT) and the South Harbor gridlock reached $166 million while those for trucking was an additional $418 million last year.
“If an economist were to compute this and get a more holistic study, it would be much, much more,” Raeuber said.
Record car sales has alsp aggravated the problem . The higher volume has put more cars on Mrto Manilas’ limited roads.
Automotive industry sales hit 62,882 units in the year’s January-March period or 21.6% higher than the 51,722 units sold in the same quarter in 2014.
The ECCP wants Government to consider short-term reforms before port activity perks up anew in the months ahead, including pushing a master plan for expanding the ports of Subic and Batangas, building an access road system from Cavite to the ports, and offering incentives to businesses to relocate to development areas outside of Luzon as a way to spread out traffic flow.
In a position paper submitted to the PPP Center, the Joint Foreign Chambers of the Philippines (JFCP) wrote: “The private sector is cognizant of the great need for massive infrastructure investments to support and boost the growth of the Philippine economy. We recognize that the government’s PPP provides the framework by which infrastructure development can be accelerated and properly tendered to interested and capable parties.”
MAP president Francisco del Rosario stresses the need for Government to raise infrastructure spending from a paltry 2.2% of the gross national product to 5% of GNP, which is also the recommendation of the World Bank (WB).
For former Finance Secretary Roberto de Ocampo, “Nearly-standstill traffic day after day is not the best face to present to the world to reflect our coming of age and attractiveness as a headquarters hub for an Asean region on the cusp of closer economic cooperation.”
With the issue of mass transportation obviously dragging P-Noy down to record lows on his watch, there are “surgical operations” that his Cabinet can perform in at least two areas —port congestion and the MRT3 pickle—to prevent his performance and satisfaction scores from further going south in the five remaining quarters of his presidency.
After legislators last year shot down the Department of Transportation and Communication’sP54-billion buy-out proposal by deleting the Equity Value Buyout allocation in the 2015 national budget, the best that DOTC executives can do now is ditch this EBVO plan altogether and consider any of the three separate proposals on rehabilitating the dilapidated MRT3 or taking over the EDSA line’s operations.
NLEX-SLEX Connector Road
Government also needs to get moving on the Metro Pacific Tollway Corp. (MPTC)’s unsolicited proposal to build a 13.4-kilometer expressway linking the North Luzon Expressway and South Luzon Expressway next to the parallel NLEX-SLEX Connector Road now being built by San Miguel Corp. (SMC) through its consortium with the Citra Metro Manila Tollways Corp. (Citra).
The SMC-Citra project covers the Skyway Stage 3 of the SLEX, while MPTC’s portion involves the construction of the four-lane elevated expressway, originally over the PNR tracks, with three exits to connect NLEX with SLEX.
What happenned to MPTC’s P11-billion NLEX-SLEX Connector Road proposal is a classic sob story on what goes wrong with the Government’s PPP infrastructure program.
Originally set for partial completion before P-Noy steps aside next year, MPTC’s proposal was conditionally approved by the government three years ago, after getting the thumbs-up separately from the National Economic and Development Authority (NEDA), Department of Environment and Naural Resources (DENR), Metro Manila Development Authority (MMDA) and the local government units (LGUs) of Makati, Manila and Caloocan.
The Japan International Cooperation Agency (JICA) has likewise cited the importance of this road project in terms of its multiplier effects on the Philippine economy.
P-Noy even singled out this project as one of those he wants completed before his term ends in 2016, but delays brought about by official confusion on whether to build this unsolicited proposal via a Swiss Challenge or a joint venture (JV) between MPTC’s subsidiary Manila North Tollways Corp. (MNTC) and the Philippine National Construction Corp. (PNCC).
PNCC holds the franchise for both NLEX and SLEX, while MPTC has the Supplemental Toll Operations Agreement (STOA) for its road projects under NLEX Segment 10.
MPTC’s connector road or Segment 10.2 is an 8-kilometer mainline road from C-3 Road in Caloocan City to the Polytechnic University of the Philippines (PUP) in Manila’s Sta. Mesa district. It will also have a 2.6-kilometer Port Area spur road from C-2 Road to R10 in Tondo, Manila.
This will be linked to MPTC’s Harbor Link project, which is a 2.4-kilometer road connecting NLEX to the MacArthur Highway and a 5.65-kilometer road connecting Mindanao Avenue in Quezon City to the Manila North Harbor.
MPTC executives were optimistic that once the documentation and approvals could be secured by June 2014, there would be a chance for the firm to immediately connect Harbor Area to Sta. Mesa and PUP, and then connect it to the SMC-Citra component of the NLEX-SLEX connector project.
