Building a nation, fast

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Ma. Lourdes N. Tiquia

Ma. Lourdes N. Tiquia

WHEN we build the country today, we should build it fast and build it for the Filipinos, not the oligarchs! For ultimately, the owners are the taxpayers. The first protocol therefore of Build. Build. Build. is, damn the oligarchs who cause delays and create problems to protect their turfs.

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Nation-building is a normative concept that means different things to different people. Of late, “nation-building programs are those in which dysfunctional or unstable or ‘failed states’ or economies are given assistance in the development of governmental infrastructure, civil society, dispute resolution mechanisms, as well as economic assistance, in order to increase stability.” And that is obviously the link to an independent foreign policy.

As we have seen before and experience today, nation-building is not an easy task. It becomes doubly hard in an archipelago of 100 million–and counting–Filipinos. From the outset, the kind of infrastructure development plan one would need in the country is pretty much defined by our geology and geography. A lot of linking via roads, bridges, seaports and airports to move goods and people would be needed. A delay therefore is an eternity and could be attributable to the contractors, corruption and/or regulatory capture. Not honoring contracts because of a change in government leads to a standstill despite vested rights and opportunity cost.

Infrastructure may be owned and managed by governments or by private companies, such as sole public utility or railway companies. Generally, most roads, major ports and airports, water distribution systems and sewage networks are publicly owned, whereas most energy and telecommunications networks are privately owned. Publicly owned infrastructure may be paid for from taxes, tolls, or metered user fees, whereas private infrastructure is generally paid for by metered user fees. Major investment projects are generally financed by the issuance of long-term bonds. Hence, government-owned and -operated infrastructure may be developed and operated in the private sector or in public-private partnerships, in addition to in the public sector.

“Hard” infrastructure refers to the large physical networks necessary for the functioning of a modern industrial nation, whereas “soft” infrastructure refers to all the institutions which are required to maintain the economy, health, and cultural and social standards of a country, such as the financial system, the education system, the health care system, the system of government, and law enforcement, as well as emergency services.

President Duterte is now moving from soft infrastructure (peace and order and war against illegal drugs) to hard after his administration launched and made public last November 3 its infrastructure plan. Claiming that for the “first time in history the major infrastructure agencies of the national government are talking and coordinating,” it highlighted the bureaucratic drag among the National Economic and Development Authority, the Department of Public Works and Highways, the Department of Transportation and the Bases Conversion and Development Authority. Touted as the solution to the lack of jobs, high prices and traffic and transportation woes, Build.Build.Build. audaciously asserts that it will spend 5.4 percent of GDP in its first year (FY2017) on infrastructure-building. The end goal of which would be “more railways, urban mass transport, airports and seaports; more bridges and roads; and new and better cities” in three to five years. Truly audacious! But can it do it? Or would it remain just a high-energy, chest-beating powerpoint?

The International Monetary Fund was even quoted in the presentation, “a sustained increase in public infrastructure spending to 5 percent of GDP would add a total of 5 to 6 percent to GDP after 15 years.” Surely, the generational investment in infra is laudable but we have seen how lousy government is in handling infrastructure projects in all the years, post-Marcos. It should be noted that in 21 years of his rule, President Marcos spent on the average 3.2 percent of GDP on infra, a percentage never before surpassed by any president.

It was Marcos who envisioned a better transportation plan for expanding Metro Manila, which included three controlled-access highways, namely the North Diversion Road (now called North Luzon Expressway), South Superhighway (now called SLEX), and Coastal Road (the present Manila-Cavite Expressway). President Ramos extended SLEX to Star Toll, going all the way to the Batangas Pier while President Arroyo focused on the North. President Aquino 2nd took years to finish Cavitex, a 14-kilometer (8.7-mile) access-controlled toll expressway connecting Manila to the southern part of Cavite, and TPLEX (Tarlac-Pangasinan-La Union Expressway), a 88.85-kilometer (55.21-mile) four-lane expressway currently under construction (Phase 3) north of Manila and implemented through public-private partnership using the build–operate–transfer (BOT) scheme in which the project proponent (San Miguel Corp.) is responsible for the design, financing and construction.

