Govt must heed unsolicited infra proposals – Penson


Private sector infrastructure initiatives should not be disregarded as the Duterte administration pursues its “Build, Build, Build” program, a businessman said during The Manila Times 6th Business Forum on Friday.

“The value for the money is there for a public-private partnership but the greater value is in unsolicited proposals,” said Ricardo Penson, Chairman and Chief Executive Officer of Penson & Co., Inc. and president and CEO of Ausphil Tollways Corp., proponents of the P15-billion North Luzon East Expressway (NLEEx) project.

“We can accelerate, we can fast-track a project. We cannot keep going back to the very same people that created the problems and look up to them to solve the problems for us,” he said.

The NLEEx project aims to link Quezon City in Metro Manila to Cabanatuan in the province of Nueva Ecija, cutting travel time to just an hour from four. In addition, the design of the proposed toll road will allow it to collect water for the La Mesa reservoir and generate an initial 35 megawatts of power, to be delivered to cement plants in Bulacan that could lead to lower prices of the construction material.

Ricardo Penson, chief executive officer of Penson & Co., Inc. and Ausphil Tollways Corp. PHOTO BY RUSSELL PALMA

Proposed in 2001 and awarded to Ausphil during the Arroyo administration, the project was put on hold by the Aquino government. Penson, a former schoolmate of President Rodrigo Duterte, said in April that the project had been revived and that the groundbreaking will be held later this year.

Penson spoke out against a preference for solicited projects and a policy rejecting sovereign guarantees for private sector partners of the government, which has declared that it will be tapping overseas development assistance (ODA) and concessional loans for “Build, Build, Build.”

“This makes it very confusing,” Penson told the Manila Times forum. “You don’t want sovereign guarantees but we’d rather go ODA—meaning the government itself borrows the money.”

“We (the private sector) prepare the feasibility studies. We prepare at our own cost the preliminary engineering [studies]. We prepare financial models.

We will fund it ourselves especially now that the banking sector of the Philippines is at its highest liquidity. We can borrow more. But we don’t seem to get the yes of the decision-makers of this country,” he said.

He declined to name names when pressed.

In a presentation during the forum, Penson laid out several arguments in favor of unsolicited proposals. Among others, he said that taxpayers would be less burdened, operations and management would be more responsive sans government procurement bottlenecks and technological innovations introduced.

For the latter, he again made reference to the water and power features of the proposed NLEEx.

“What the government fails to see about unsolicited proposals is they have that opportunity to raise the bar on the project or the standards of the project twice,” Penson said, referring to rules calling for a Swiss challenge where third parties are invited to match or top the original offer.

The initial proponent is again given a chance to improve its proposal.

“There must be something else that they see that we don’t that forces them to go ODA or solicited mode,” he added.

“It all boils down to corruption. Unsolicited proposal is private-sector driven. In the solicited form, everybody knows that just for you to be short-listed or pre-qualified costs a lot of money. That’s almost the same money that will be spent to develop an unsolicited proposal except that on our part, we don’t mind spending that,” Penson continued. “There is not a single ODA project that was completed on time … so if you know the comparative cost, the consumer is losing money.”


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