Gov't keeps tight rein on LGU projects

Government has begun keeping a tight reign on infrastructure projects initiated by local government units (LGUs) in line with the President Committee on Flagship Projects' directive on build-operate-transfer (BOT) projects.

After suffering the pitfalls of uncompleted, private-initiated projects, the Estrada Administration is now de-emphasizing unsolicited proposals and is shifting back to government-initiated public sector projects.

PCFPP chairman Roberto Aventajado said yesterday that government is trying to build up the LGUs' capability to identify, package, finance and implement public sector projects.

"This is a serious problem because the LGUs' lack of expertise results in sub-standard projects and high financing cost due to poor planning and implementation," Aventajado said.

Aventajado said this has also led to the over-dependence of LGUs on the National Government for the development financing and implementation of development projects in the provinces.

"In some cases LGUs turn to the private sector but such arrangements are not always beneficial to the LGUs because of their inability to scrutinize the project proposals and to bargain for the best terms from private investors," Aventajado pointed out.

After completing its review of public-funded projects under the build-operate-transfer (BOT) scheme, the PCFPP said it noted huge discrepancies in unsolicited proposals that were accepted and the actual projects that materialized.

As a result, the PCFPP said government is now encouraging local governments and national line agencies to front-load the expense of developing project proposals and conducting pre-feasibility studies themselves before bidding out the contract to private contractors.

Aventajado told reporters that a good number of unsolicited proposals have been accepted but have not been implemented especially at the local government level.

Aventajado said LGUs are being swayed by private proponents who submit unsolicited proposals and then ball out midway through the implementation of the project.

According to Aventajado, there is just too many unsolicited proposals especially at the LGU level that have not moved since they were accepted and approved for implementation.

Because government has little funds to spare on project proposals and feasibility studies, Aventajado said the strategy is to attract private groups to conduct and finance these preliminary works.

According to Aventajado, however, there are multilateral fund facilities that government could tap in order to initiate the project and prepare them for bidding to the private sector.

The Asian Development Bank, Aventajado said, has a $3-million facility open to LGUs that want to undertake feasibility studies for projects that would be developed into BOT projects.

The US Agency for International Development (USAID) has a similar facility for national line agencies worth $1 million Aventajado said government is also looking for ways to expedite the implementation of key projects by accepting variants in the BOT scheme and the procedure for accepting unsolicited proposals.