PPP: Is LRT expansion project going nowhere?

[Entareyehirungu]

Kilichonivutia kwenye makala hii ni swali ambalo kwa mazingira ya nyakati tulizomo Tanzania yamkini tunatakiwa kujiuliza "Is DART/BRT project going nowhere?"

Posted at 10/15/2013 11:34 AM | Updated as of 10/16/2013 3:08 PM

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Commuters ride a train during rush hour on Southeast Asia's first light rail transit (LRT) network, which is 29-years-old, in Manila. Photo by Erik de Castro, Reuters

MANILA - Images of a portion of the Philippines' oldest light rail transit line ablaze in the middle of the night were exactly what private sector bidders for a $1.4 billion rehabilitation of the country's rail system had feared.
The fire last week, caused by a short circuit that ignited power cables lining the tracks, was the second on Manila's elevated rail system in two months and one of many mishaps in its 29-year life - telltale signs that Southeast Asia's first light rail transit (LRT) network is in dire need of an upgrade.

The reliability of the decrepit rail system, without a government warranty on its performance and potential stiff penalties for operational delays, is one of the reasons for last month's failed tender for LRT 1's expansion and upgrade, the biggest in a series of public-private partnership (PPP) deals worth at least $4 billion Manila is offering to investors to further boost growth in one of Asia's fastest-growing economies.
Of the four groups prequalifed to bid, three backed out at the last minute: DMCI Holdings Inc with Japanese partner Marubeni Corp, SMC Infrastructure of San Miguel Corp, and Malaysian-Korean MTD-Samsung C&T consortium.

That left Metro Pacific Investments Corp as the lone bidder submitting a conditional bid without partner Ayala Corp.
"There is no record at all of extensive rehabilitation, maintenance, or infrastructure testing in its years of operation. That is a significant risk," said a senior official at one of the conglomerates who asked for anonymity because of the sensitivity of the issue.

"(If) a segment of that old system falls apart and the accident leads to a catastrophic result, it will be the concessionaire who will be blamed," he said, adding there were steep financial risks via penalties and unrealised profits for each day the rail system is not operational.

The country's top conglomerates and some of the region's big capitalists had initially jumped at the opportunity to fix what the latest Global Competitiveness Report of the World Economic Forum says is the top problem in doing business in the Philippines - inadequate infrastructure.

But delays and problems with PPP projects three years after the programme was launched are clouding prospects of an infrastructure boost to sustain economic growth at 7 percent or higher and bring down the country's jobless rate, which at 7.3 percent is the highest in Southeast Asia.

Underinvestment, including in infrastructure, along with the government's failure to transform protectionist policies and liberalise more sectors, have contributed to the country's high unemployment and underemployment rate, the World Bank said in a report on jobs in the Philippines last month.

The government has said it needs to raise infrastructure spending from around 3 percent of GDP now to 5-7 pct of GDP, or by about P300 billion to P500 billion ($6.95 billion to $11.59 billion) annually, to keep pace with its regional neighbours and sustain its growth momentum.

NOT VIABLE
Officials from some of the bidders said they knew as early as a year ago the LRT 1 project was not going to fly because the government wanted to pass on what bidders called "excessive" technical, economic and even political risks to the private sector with inadequate returns.

They conveyed their concerns to the government repeatedly, during some of the four one-on-one meetings, around 10 small group gatherings and more than 100 emails prior to the bid, but to no avail, the companies say.
Transportation Secretary Joseph Emilio Abaya said the government listened to the companies and changed some of the terms to address concerns.

"We have always kept our ears close to the ground. That's why we spent days, weeks on one-on-ones and answered more than a thousand questions. There were no alarm bells and red lights that came to me days before the bid date," he said in a mobile phone text reply to questions from Reuters.
"We are learning and we want the PPP projects to push through."

The bidders objected to paying real property tax on the rail's expanded 29 km (18 mile) line, since Manila has not paid the tax in the 29 years it has operated LRT 1. The official from the first conglomerate said their calculations showed those tax payments alone would reach 64 billion pesos over the 35-year life of the contract, higher than the project cost.
But their biggest concern was the low tariff setting, which bidders say makes the project unbankable. For LRT 1, Manila is not offering a fixed level of return, unlike in earlier deals.

Using the latest approved fare structure as a basis for the bid, the average fare being set by the government was just a fourth of that in Bangkok, even though rail development costs were similar except for cheaper labour in the Philippines, the official from the first conglomerate said.

