The government may face delays in building crucial infrastructure projects due to a shift in funding to overseas development assistance loans from an earlier policy of public-private-partnership, one of the country’s biggest infrastructure companies warned Tuesday.
“That certainly got to take into account… My own exposure to ODAs before, since it’s government-to-government, they are subject to certain procurement procedures, protocol,” Metro Pacific Investments Corp. chairman Manuel Pangilinan said.
“And since the funding will come mainly from abroad, say Japan or China, then disbursements of the funds are subject to their review of the government. That may take time,” he said.
He conceded that ODA funds would make the infrastructure projects cheaper to build.
“They’ve taken the view these infra projects which are quite numerous could be better handled if it were done through them using ODA. In a way, government to government financing is cheaper in the longer term than private sector,” he said.
Pangilinan, however, declined to say if ODA-funded projects would work better under the current administration.
But infrastructure projects available under the PPP scheme will be reduced with government’s preferred funding.
Pangilinan, meanwhile, expressed support to the plan to put the Kaliwa Dam project under ODA funding.
“It’s an appropriate project to be built under ODA… Does the private sector have that capacity, probably not, it’s only government that has the capacity procuring the financing for the project,” he said,
PPP Center deputy executive director Eleazar Ricote earlier said the shift to ODA funding would not be unfavorable to PPPs.
“There will always be a keen interest for PPPs as long as the projects remain feasible for both the government and the private sector,” Ricote said.
The Transportation Department recently announced that the Regional Airport Projects, airport development, operations and maintenance for the Bacolod-Silay, Davao, Iloilo, Laguindingan and New Bohol (Panglao) Projects] would be pursued through ODA funding instead of PPP.
The move, according to the department, will lower the cost of the project, adding it would not necessarily mean delays in the implementation. It cited that the shift would avoid legal issues with concessionaires that could cause delays.