Infrastructure boom… or bust?

The usual skeptics have dismissed as pie-in-the-sky the recent announcement concerning the “infrastructure boom” that the administration of President Rodrigo Duterte plans to undertake.

According to them, it is wishful thinking to expect the “build, build, build” objective of “Dutertenomics” to get much farther than “plan, plan, plan” by the time Duterte’s term expires in 2022. In other words, they think the boom will be a bust.

I frankly think that the government should be given every encouragement and support for the ambitious plans to be realized. However, a reality check may be necessary.

A public relations colleague, who prefers to remain unnamed, sent me a paper concerning the way government works. He appears familiar with the system. I think his views deserve serious thought:

Almost a year has passed under the presidency of Rodrigo R. Duterte, but many big-ticket infrastructure projects that his economic planners have been harping about remain just that: plans. It is dawning upon the agencies of the administration that launching big-ticket projects are not as easy as they were hyped.

Lending countries will have to evaluate the Feasibility Studies submitted for these infrastructure projects before the actual funding agreement is given approval. This process takes usually 12 months to 24 months.

Once approval is secured by the beneficiary country, Detailed Design and Engineering (DDE) takes place, which takes another 12 months to 24 months. Then there is the Financial Closure which Atty. Arnel Casanova, formerly BCDA Chair said in one forum “may take 24 months to 36 months”.

Before the first track is laid out, the President is already on his way out.

The government, as part of its 8- point economic agenda, is also currently fine-tuning its grand plan to entice private sector players to invest in building transport infrastructure. Among these are railway infrastructure projects such the North-South Commuter Railway and the Mindanao Express, all of which are now on the drawing board. Other projects which sound fantastic on paper are the planned 85km Manila-Clark railway, the 60km Clark-Subic freight train, and Tutuban-Calamba freight train projects.

But how long will these plans stay on the drawing board?

The slow pace of the implementation of these crucial projects is unfortunate as the country’s transport system is essential in the operation of a market economy. It has a broad role in shaping development and the environment.

Our inefficient transportation system has severely impacted daily commuters and motorists, creating a domino effect on industries’ bottom line, and economic development as a whole. Today, we have the worst traffic condition in the world, according to traffic app Waze.

One would think that with Secretary Tugade’s recent go-ahead that the MRAIL project should be given priority and the proponent be encouraged to commence immediately, we can now breathe a sigh of relief that at least one major transport infrastructure project has roared off the starter’s block.

Unfortunately, old habits die hard within the Philippine government’s stultifying bureaucracy where its faceless mantra rules: “what starts at the drawing board, ends at the drawing board.”

To date, a myriad of stumbling blocks, minefields and other incessant bureaucratic tripwires continue to hound the final go ahead for the MRAIL project, from PNR board approvals to DOTr technical conditions/demands. At the rate these roadblocks keep coming up, the soft opening directed by Secretary Tugade within a year’s time will remain just that: a plan.

Recently, Finance Secretary Sonny Dominguez and Transport Secretary Arthur Tugade have switched to a “build, build, build” mantra. Colorful sloganeering, but in order to “build, build, build”, you need to have “power, power, power.” •

The shortage of electricity supply also leads to structurally high electricity prices. The high cost of electricity is a deterrent to foreign investments, and poses a problem to businesses that are already invested in the country.

Sen. Sherwin Gatchalian, chairman of the Senate committees on energy and economic affairs, recognizes that the problem which stymies the country’s economic development is the low power capacity of the Philippines in general, and some big islands in particular. • During his first committee hearing looking into ”institutionalizing energy projects as Projects of National Significance”, he noted that there are many big committed and indicative power plants lining up for investment, but they often encounter bureaucratic delays. 162 clearances, 102 permits for a power plant!

One of the papers he received complained that regulatory permit approval in Philippine electricity generation showed that on average, “power plant operators need to secure 162 clearances and 102 permits.”

I’m reminded of the complaint of a friend, the former chairman of a government corporation, concerning the red tape he had to bear with during the six years of his tenure (he was appointed by President Benigno Aquino III).

He saw the need to upgrade the corporation’s computer system, as well as replace the elevator. None of that happened up to the time a Duterte appointee took over his job. And, mind you, he was chairman of the board.

I think this is where Duterte’s santong paspasan management style should be particularly useful. Perhaps, if he reads the riot act to the bureaucrats who require innumerable clearances, he can get a few infrastructure periods finished before his term ends.

And while he is at it, perhaps he should rethink such projects as the subway system that he plans to build in Metro Manila.

It’s a great idea. And if Hongkong and Singapore can do it, by golly, the Philippines should also be able to build it.

However, the floods that visit Metro Manila, as surely as death and taxes, will make the project even more expensive to undertake. A lesson can be learned from the flooding that hit the New York subway on July 25, 2016. Caused by Hurricane Sandy, the damage forced an 18-month shutdown of the L Train, between western Brooklyn and Manhattan, affecting some 400,000 riders a day. The damage itself cost the city over $4 billion.

Of course, the subway can be flood-proofed – the Bay Area Rapid Transit (BART) runs underwater across the bay, from San Francisco to Oakland – but that multiplies the cost. And the upbeat assurance by Transportation Undersecretary Noel Kintanar that building the subway will be less intrusive than construction an elevated railway system may be a bit naïve.

In San Francisco, the subway extension covering the short stretch from South of Market to Chinatown (approximately 1.5 miles) required shutting down one lane of 4th Street, as well as the business establishments, for several years.

On A. Santos Avenue (Sukat Road) in Parañaque, the pipe-laying undertaken by Maynilad and began in 2015 is just nearing completion as of this date in 2017, with the dug-up lanes being restored. Meanwhile, residents of Parañaque have had to bear the worsening of an already bad traffic situation in that major business artery.

But, as I said, the subway is a great idea. In the meantime, however, maybe a more doable parallel project can be looked into that will also have a significant impact on the Metro Manila traffic situation.

Improve the Pasig River ferry service. Invest in more modern boats. Invest in more thoroughly and regularly clearing the river of water lilies and other debris. Even offer subsidized fare to make the system more attractive to commuters. The man-hours saved and the resultant benefits in productivity, should more than justify it.

And, finally, persuade the bigtime developers to transform the terminals into business hubs that will motivate public transport operators to make them regular pick-up points.

And, oh yes, advertise and market the ferry service to remind people that it is a faster, more comfortable option than suffering :carmageddon.”


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