An asinine approach to infrastructure

Ben D. Kritz

Ben D. Kritz

If there were any illusions that President B.S. Aquino 3rd harbored any sort of sincere intentions to pursue the physical development of this country, he quickly dispelled them with his behavior in marking the first anniversary of Typhoon Yolanda.

That was not a surprise, of course; most everyone except his few remaining indulgent supporters in the media and his own inner circle expected him to be rude and defensive, and he did not fail to live up to it, first by pointedly ignoring Tacloban City—which as the hardest-hit area has been the focus of world attention since day one of the disaster—and second by delivering completely predictable public comments on the reconstruction effort, whining about criticisms of the government’s unambitious efforts and stressing that the typhoon’s survivors should be grateful that anything at all has been accomplished.

To add insult to injury, during his otherwise forgettable remarks, Aquino announced that the government was working on a plan—a plan which no one had previously heard of, and might not actually have existed until he opened his mouth in front of the press—to relocate Leyte’s main airport from Tacloban to neighboring Palo, at a cost of some P12 billion.

Aquino’s vague explanation, related in palengkero-level Tagalog, was that Tacloban’s Daniel Z. Romualdez Airport is susceptible to storm surge, and that its being heavily damaged by Yolanda caused delays in setting up and managing relief efforts. The airport either has to be moved to safer location, Aquino said, or the government would have to invest in building a seawall to protect it from future storms.

The proposal is completely asinine for several reasons. The location of an airport in Palo would be no safer than in Tacloban. If anything, Palo was hit even harder by Typhoon Yolanda than Tacloban was; the center of the storm actually passed closer to Palo. The destruction of Palo probably created more of the disaster management problems bewailed by President Aquino than the damage in Tacloban did, since most of the Region VII government offices were located in Palo.

There is also a case to be made that Aquino himself contributed to the level of damage suffered by the Tacloban airport, and is citing problems that are at least partly his fault as reasons to abandon it. Earlier in 2013, P718.75 million of a P1 billion budget for airport upgrades (out of a total project cost of P2.1 billion) was diverted—with Aquino’s approval—to the illegal “disbursement acceleration program” (DAP). Those funds were intended for work on the airport’s taxiway, apron, and shore protection, and despite reassurances that the upgrades would still be completed, no progress was made for several months, prompting an alarmed Eastern Visayas Chamber of Commerce and Industry (EVCCI) to forward a resolution to Aquino calling for the restoration of the funding. That resolution was rebuffed by the President when it was presented to him at the 40th annual Philippine Business Conference, which incidentally was held just about two weeks before Yolanda struck.

Granted, even if Aquino had changed his mind after being given the chamber’s resolution, it would have already been too late, and the work planned almost certainly would not have completely protected the airport against a 20-foot storm surge. But it would have most likely at least mitigated the damage the airport suffered, and made it easier to put the place to use in the aftermath of the typhoon. Using the airport’s lack of protective structures as an excuse to pursue a politically motivated and unreasonably expensive alternative no one actually needs is irresponsible enough—that those protections are missing because the one proposing the alternative took them away in the first, is criminal.

Thankfully, perhaps, the political motivation immediately caught everyone’s attention, and that attention will hopefully make any pursuit of the proposed Palo airport project extremely problematic for the Aquino regime. Palo, unlike Tacloban, is controlled by close allies of Aquino, the Petilla clan. The current Energy Secretary Jericho Petilla and his parents Leopoldo E. Petilla and Remedios L. Petilla (the current mayor of Palo) have passed the governorship of Leyte, the mayor’s office in Palo, and the 1st Leyte Congressional District seat back-and-forth amongst themselves for years —a dubious history that might suggest that if the Palo airport project were to actually push through, it would probably not be a model of public works management ethics and reliability.

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Another example of how not to pursue infrastructure projects can be seen in the controversial uncertainty now surrounding the Cavite-Laguna Expressway (CALAX) bid award. In June, four bidders—San Miguel Corp. (SMC) unit Optimal Infrastructure Development, Team Orion (a consortium of Ayala’s AC Infrastructure Holdings and Aboitiz Land), Metro Pacific Investments Corp.’s MPCALA Holdings and MTD Philippines—submitted bids for the P35.4 billion project. SMC filed the highest, as it included a bid premium of P20.1 billion, which was nearly double the P11.66 billion and P11.33 billion, respectively, offered by Team Orion and Metro Pacific. MTD Philippines trailed the lot with a premium offer of P922 million.