If you look at actual, on-the-ground, during the term-of-office launch of infra projects, it appears that Arroyo beats everyone. She had big-ticket projects launched during her term from NLEX, SCTEX (the country’s longest expressway at 93.77 kilometers or 58.27 miles), SLEX upgrade to the nautical highway (where my province, Oriental Mindoro, was further developed because it got connected to Boracay), the Halsema highway in the Cordillera Administrative Region, the concept of “super regions” of growth, and regional and international airports. Her idea was to link and interconnect growth centers nationwide. Arroyo kept pushing the envelope on projects, wanting to inaugurate big-ticket items that even in her last days in office, she wanted lines, lanes and runways operational. An example of which is that of the LRT1-MRT loop, which to this day, despite being inaugurated in February 2010 under her Beat the Odds program, remains pending. Pending because of a common platform dispute and the changing of the rules in the middle of the ballgame, as some would say.

The purpose of constructing a common station, or the Metro Manila Integrated Rail Terminal (MMIRT),was to interconnect the rail systems operated by the Metro Rail Transit Corp. (MRT3), Universal LRT Corp. (proposed MRT 7) and the LRTA (LRT Line 1). That remained pending during the full term of Aquino 2 of sixyears, or a running total of more than eight years and counting

Closing the loop has led to an internecine fight on a common platform long decided by: 1) a MOA between the LRTA and SM Prime Holdings(SMPHI) dated 28 September 2009; and 2) a thorough study done by the Neda on Common Station 2 concerning the location of the common station. As early as April 2009, the Tri-Dev proposal had already been junked because it would not close the loop. Yet, the bidding proposal for the MRT that Ayala joined and won was deliberately amended so the loop will end in Ayala’sTrinoma instead of SM North Edsa, a violation of the MOA.

What did the Abaya-led DOTC do? Simple, they just said the LRTA was not authorized to enter into the MOA with SMPHI and ruled that the P200 million donation of SMPHI, as contained in the MOA, was an “onerous donation,”, which means it should be governed by the rules on contracts. The inference here is that the MOA was not a contract and since the LRTA did not have the authority to sign the MOA, SMPHI was holding an empty bag. The P200 million donation is still with the LRTA.

So PRRD is now left with a problem to resolve. What makes it worse is that even the automatic fare collection system project (AFCS) is loaded because the Ayala-MIPC (AF Consortium) has an assured ridership tacked on to the contract. In effect, if the ridership volumes are not there, the government pays the consortium. AFCS is a tap-and-go system that facilitates efficient passenger transfer to other rail lines, and enhances fare collection efficiency by reducing leakage and fraud. The AFCS can easily be expanded to other transport modes and systems, such as buses and toll roads.

The Abaya-led DOTC gave the contract to the AF Consortium based on a negative bid. This occurs when a bidder pays the government to operate the system instead of the government being paid by operators and passengers. Onerous, right? Further, under the rules set by the DOTC, “bidders and their affiliates who hold more than 50percent of voting shares in Lines 1 and 2 of the Light Rail Transit (LRT), and Metro Rail Transit Line 3 (MRT-3) elevated train systems should be disqualified from the bidding.” Metro Pacific Investments Corp. (MPIC) owns 48 percent, while Ayala Land, Inc. owns 19 percent of the shares of Metro Rail Transit Corp. (MRTC), the private concessionaire of MRT-3.

We have three urban rail transit: LRT-1, LRT-2 and MRT-3. “The first two are managed by LRTA with a compatible fare collection system. MRT-3 is under DOTC operations under a lease agreement with private corporations who undergo bidding to be granted the agreement.” You know where the problem is, right?

You say Build. Build. Build and if we don’t get the contract, let’s kidnap the whole project, simple. If PRRD has launched a war against illegal drugs, he must likewise launch a war against oligarchs who love frying the Filipinos in their own lard and run away with earnings, instead of reinvesting it to better the service. The business landscape is littered with get rich fast and raise capital for another investment schemes. Nothing on contract or better service. Look at the telcos! And so we have the failed educational loans; failed real estate ventures; failed common platforms; distorted toll rates; bad service in expressways (no lights, no restrooms, no emergency booths), etc. If we are to build and build fast, we need to be clear about the rules. And when contracts are signed, we abide by the regularity of the same unless contested and here is where judicial reform is needed fast (and I am not talking of TROs!)

