French government-owned firm defends ODA-funded RoRo port projects

MANILA, Philippines –  A French government-owned company maintained yesterday that its official development assistance (ODA)-funded modular roll-on roll-off (RoRo) port project in the country is the most cost-efficent and not overpriced as reported in some news media.

Eiffel, a French government-owned firm and Matiere SAS presented a comparative study to the Department of Transportation and Communications (DOTC) that showed the value and benefits to the country of the French government-assisted modular RoRo ports.

Dr. Patrick Azanza, senior adviser to the French consortium, was commenting on a series of news articles that alleged that the RoRo project was overpriced compared to local proposals without strong supporting facts.

 “We were surprised by earlier news articles alleging that the French modular port is overpriced without showing any basis except a sweeping conclusion from an alleged study which was disowned by the DOTC itself in a formal communication addressed to the Resident Manager of the French Project Consortium,” Azanza, a Harvard-trained former international consultant for the Asian Development Bank, said in a statement.

He said the DOTC admitted the study being cited by the news report did not show “apples to apples” comparison, and as stated in the news report itself, the agency review and re-evaluation of the project is still in progress.

“In other words, the series of articles were very premature and it will only cause misinformation. That would not be fair and may even have serious repercussions given that international loan agreements of this nature is in the heart of the centerpiece program of the present administration on public-private partnership (PPP),” Azanza said.

 “We therefore have to show the public this comparative study to establish that the French modular RoRo project is cost effective and advantageous to the country,” he said.

He said the modular RoRo ports project was analyzed and evaluated based on the unbundled unit costs of the project compared with the standard reinforced concrete RoRo port on steel pipe piles (SPP) and the Spanish modular RoRo ports project previously offered to the Philippine government, which did not materialize.

The financing terms and conditions of the French government COFACE loan for the RoRo project were also considered, he said.

On the basis of the computed acquisition and follow-on costs derived in the foregoing for each of the RoRo port technology under consideration, and using the life cycle cost method of analysis to determine the most cost effective and economical, it was found out that the French Modular RoRo Port technology proves to offer the least cost to the government with a computed present value (PV) of P148,452,847 rate per one unit of RoRo port, he said.

On the other hand, the RC Concrete Port with SPP generated a computed present value of P152,966,320 while the Spanish Modular RoRo port generated the highest PV at P195,322,133. All PVs reflect a discount at 15 percent interest.