The SMC-Citra proposal did not have to go through a Swiss challenge, but the MPTC had to because its offer was an unsolicited proposal.
The SMC-Citra portion is the Skyway Stage 3 of the SLEX, while the MPTC portion involves the construction of a 13.4-kilometer four-lane elevated expressway via the PNR tracks, with three exits to connect NLEX with SLEX.
MPTC’s road project was conditionally approved by the government two years ago.
President Aquino gave the go-signal to the project in January 2013, but nothing actually moved because the Chief Executive’s subordinates kept changing the rules.
Everything was all set for a Swiss Challenge at the onset, but the project took a back seat after policy makers said it would be easier and faster for MPTC to build its version of the Connector Road under a JV with PNCC.
When all preparatory work for a JV were wrapped up, there suddenly was a change of heart and Government said it would be best after all to pursue MPTC’s unsolicited proposal via the Swiss Challenge.
Under the Swiss Challenge, any of the interested parties other than the original proponent can win the project by making a better offer than the firm that made the unsolicited proposal. However, the original proponent still gets to keep the project once it matches the best offer from among the rest of the bidders.
With the latest delay, MNTC will have to revise the alignment of its proposed Connector Road to give way to the P171-billion North-South rail project, which was approved by the NEDA Board only recently.
This design revision and the delayed schedule of the Swiss Challenge will increase the cost of the project by 30% to P14 billion from the original estimate of P11 billion, according to MNTC president Rodrigo Franco, and allow MPTC to complete it by late 2017 or early 2018 at the soonest.
MPTC will be able to finish it in two year’s time on condition that Government will stage the Swiss Challenge by the year’s second quarter as now scheduled.
“We will now have to revise our design to accommodate the construction of the North-South rail project,” Franco said in an end-March news report. “The cost will really increase and we are expecting it to go up by 30%.”
Franco explained that under the original proposal, this connector road was to cost about P18 billion, but this estimate was pruned to P11 billion after MPIC and SMC agreed to initially shoulder the cost of the five-kilometer common alignment connecting MPTC’s NLEX-SLEX Connector Road to SMC-Citra’s Metro Manila Skyway Stage 3 project.
“The construction cost for the eight-kilometer main connector road is P11 billion under the old scheme but will increase by 30% or another P3 billion, so it will now be P14 billion,” says Franco.
He explained that the proposed NLEX-SLEX Connector Road and the North-South rail project to be undertaken by the DOTC under the PPP will use the right-of-way of the state-run Philippine National Railways (PNR).
“The connector road and the North-South rail project will use the PNR right-of-way,” he said. “Both projects could be side-by-side, but in other parts the connector road might have to go above the North-South rail project.”
The proposed 653-kilometer North-South rail project South Line PPP will stretch from Metro Manila to Legazpi City in Albay, and will cover commuter railway operations between Tutuban and Calamba, Laguna and long haul railway operations between Tutuban and Legazpi, including extended long haul rail operations on the branch line between Calamba and Batangas and extension between Legazpi and Matnog, Sorsogon
The NLEX-SLEX Connector Road will improve transport logistics as a result of the more efficient movement of cargoes, roll-on, roll-off (RORO) vessels, and passengers in and out of the ports located in Manila, and would reduce travel time from NLEX to SLEX to only 15 to 20 minutes.
Investors would start flocking to the country when the projects are completed because it would enhance connectivity between our international airports and seaports, including the Subic freeport by way of the NLEX-Subic-Clark-Tarlac Expressway (SCTEX) route, the Batangas Port via SLEX, and the Clark International Airport to the Ninoy Aquino International Airport (NAIA).
This will, in turn, improve linkages between the key growth areas of Metro Manila, Central Luzon, North Luzon and the Clark-Subic corridor.
The NLEX-SLEX Connector Road will decongest EDSA, Circumferential Road 5 (C-5) and other roads in Metro Manila’s inner cities because these choked arteries would be freed of heavy vehicles traveling to and from the Port Area.
In terms of environmental impact, the MPTC project will reduce air pollution and fuel consumption, in support of the government’s climate change agenda.
Experts note that the speedy implementation of the NLEX-SLEX Connector Road and the rehabilitation and/or takeover of MRT3 will not only raise public satisfaction in P-Noy’s performance; it will also boost investor confidence by addressing the concerns of foreign and local businesspeople over undue delays in PPP and other big-ticket projects.
With barely a year left, it is only now that several PPP contracts are being bid out. Out of 57 PPP projects drawn up in 2010, only eight have been awarded so far and all were solicited projects.
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