The Market Monitor Minding the Nation's Business
By Luis Leoncio
Unknown to many, there is a large and heavy price tag attached to the proposed emergency powers for President Duterte to solve the costly gridlock bedeviling the country.
A minimum of P1.15 trillion plus would be needed for the infrastructure backup necessary to finally rid the country of its land, sea, air and rail traffic woes, according to Senate Minority Leader Ralph Recto.
The tab could go higher, the senator said, as he noted that many of proposed projects on the list submitted to the Senate by the Department of Transportation (DOTr) to support the emergency-powers proposal “are still without price tags.”
Last Sept. 2, Transportation Secretary Arturo Tugade submitted a list of sectoral infra projects and a draft of the bill that the Senate panel may want to consider in crafting the proposed law.
Sen. Grace Poe, chairman of the Senate Committee on Public Services, which is conducting the hearing on the emergency-powers request, said Tugade was seeking a three-year limit. “In the Senate, we all agree that the President needs emergency powers (to solve the traffic mess) as long as these will not be abused,” Poe said, adding that if all goes well, they could finish deliberations by Christmas.
“Congress and Secretary Art have to work like air-traffic controllers. Let the most important of these undertakings lift off first. What is important is that the crucial projects, even those that may take a long time to complete should go first,” Recto said.
Since it is impossible to fund them all at once, the senator suggested that the DOTr segregate the projects into levels of priority, “from the super urgent to the slightly urgent.”
The senator noted that Tugade’s list included projects that could be put in the back burner, like the construction of a training room in one DOTr-supervised office and the purchase of non-essential computers.
Recto said all the “costings” on the list are tentative and preliminary. “The program of work will reveal the true cost. If you read the proposal of DOTr, there are many activities there whose costs have yet to be computed. Some initially do not have estimated budgets but, for sure, they will use taxpayer’s money later.”
Wish list
Recto said he was also proposing that the DOTr wish list “be clustered under one item in the 2017 national budget so that the budget cover needed to implement these will have the OK of Congress.”
“We should remember that the emergency powers being sought to address the transportation crisis can never include the power to appropriate funds. What it only allows is the fast procurement of projects for which funds have been appropriated,” Recto
The senator said the DOTr list is clustered into four sectors: road, maritime, aviation and rail; its cost of P1.07 trillion is already 93 percent of the department’s P1.15 trillion wish list. The DOtr is programmed to get a P55.4-billion budget in next year’s national appropriations.
With a tentative budget of P58.6 billion, the road-sector projects, by cost, is topbilled by the proposed P39.4-billion Metro Manila Bus Rapid Transit (BRT) Line 2, a 48.6-kilometer loop around Edsa, Ayala Avenue,
Naia and the Ortigas and Bonifacio Global City business districts.
A second BRT line from the Manila City Hall to the Quezon City Hall would need P4.8 billion. Two bus-related projects, an integrated terminal in Parañaque and Taguig, would cost P5.4 billion, Recto said.
DOTr is also seeking P3.3 billion to jumpstart the setting up and operations of the proposed Single Traffic Authority, plus P1.9 billion to end the shortage and regularize the supply of vehicle-license plates and driver’s license cards.
Maritime-related activities would cost P3.9 billion, with P2.9 billion for the revival of the Pasig River ferry system. Recto said this would fund the purchase of 20 100-passenger boats, the repair of eight terminals and the dredging of the 15-kilometer ferry route.
As for the trillion-peso proposed outlay for the rail sector, Recto said this would be dispersed among three major categories: improvement and construction of light rail lines in Metro Manila, Cavite and Bulacan; the Philippine National Railways (PNR) South and North Lines; and the construction of regional networks in Mindanao and Cebu.
Light Rail Transit (LRT) Line 1 will cost P24 billion, plus P3 billion for the Metro Rail Transit (MRT)-LRT Quezon City common station; Line 2, P21 billion; Line 3, which is the MRT, P8.4 billion; Line 4, P84 billion; and Line 5A, P15 billion.
Line 5 will incur the biggest cost: P219 billion for a 14-kilometer subway that will snake through the Makati and Taguig business districts to Manila and the Pasay reclamation complex.
Line 6 from Cavite to Dasmariñas will cost P68 billion while Line 7 from Quezon City to Bulacan will cost P95 billion.
Funding eyed for PNR is P107 billion for its North line to Malolos, Bulacan, and P150 billion for its South line to Biñan, Laguna. A 55-kilometer track extending the North line to Clark will cost an additional P99 billion.
Mindanao rail
Recto said the proposed Mindanao Rail will consist of a 20-kilometer line costing P79 billion in a yet to be named city, while a 25-kilometer line in Cebu will cost P98 billion.
Of the aviation sector’s P18.2-billion share, P10.9 billion will be for Naia, P2.4 billion of which is for a third runway, and P7 billion for the relocation of squatters (informal settlers) on its 96-hectare property.
The P4.4-billion allocation for the Civil Aviation Authority of the Philippines (CAAP) is for the repair and night-flying capability upgrade of the airports in Roxas, Dipolog, Ozamis, Tuguegarao, Cauayan, Pagadian, Catarman, Masbate, Calbayog, Dumaguete and Naga.
Also earmarked are P814.5 million worth of projects for the Clark International Airport, and P635.5 million to modernize the airport at Subic Bay.
In order not to disrupt the structure of the 2017 national budget, Recto is proposing that emergency powers “activities” that cannot be accommodated in the regular program be enumerated in the Unprogrammed Fund portion of the spending bill.
Such a move does not require the President to raise the P3.35-trillion ceiling of the 2017 national appropriations bill—a power that Congress does not possess, Recto said.
He said the Unprogrammed Fund is traditionally used as a “parking lot” of projects whose implementation depends on “funding triggers,” such as the perfection of a loan, a joint-venture project finalized or an increase in revenue collections.
“So now let’s identify the projects that are fundable for 2017. Then we should line them up for the next year, since these are multi-year programs. If they’re on the list, we will know the funding horizon for them,” Recto said.
The senator added that not all projects would be entirely funded by the government. “Many will be built under the PPP scheme. But just the same, we should indicate the government counterpart and contingent liabilities for transparency’s sake.”
Senator Poe said that while she wanted the emergency-powers law crafted by the Senate before Christmas, this did not mean the DOTr could immediately implement the infra projects required.
Poe noted the 64-page list of projects prepared by the DOTr contained proposals such as plans to suspend the powers of the Land Transportation Office (LTO), Land Transportation Franchising and Regulatory Board (LTFRB) and Metro Manila Development Authority (MMDA) to manage traffic in Metro Manila. This indicates there will be a single, synchronized authority headed by the DOTr to manage the traffic and this might take some time to implement, she said.
Poe also noted that Tugade’s list only elaborated on projects in Metro Manila. “I don’t want to criticize the list but there are many points that need to be further explained and detailed. I noticed that only Metro Manila was given attention and not urbanized areas such as Cebu and Davao,” Poe said.
She said the list indicated long-term projects; she said she had expected to see more short-term projects included.
Poe also said that one of the safeguards needed to ensure the proper
implementation of the emergency powers is an assurance from Malacañang that these would be compliant with the Freedom of Information (FOI) executive order.
The hearings on the proposed emergency powers resume Sept 22. Poe said officials from local government units (LGUs) would be invited to attend. Last Sept. 8, the committee convened a technical working group (TWG) to get the suggestions of transport and commuter groups and other stakeholders on the matter.