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Land acquisition, right of way seen as key hurdles for PPP projects


REFORMS to streamline the process for land acquisition and obtaining right of way will remove the biggest hurdles to projects pursued under public-private partnership (PPP) arrangements, infrastructure stakeholders said.

“The challenge is acquiring the right of way and the get the balance of risk allocation right between the private and public sector,” Asian Development Bank Office of Public-Private Partnerships Director Siddhartha Bhaskar Shah said at a briefing on Thursday during the Philippine Infrastructure Summit.

Public Works Undersecretary Maria Catalina E. Cabral said that process for right-of-way acquisition is dictated by law and is “tedious.”

The law on right of way “is very tedious. It’s a long process (that affects) funding,” she said, “adding that project officers must contend with coordinating with local government units, the courts in charge of expropriation, among others.” 

“The objective is to ease the environment and enable more private sector (investment) to come in. There are still many challenges, and we are revisiting the current law to propose new amendments to ease acquiring land,” she added.

Earlier this month, the revised implementing rules and regulations (IRR) for the Build-Operate-Transfer Law took effect. 

The amendments addressed financial viability concerns as well as bottlenecks that caused delays. The IRR arose from concerns that the private sector was bearing the risk for delays in deliverables the government is responsible for. 

Ferdinand A. Pecson, former executive director of the Public-Private Partnership Center of the Philippines, called for encouraging competition amongst investors. 

“We need to address the current heavy concentration of investments amongst few players in the industry and that is because the way to maximize value is to have more competition, more players. That would help to reduce the cost of user fees or government payments,” he said.

“We also cannot sustain a situation where we rely mostly on commercial banks to provide the debt financing for PPPs. We do have potential sources of financing (from) pension funds or insurance companies. These remain untapped sources of financing,” he added.

Ms. Cabral said that local government units should be capacitated to implement their own projects.

“Infrastructure should not just be on a national planning scale, it should be synchronized with local planning,” she said.

“We know the National Government is in charge of financing transportation infrastructure, but in many large cities abroad, it is municipal transit authority that undertakes the development of the transit system,” Management Association of the Philippines Infrastructure Committee Chair Eduardo H. Yap said.

Mr. Yap noted that the Mandanas-Garcia ruling will help local governments finance more projects.

“It’s a question of whether they have the managerial expertise to undertake and utilize the financial resources,” he added.  — Luisa Maria Jacinta C. Jocson

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