SMC should have won the bid, having submitted the highest one, but made a stupid clerical error and misdated its bid security coverage by four days, thus not providing the full 180-day bond required by the bid specifications. SMC’s bid was subsequently disqualified, and the award given to Team Orion, the next highest bidder. SMC immediately ran to President Aquino to complain, and on June 30 he signed an order suspending implementation of the Department of Public Works and Highways’ resolution to disqualify Optimal Infrastructure.

Progress on the matter has been stalled since then, and there is no good reason why it should be. SMC blew it; the rules were not followed, and if an enterprise that large and that experienced does not have the resources or attention to detail to make sure its bid package meets the requirements, it probably should not be entrusted with a large, complex construction project worth billions of pesos.

Even so, President Aquino is not sure he agrees, announcing at the Foreign Correspondents Association of the Philippines’ forum toward the end of last month that he is “inclined to think that a re-bid will be the proper course of action on this particular issue,” because the government would have to explain why it decided to pass up a P9 billion bonus.

Again, there is a word that describes that sort of point of view (which is shared by the Philippine Chamber of Commerce and Industry, in stark contrast to just about every other business group in the country), and that word is: Asinine.

First of all, “rebidding the project” would simply be cover for awarding it to SMC, since the bid amounts are already known —unless all the current bidders are disqualified, which would unfairly punish the other three for SMC’s failure to proofread its documents. Second, it completely wrecks any remaining confidence (if there still is any) in the Philippines’ institutional framework for project bids and awards. And finally, Aquino’s greed-bound attention to the excess P9 billion included in SMC’s bid—an obnoxiously excessive amount compared to the other bids, and one that very likely has no rational justification other than SMC wanted this project really, really badly—completely ignores the fact that the amount would eventually come from the pockets of ordinary citizens and businesses who use the new highway.

This kind of uncertainty and inconsistency has been going on for all four-plus years of the Aquino Administration, and it must stop. A good place for it to stop would be to tell Aquino and SMC to take the argument that the latter deserves the project and cram it, and award the project to the next-highest bidder, in accordance with the rules that everyone but SMC followed.


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  1. If the strongest argument you can muster in favor of the Ayalas is the word asinine, then I will take the P9Billion, and I’m sure so will the Ayalas if they were the intended recipient of this money. The Ayala clique in the government turned its back arbitrarily on a firm agreement with Henry Sy’s SM that came with an advance payment of P200Million to build the MRT terminal in front of SM mall just they can give the terminal to the Ayala’s Trinoma instead, so why cant it ignore a totally negligible technicality in SMC’s case? Oh I forgot, its the Ayala clique nga pala. And the clique had the kapalmuks to say they were not going to return the P200M. I will prefer to be called asinine than kapalmux. By the way, you also said ” (it) completely ignores the fact that the amount would eventually come from the pockets of ordinary citizens and businesses who use the new highway.” Are you saying that the PPP is just a means to pick the pocket of the people to give to the rich? Thats what people like me have been saying all along. Im glad you have finally seen the light.

  2. Aquino and his “elite” class members have one strong belief. There is nothing that cannot be manipulated for the good of friends and to hurt enemies. It is easy to understand why court rulings against Aquino makes him mad.

  3. Richard Thompson on

    Bid on the Cavite-Laguna Expressway

    I was intrigued by your article in several ways, but the most prominent was the fact that SMC corporation had the highest bid, almost doubling that of Team Orion’s 11.6 Billion to BUILD the infrastructure. Perhaps it is naiveté, I had always understood that the lowest bidder should be warded the contract-not the highest-the idea was to ensure that there was no contractual premium on such a lump sum bid.

    As you pointed another fascinating aspect of this bid process was that SMC’s bid failed to comply with the bid requirements and therefore was disqualified. Most bids I have been witness to required that the bids be signed with a jurat, to make them binding and any technical exception or change was always fatal to the bid. Therefore, Aquino’s circumvention of the bid requirements by Executive Order does suggest a motive to undermine the bid process and perhaps the laws of the Philippines. Would that not be an impeachable offense? If Bill Clinton can be impeached for playing with a cigar and denying wrong doing based on an interpretation of the words “sexual relations”, surely Aquino’s actions are much more duplicitous? Does Aquino think the the minds of the people have been beset with rigamortis? Aquino owes the people of the Philippines a detailed explanation of his actions and a new Executive Order that restores the infrastructure contract award as originally announced. The public should denounce his actions with strident voices. Likewise, they should protest and boycott SMC for their clear participation in the undermining of this bidding and making a mockery of the public bidding procedure. Aquino is clearly delusional to think that his interference has any benefit to or for the People of the Philippines; transparency of his government; or that it upholds the ethics and convictions of an anti-corruption leader.

    • The judgment on bids is basically reversed for PPP projects, since the government is not laying out any funds — obviously, they’d want the highest bidder.