MANILA, Philippines – The Department of Transportation and Communications (DOTC) said yesterday the recent awarding of two major infrastructure projects worth P19 billion under the Aquino administration’s public private partnership (PPP) scheme is expected to boost the flow of foreign direct investments (FDIs) into the Philippines.
Transportation Secretary Joseph Emilio Abaya said the decision to award the P17.5-billion Mactan-Cebu international airport expansion project and the P1.72-billion automated fare collection system (AFCS) would enhance the perception of the international community of the Philippines as an investment destination.
The DOTC inked a 10-year concession agreement with the AF Consortium led by conglomerate Ayala Corp. and infrastructure giant Metro Pacific Investments Corp. (AFCS) last March 31 for the single ticketing system for both the Metro Rail Transit and Light Rail Transit (MRT-LRT) after rejecting the appeal of losing bidder SM Group of retail magnate Henry Sy.
The agency last Friday awarded the expansion project of the country’s second largest international gateway to the consortium of Filipino-owned Megawide Construction Corp. and Bangalore-based GMR Infrastructure after resolving the issues raised by second highest bidder Filinvest Group of business tycoon Andrew Gotianun.
Abaya said the bidding process for the agency’s PPP projects are conducted in a fair and transparent manner.
“By sticking to bidding rules and refusing to be influenced by external factors, we are showing the world that the country now has an excellent investment climate. Gone are the days when big-ticket contracts would be awarded despite being tainted with irregularities,” Abaya said.
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With a history of multi-billion-peso infrastructure contracts being burdened with legal and political issues, the DOTC chief said the Philippines has long been viewed as a risky investment option by businessmen around the world.
Several of these contracts, in fact, were entered into by the transport agency during previous administrations.
Abaya believes that part of the process in attracting FDIs, which will boost the Philippine economy, is enhancing confidence in the country’s institutions.
“This entails a perception that, if investors pour their money into the country, everything will be aboveboard, their investments will be protected by our laws, and the government will treat them fairly,” he said.
Data from the Bangko Sentral ng Pilipinas (BSP) showed that foreign direct investments (FDI) jumped 20 percent to $3.86 billion in 2013 from $3.2 billion in 2012 as the Philippines stood out as one the top investment destinations in the region.
FDIs come in the form of new companies setting up shop in the country or multinationals choosing to reinvest money earned in the Philippines into their existing local operations. It could also come in the form of loans from multinationals to their subsidiaries in the country.
The only one way to create that perception, he explained, is to prove it with actions.
“If we promise honest and competent governance, we must show it. If we promise a level playing field, we must do it. We made those promises to investors when we began with this project, and now we have proven it. This will be good for our country, and of course, the people of Cebu who have long been waiting for a world-class airport,” he said.
The tandem of Filinvest and Singapore-based Changi Airports after losing to the GMR-Megawide consortium questions the financial capacity of the tandem to undertake the project and raised questions about conflict of interest in violation of the bidding rules.
