Duterte's golden age of infrastructure will have to be completed by next president


MANILA, Philippines – Rodrigo Duterte started his presidency with a promise that his time will be the golden age of infrastructure. While his vision is grand, the next president may have to execute and complete most of what will be left unfinished.

Duterte’s economic managers started his term with a list of 75 big ticket infrastructure projects. However, over 3 years in his term, his technocrats had to tweak the list after finding out that some projects were just too expensive. 

Socioeconomic Planning Secretary Ernesto Pernia first disclosed that Duterte’s ambition to link all of the 3 major Philippine islands just had too many obstacles. 

An engineer whom Rappler was able to talk to even said that some new engineering techniques would need to be invented to build under the rough terrain of the deep seas.

Rappler was able to obtain the economic team’s revised list of infrastructure problems through an informed source. We analyzed the list and found the following:

To implement all of the 100 projects, the government needs at least P4.3 trillion.

Five priorities

The new list divides projects into 5 categories:

Of the 5 categories, most projects will address issues on transport and mobility. This comprises over 88% or P3.8 trillion of the projected P4.3-trillion expenses for the infrastructure push.



However, Duterte will not be able to finish all projects during his term. Should all go according to plan, he will finish at least 56 of the 100 projects, or more than half.

The next president will have to complete the remaining 43 projects.

For 2020, the government is planning to start constructing at least 12 projects. Most of the construction will occur only in 2022 or on Duterte's last year in office, covering at least 23 projects.

A total of 41 projects will only start construction after Duterte's term.





The P20-billion Agus-Pulangi Rehabilitation Project and P49-billion Davao International Airport is projected to be completed by 2028.

Meanwhile, at least 16 projects are targeted to be completed by 2023 or just a year after Duterte’s term ends.

Duterte's previous list had around 40 projects to be completed after his term expires in 2022. (READ: LIST: Duterte's new and shelved infrastructure projects)

 


The New Manila International Airport, a PPP project, tops the list of Duterte's dream projects at a whopping P735 billion. 

The Department of Transportation and San Miguel Corporation signed a contract last September 2019 for this project. The construction will be fully funded by private equity, with no government guarantee or subsidy. The 50-year concession agreement also puts Ramon Ang's company in charge of the airport's operations and maintenance.

No promises

In a press briefing on Wednesday, November 13, Presidential Adviser for Flagship Programs and Projects Secretary Vince Dizon said that Duterte never promised to complete all of the pricey infrastructure projects during his term.

"That's impossible, nobody promised that," Dizon said.

Dizon, however, clarified that Duterte promised continuity. He said that Duterte will start the much needed projects and it's up to the next president to implement some of the projects.

In his first State of the Nation Address, Duterte asked for emergency powers to address infrastructure and traffic problems. Congress did not act on this.

At this point, Dizon said that it may be too late for emergency powers.

Meanwhile, Dizon said that out of all 100 projects in the new list, construction in 35 of them has started. This is much more than the 9 projects of the previous list that had 75 projects.

He explained that the economic team decided to highlight some projects and included them on the new list, since these projects progressed during Duterte's watch.

Dizon also added that the new list of projects is an "evolving" one and may change in just months, depending on the assessment of the economic team.

PPPs get love

After over 3 years of being hesitant about pursuing PPP projects, Duterte's new list features 24 projects which will involve the private sector. Of the 24, 13 will be pursued through unsolicited proposals. Two projects will be done entirely by the private sector.

The old list had only 8 PPP projects. The Mindoro-Batangas Super Bridge (P30.9 billion) and North Luzon Expressway East-Phase I and II (P44.6 billion) were stricken off the new list.

Dizon previously said that the PPP projects during the previous administrations "failed to promote public interest." 

Provisions like automatic rate increases, non-interference commitments, and non-compete clauses will not be tolerated under Duterte's watch, according to Dizon.

 


Meanwhile, expensive PPP projects that are currently under construction or are close to breaking ground and were previously not tagged as part of the big ticket projects are now on the new list. These are: 

Location

A total of 50 projects will be constructed in Luzon, of which 22 will be in Metro Manila. Visayas has 15 projects, while Mindanao has 24. 

11 projects will impact the major islands.


Some projects to monitor

While all projects are considered high-impact, Rappler chose to highlight the following projects due to the possible effects on communities, personalities involved, and funding source.

New Manila International Airport. Amounting at least P735.6 billion,  the concession agreement puts Ang's SMC in charge of the airport's operations and maintenance. The government is careful in the fine print and has repeatedly said that previous versions of PPPs placed the government at a disadvantage.

Kanan Dam. Pegged at P57 billion, this complements the controversial Kaliwa Dam (P12.2 billion). Currently, the list does not specify the funding source. It is also being opposed by environmental groups, but is deemed to be the "lesser evil" by some.

Cebu Monorail System. Dennis Uy's Udenna Infrastructure Corporation and its foreign partner were granted original proponent status for the P78.9-billion project in 2018, according to a SunStar report. 

New airport projects. The new list has a total of 10 airports. New ones were proposed for Central Mindanao Airport (P2.6 billion), Masbate (P2.6 billion), and Bacong in Dumaguete (P6.9 billion). Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.

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