Sep 202016

Despite what they say about the Duterte administration, there is one thing the present government was able to do that the previous leaderships failed to do – fast track approval for important and critical infrastructure projects.

Metro Pacific Investment Corp. subsidiary Metro Pacific Tollways Development Corp. (MPTDC) has just received the notice of award from the Department of Public Works and Highways (DPWH) for the North Luzon Expressway-South Luzon Expressway (NLEX-SLEX) connector road project.

According to news reports, the contract for the project was awarded to MPTDC, the original proponent, as no comparative proposals were submitted to the DPWH during the Swiss challenge held last July.

Being an unsolicited proposal by MPTDC submitted sometime April 2010, the law requires that a Swiss challenge be conducted wherein the government accepts comparative proposals from interested parties, after which the original proponent is given the right to match the best offer given.

The connector road project started out as an unsolicited project by MPTDC in 2010. It was approved by the National Economic and Development Authority (NEDA) board in 2013 under the public-private partnership (PPP) program. However, it suffered several delays because the government at the start said the proposal should undergo a Swiss challenge, and then it changed its mind and the DOTC proposed that the private proponent should instead enter into a joint venture with the state’s Philippine National Construction Corp. Sometime middle of 2014, the Department of Justice opined the JV is illegal, so government went back to the Swiss challenge route.

Then Justice secretary Leila de Lima issued an opinion on July 7, 2014 that the NEDA Board, chaired by former president Benigno Aquino III erred when it approved the joint venture agreement for the connector road project.

From the beginning, the Metro Pacific Group was already amenable to subjecting the proposal to a Swiss challenge.

The connector road project involves the design, financing, construction, as well as operation and maintenance of a four-lane, eight kilometer elevated toll expressway using the right of way of the Philippine National Railways (PNR). It will start at the junction of the NLEX Segment 10 at C-3 Road/5th Avenue in Caloocan, and will connect to the SLEX through the Metro Manila Skyway Stage 3 project in Manila.

The project is expected to help ease traffic congestion in Metro Manila and reduce travel time from SLEX to NLEX and vice-versa to just 15 to 20 minutes from the current two hours. It is estimated that traveling from Clark, Pampanga to Calamba, Laguna would take about one hour and 40 minutes.

It will have at least two interchanges and two toll plazas.

Manila North Tollways Corp. (MNTC) president and CEO Rodrigo Franco said the acquisition of right of way is expected to begin following the receipt of the notice of award and that the government has 30 months from signing of the toll concession agreement to deliver the ROW.

Franco is hopeful the government can deliver the ROW in sections to enable the company to start sectional construction before the 30-month deadline.

The MNTC’s concern about the delivery of the ROW is understandable, considering that a number of road projects have been stalled due to failure to deliver the ROW early.

Socioeconomic Planning Secretary and NEDA director general Ernesto Pernia has said the connector road project is among the 17 stalled PPP initiatives that would be rolled out between now and end of 2017 or even earlier.

For his part, Public Works Secretary Mark Villar said the connector road is one project the DPWH would implement to solve Metro Manila’s traffic crisis and that unlike in the previous administration, no delays are expected in completing the project.

The connector road project will cost around P23.2 billion (inclusive of right-of-way costs), of which the road itself would account for P15.7 billion.

MPTC president Rodrigo Franco remains optimistic civil works on the project could start in 2018 and the entire road completed in three to four years or before President Duterte’s term ends in 2022.

The group is expected to proceed with the detailed design until the end of the year. Right-of-way acquisition would take around 30 months, but Franco said they expect the first section to be available in 2018, allowing construction to start by that time.

The government can no longer afford any delays. A Japan International Cooperation Agency study has revealed that Metro Manila’s traffic congestion, if unabated, would cost the country P6 billion a day or P2.19 trillion annually in productivity losses.

John Forbes, senior advisor of the American Chamber of Commerce of the Philippines, has warned that if roads and other infrastructure are not upgraded immediately, the traffic mess in Metro Manila would likely worsen to untolerable levels and the metropolis would be at risk of becoming uninhabitable as annual new car growth increases to 500,000 by 2020.

Forbes said that while roads are being improved throughout the country, the National Capital Region urgently needs more limited access roads, especially skyways and rail.

The huge multiplier effect on the economy of this one project is beyond question. Those who have suffered traffic at EDSA and C-5 for a long time now finally have something to look forward to. It would be a mortal sin for our government to keep them waiting.

Poor road infrastructure and its resultant traffic congestion, aggravated by government’s penchant for changing business rules midstream and breaching contracts with private partners, continue to dampen investor confidence despite the Philippines’ status as Asia’s newest economic star.

Both the American and European Chambers of Commerce agree that infrastructure is badly needed if economic growth is to be maintained, and that implementation of PPP projects needs to be accelerated, and that poor infrastructure combined with fast growth will lower growth if it creates too much congestion.

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