Bidders also lament that Manila could not guarantee tariff hikes, a politically charged issue in a city of about 12 million people where the daily minimum wage is under $12. Manila has not imposed a fare hike in more than a decade on any of its three light rail lines due to stiff public opposition, a track record which bidders say could lead to a cash flow squeeze.

"Government should understand they should eliminate risk - risk of income tax, risk of real estate tax, regulatory risk, there are so many risks," said Isidro Consunji, president of DMCI, one of the firms which dropped out of the bidding.

WAR AGAINST GRAFT
For the government of President Benigno Aquino, whose campaign battle cry in 2010 was to end corruption especially in state contracts, the PPP programme was a chance to show the investment community it meant business in its war against graft.

"We want to make sure that the contracts are not onerous and can stand scrutiny beyond this administration," said Cosette Canilao, head of the state agency tasked to oversee the country's PPP drive. "We're making sure that tariffs are not too high and that the level of service is being met." But the drive to ensure less risk exposure to the government is holding up PPP projects, bidders say, with only two out of a wish list of 35 projects getting off the ground.

State officials are afraid contracts they have signed will haunt them after Aquino's term ends in 2016, just like what is happening to several cabinet and top officials of the previous government of President Gloria Macapagal Arroyo, herself under detention for a year now on plunder charges.

Private sector sources say they are encouraged by the government's shift in tone after the LRT 1's failed tender. Officials are considering a subsidy and dropping payment of real property taxes ahead of the rebidding of LRT 1 early next year.
Manila is also putting up a P30 billion contingent liability fund in the 2014 budget to finance possible breaches in tariff setting, and considering a 5 percent increase in the tariff upon completion of the 12 km line extension.

Some of these revisions, however, need the approval of an inter-agency board headed by Aquino, who is sidetracked by some major security and political concerns. With only about 2-1/2 years left before the country's most popular president steps down from office, the private sector hopes big PPP projects will at least be awarded during his term. "We have already reached a point where time is running out on the implementation of these projects," said Ramon del Rosario Jr, chairman of the influential business lobby group Makati Business Club. "But I am still hopeful that the government will get its act together."

 

[PESAYAKO]

Hii miradi ya usafiri mijini mara nyingi ni fursa kwa hizi international financial firms kama WB, IMF na IFC. Huu wa DART wasipoangalia vizuri ndani ya miaka kumi utakuwa hautoshelezi. Dar transport system inahitaji several alternative transport system nasio ku concentrate na aina mmoja. Kunaitajika Chombo kitakachokuwa kinadili na usafiri wa Dar.

 

[Entareyehirungu]

Hii miradi ya usafiri mijini mara nyingi ni fursa kwa hizi international financial firms kama WB, IMF na IFC. Huu wa DART wasipoangalia vizuri ndani ya miaka kumi utakuwa hautoshelezi. Dar transport system inahitaji several alternative transport system nasio ku concentrate na aina mmoja. Kunaitajika Chombo kitakachokuwa kinadili na usafiri wa Dar.

Ninakubaliana na mtazamo wako.

Anzia London, nenda India, China na rudi Afrika msongamano wa magari imekuwa changamoto kwenye sekta ya usafiri. Pamoja na kwamba tatizo linafanana kote, tumetofautinana katika njia za kulitatua. Changamoto ya usafiri wa mijini una pande mbili za mlinganyo; Demand and Supply side. Miji iliyofanikiwa kuikabili changamoto hii imetafuta ulinganifu kwenye pande zote mbili. Tofauti na sisi ambao tumejikita zaidi kuleta suluhisho kwenye supply side kwa kupanua barabara tu, kujenga flyovers na kuanzisha miradi ya mabasi yaendayo kasi. Hili ni suluhisho la muda mfupi kwa maana watu wanazidi kufurika mijini, magari yanazidi kuongezeka, wakati hii miundombinu ikiishajengwa haijitanui yenyewe! Kamwe hatuwezi kujenga barabara za kutosha kuondoa msongamano usijirudie katika kukua kwa nchi na wala hatuwezi kuwa na parking za kutosha magari ya watu wote wanaoingia mijini. Na huu ni mtizamo finyu wa utafutaji wa suluhisho la usafiri kwa maana umeangalia kuwezesha magari tu bila kujali waendesha baiskeli au na pikipiki, na watembea-kwa-miguu. Mtazamo mpana ungehusisha demand-side kwa kuangalia njia mbadala kama vile kupunguza au kuondoa hitaji la mtu kusafiri, kupunguza urefu wa safari, n.k na haya ni vigumu kuyaona kama hatuna Mipango na Sera ya Usafiri Mijini (Integrated Urban Transport Policy). Hatupaswi kusubiri WB, IMF, au IFC watuambie kwamba tunapaswa kuwa na Taasisi za kufanya utengamano wa mipango ya matumizi ya ardhi na mipango ya usafiri mijini.