We love to quote the saying, “Rome was not built in a day” but we fail to remember that Rome was eventually built, and it must have been so magnificent that when people admired it, they were told that it didn’t happen in just a day. The question then is: if Rome was not built in a day, how was it built? Answer: It was built every day. Are you ready to Build. Build. Build.?

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8 Comments

  1. Very helpful and positive article.

    So it is the oligarchs’ greed, red tape, lack of intent in honestly abiding by our contractual obligations, as the major obstacles.

    Hope this insight can help provide directions to our admin.

  2. very incisive and unbiased…. i love to read ms malou tiquia’s zilch…. very intelligently done…..

  3. A well researched post. Thanks for the good read! Perhaps one sentence was lacking and that is, Rome was built by Romans. The challenge with the Government is not only with the Oligarchs but how to empower its citizens to make the country great. Countries are built by the people who build them – not by the Govt and companies with money but the hands of empowered citizens to create a functional and secure home its occupants can be proud of.

  4. Ryan the Great on

    Great article. We have to build our grand infrastructure plans together with improving our Agricultural Landscape throughout the whole countryside by the very first year of the Duterte Administration or else we will going to play catch up. Then the 2nd year of Duterte’s Administration will be building Schools, Hospitals, Power plants, Solar Farms and Invest in Wind Energy to Energized the whole country. Then on the third year will be to build ICONIC Towers/Buildings throughout the Major Islands of our country to show to the world our Might. But within those years, our Science and Technology and Sports Programs as well should be develop. We have to build modern sports facilities for our future athletes and modern science laboratories for our scientists to flourish. But the government should invest in Mining and using our natural resources as well to raise more GDP and create more jobs.Then by the time comes 2022, the Philippines will be on the road to glory. Then by 2030, the Philippines will be an Economic Power in all of Asia alongside China, Japan and South Korea.

  5. Congratulations on the finest article I have ever read on what ails RP public infrastructure and national development.

    It is true if not for the yellow sabotage, just imagine what if Arroyo’s North rail project had been allowed to be completed and the ZTE broadband internet highway too.

    Lets still give Pnoy his due credit for the new malls and condos of Ayalas, Sys and Aranetas suddenly springing up like never before all along EDSA from Boni to Trinoma and worsening the traffic mess. Gov’t or rather public land sold off like at a fire-sale during Pnoy is comparable to the FVR auctioning of Fort Bonifacio. The UP-International School on public land bargained to the Ayala’s so it was instantly turned into the UP town Mall, also worsened traffic at CP Garcia to Katipunan. Pnoy’s useless MRT experimental train at the UP main gate, a white elephant eyesore that does not in anyway alleviate commuter woes. Public hospitals and universities sold to the private, all these are just the tip of the ice berg during Pnoy and his criminal presidency.

    The Oplan galugad contrived as a pretense to propose moving the NBP far off to Pangasinan so that prime Muntinlupa real-estate can be sold off to the Ayala’s or some oligarch developer. Had the previous administration’s presidential bet won, it would be a done deal.

  6. Well said Ms. Tiquia, our Pres. should use this noice in manila as camouflaged to start building to avoid destruction from press who loved to focus their camers on anything that gov`t does.6 years is too short for our loved pres. to rule the Phil. under his tutelage phils is safe from corruptors and criminals but he is 72 and tired after 23 years of bldg. Davao City.

  7. I found this article very enlightening. Please write more about how the oligarchs rape the Philippines and, while you’re at it, an overview of land ownership dominated by oligarchs since the Spanish and early American eras. Thank you and more power.

  8. PPP can be defined as a state-subsidized private sector enterprise where a public utility is converted into a milking cow to create massive guaranteed profits for the private partner at absolutely no risk to him and at the expense of the people. When we were in school were were taught that every business venture is a risk. If anybody can point out where the risk lies for the private partner in a PPP project I will gladly shoot myself in the head in front of the Luneta Grandstand. PPP is a World Bank – IMF mandated scam to benefit the international lending mafia and their proxies the local oligarchy. Its just another way of how the West screws the people of this country. In addition to the mega-profits, the lending mafia earns higher interest on the loans that they just create out of thin air because the borrower, the private partner , is a non-sovereign entity but the loans carry a sovereign guarantee. Juan dela Cruz then ends up paying more to use the utility. See the scam yet? To go back to the pre-PPP ways of doing things is another step toward real independence from the American-led West. Lets pray that Duterte sees the light on this one.