Hitachi keen on PPP projects

HANOI, Vietnam – Global electronics firm Hitachi Ltd. has expressed readiness to participate in the Philippines’ public-private partnership (PPP) program even as it cited the need to reduce uncertainties in the scheme.

“We are seriously considering that,” Kiyoshi Kinugawa, Hitachi chief executive for Asia, told The STAR last Monday when asked if his company is willing to bid for PPP projects.

Kinugawa said they would still identify what projects would suit the expertise of Hitachi. He noted that the company’s strength lies on “social innovation business” like social infrastructure and information telecommunication systems.

Kinugawa, who is also chairman of Hitachi subsidiary Hitachi Asia Ltd., said an issue involved in the PPP program is how to assure investors of returns.

 “The key issue is how the PPP could be arranged, how we can be guaranteed by the government or reduce the uncertainties in doing business,” he said.

Kinugawa said among their possible funding sources if they decide to bid for the projects are commercial borrowing and securing loans through the Japanese government. The funding source to be tapped would depend on the project to be implemented.

The Aquino administration is resorting to PPP to bankroll vital infrastructure projects without putting too much pressure on the budget deficit.

Among the projects to be rolled out under the PPP are the Daang Hari-South Luzon Expressway (SLEX) Link road project, Ninoy Aquino International Airport Expressway phase II project, privatization of the Light Rail Transit (LRT) 1 operation and maintenance project, the privatization of Metro Rail Transit (MRT) 3 operation and maintenance project, and the North Luzon Expressway-SLEX Connector Project.

Last month, a group led by Ayala Corp. won the 30-year contract to develop and operate a new four-kilometer four-lane toll road that will link the southern Cavite province to the SLEX. The Daang Hari-SLEX link road project is the first PPP project of the Aquino administration.

The Ayala group offered P902 million for the project, way higher than the P371 million floor price and the P608 million bid submitted by a group led by San Miguel. 

The construction of the road would cost about P1.96 billion and is expected to start in the middle of the year.

The bidding for the contract to operate MRT 3 and LRT 1 was supposed to be held last July 11 but this was postponed after then Transportation Secretary Jose de Jesus resigned.