Kwangu mie, DART kujikita katika kuleta huduma ya Rapid Transport badala ya kujenga Mass/Multimodal Transport Systems naona ni matumizi mabaya ya akili, rasilimali, kodi za watakaolipa deni na muda wa wanaosumbuliwa wakati wa ujenzi wa miundombinu. Ninahakika JF ikiendelea kuwepo nasi (mimi na wewe) tukajaliwa kuishi, miaka mitano ijayo tutakutana hapa kushangaa msongamano kwenye hizi barabara za DART. Yawezekana pia wakati huo baadhi zikawa zinabomolewa tena ili kuzifanya ziwe za Multimodal Transport. Ukitazama ujenzi wa DART na kusoma mpango mzima unahisi kukosekana kwa mtazamo mrefu. Sioni mazingira ya fikra za kuwa na Light Rail Transit (LRT)au Metropolitan Rail System kwenye jiji la Dar. Mabasi na treni za mijini vinategemeana sana. Ukivitenganisha unaleta kadhia kwenye usafiri na utasababisha ghalama kubwa zisizo na msingi kwa abilia. Ndo maana hata e-ticketing za metro na mabasi kwenye miji mingi zinaingiliana.

 

[PESAYAKO]

Mkuu nakubaliana na wewe kabisa. Ukiangalia miji mingi mikubwa dunia public transpot ni combination ya aina tofauti mbili na kuendelea kwa mfano mwaka huu London Underground wamefanya sherehe ya kufikisha miaka mia mmoja na hamsini (150) tangu waanzishe network ya underground ni wakati wa Queen Victoria na ndio wakati walipo plan transport system yao ambayo kwa sasa wanachofanya ni kuiboresha kwa matarajio ya miaka mia mmoja ijayo siyo plan short term plan za miaka kumi au ishirini. Tunaitaji mfumo wa kutuendeleza kwa muda mmfupi, muda wa kati na muda mrefu ndio tunaweza kuendelea na sio ubabaishaji na unatakiwa tupange wenyewe Watanzania na sio watu wa kutoka nje .Watu wanje waje tu kwa ajili kama tukiwaitaji kuongezea nguvu na sio kuja kutupangia kitugani tunatakiwa kufanya sisi sio wajinga kwamba hatujui tunachokitaka. Muda wa kupangiwa umekwisha ni wapi uliona Baba mwenye nyumba anamkaribisha Baba kutoka nyumba nyingine kuja kupanga mipango ya familia yake? Hii aipo kabisa ni muda sisi kupanga maendeleo yetu na kupanga vitu ambavyotunataka sisi na siyo vitu ambavyo wanataka watu kutoka nje. Wanakuja kutupangia na kutuweka kwenye madeni ambayo hayana kichwa wala miguu na kujikuta tunalipa kizazi na kizazi na matokeo yake tutaendelea kuwa maskini kwa vizazi vijavyo bila ya hao wa vizazi vijavyo kupenda.

 

[Entareyehirungu]

...Wanakuja kutupangia na kutuweka kwenye madeni ambayo hayana kichwa wala miguu na kujikuta tunalipa kizazi na kizazi na matokeo yake tutaendelea kuwa maskini kwa vizazi vijavyo bila ya hao wa vizazi vijavyo kupenda....

PESAYAKO,
Mtu ambaye hujadili nami uso kwa uso au anasoma michango yangu mara kwa mara kwenye PPP na miundombinu anaweza kuhisi kwamba hapa ni nafsi moja inaanzisha mada na kujijibu! What a collision on thinking and phraseology?

 

[PESAYAKO]

Kaka hii miradi ya PPP bila wabongo kuelewa watakao kuwa wanafaidi ni wahindi wakina Manji. Tatizo kubwa linaanzia kwenye serikali pamoja na wizara husika hazifafanui sera za kuwanufaisha wananchi.