Gov't stands by PPP scheme
MANILA, Philippines - Transportation Secretary Jun Abaya said the government is standing by its public private partnership (PPP) scheme in big-ticket projects despite criticisms that the agency has low absorptive capacity.
Absorptive capacity refers to an agency's capacity to maximize state resources allocated to it for projects.
At the budget hearing before the House appropriations committee, Abaya admitted PPPis projects undergo a very complicated and sophisticated negotiation process, noting even Indonesia's own PPP has not taken off.
Abaya said there is no lack of interest but the government is at the mercy of the private sector.
"We've never run out of interest. Wala naman kaming narinig, nagsasabing ayaw na namin, ang bagal ninyo. PPP is a very complicated process. It is really a sophisticated negotiation process. Some countries, Indonesia never took off with their PPP. PPP has a spot under the sun especially for countries lacking resources. We allow private money to take part to ensure reasonable rate of return," he said.
For example, Abaya talked about the failed bidding for the LRT Cavite extension project.
"We tried our best to accommodate. We never gave anything they wanted. We're at their mercy. We're not abandoning program. We're tweaking it to accommodate reasonable requests, we will pursue PPP," he said.
The LRT extension project is the biggest DOTC project of the Aquino administration. The Aquino administration has only so far bidded out one PPP project in its four years in office.