Chiz: Next Admin should Pursue PPP to Drive Economic Recovery
Increased private sector investment in the government’s Public-Private Partnership (PPP) scheme is crucial to faster economic recovery and must be a priority of the next administration, senatorial candidate and Sorsogon Gov. Chiz Escudero said.
“The next administration should pursue PPP/BOT (Build-Operate-Transfer) aggressively as an avenue to continue with the infrastructure development and the prolific Build, Build, Build program. Whoever will be at the helm of the new administration should try to make PPP more attractive by delivering the promised incentives to private sector partners while protecting the taxpayers,” Escudero said.
Republic Act 6957 or the Build-Operate-Transfer Law, which was amended by R.A. 7718 in 2012, allows private companies to finance, construct, operate and maintain public infrastructure projects. Under the BOT scheme, private companies are allowed to “charge and collect reasonable tolls, fees and rentals for the use of the project facility” within a certain period before turning over the project to the government.
According to the PPP Center, there are 63 PPP projects in the pipeline, which include the five added last year, worth P22.9 billion. These are the Clark Tourism Enterprise Zone; San Pablo City Water District Septage Management; Metro Cebu Expressway; General Santos Sanitary Landfill; and the operation and maintenance of Pasig City Hemodialysis Center.
“The private sector is recognized as the main engine for economic growth, and this is never more important than now, when the government is overwhelmed with an extended health crisis, which demands nearly all of its resources and attention. This is when we need the private sector to step up and fuel economic activity,” Escudero said.
The veteran legislator pointed out that private sector interest and involvement in public projects would only be possible within a climate of trust in government, which makes the 2022 presidential elections critical to the Philippines’ post-pandemic future.
“While the government is cash-strapped and debt-laden, the private sector and banks are awash with cash which the new administration can tap into so we do not find ourselves at a standstill while we are reeling from the tail-end of this pandemic. This option is by far better than raising taxes,” he said.
The law provides tax incentives, government subsidies and minimal regulation to private sector participants in PPP projects, but there are initiatives to amend the BOT Law this year to put in place a social safety net and ensure that people do not suffer excessive charges for the use of roads, facilities and other PPP projects.
“As we pursue PPP, we must also be careful of unduly burdening the people and entering into contracts that are grossly disadvantageous to us. Private companies who enter into a partnership with the government must be willing to be held accountable the way taxpayers hold their government leaders accountable,” Escudero said. #
