Gov’t mulls P200-B infra dev’t arm under NDC

The Arroyo government plans to raise as much as P200 billion for a still to be created Philippine Infrastructure Corp. (PIC).

Trade and Industry Secretary Cesar V. Purisima said over the weekend the proposed PIC would be a subsidiary of the National Development Co. (NDC).

The PIC is intended to "jumpstart" vital infrastructure projects that the Arroyo government is lining up.

Purisima explained that the PIC would initially undertake vital infrastructure projects for which it would eventually invite foreign investors to invest in.

Purisima pointed out that at present interested proponents of big infrastructure projects are not able to start their projects as soon as possible because they have to go through a lengthy process that includes obtaining the necessary clearances, right of way and other bureaucratic red tape.

With the PIC, Purisima said, the government could start the project while inviting foreign investors. The project would already be underway or even near completion when the investors come in.

As such, Purisima said, the PIC would also act as a sort of infrastructure fund.

"The government needs to make sure that our infrastructure is at par or better than our neighbors so we can continue to attract investors into the country," Purisima said.

Purisima cited the South Luzon Expressway (SLEX) through which almost 60 percent of Calabarzon exports go through to get to the airport or Manila port.

He warned that "if that (SLEX) is not improved, then the ability to move products in and out will be severely affected."

Purisima acknowledged that "since it is hard to get investors to come in right now, what we have decided is to jumpstart infrastructure projects so that we don’t waste time."

Initial funding for the PIC, the Trade Secretary said, would be P20 billion, but "ultimately we would like to raise as much as P200 billion as funding for this so we can really have major infrastructure projects."

The initial funding of P20 billion, Purisima said, would come from the resources of the NDC including the so-called ERAP bonds.

Likewise, the PIC would also try to get project-based funding from the Development Bank of the Philippines (DBP) which has also been appointed as financial advisor of the PIC.

Additional funding, the DTI head added, could come from assets transferred to the NDC by such entities as the Privatization Management Office (PMO) or it can seek legislative support.

The first project that is already being lined up for the PIC, Purisima said, is the repair of the Alabang viaduct and the connection of SLEX to the Southern Tagalong Arterial Road (STAR) and the extension of SLEX and STAR all the way to Batangas City from Lipa City.

The extension of the SLEX-STAR system all the way to Batangas City, Purisima reiterated, would encourage companies to use the Batangas Port as an alternative to the Manila Port which is already congested.

Even this early, though, Purisima added, government has lined up several other major infrastructure projects that would develop the eastern side of the country.