A matter of competence

It was an interesting conversation that members and guests of the Monday Circle had last week with Megawide Construction Corp. founder, chairman and CEO Edgar Saavedra.

The topics ranged from Megawide’s business plans, the Private-Public Partnership (PPP) program, the role of big corporations in taking on more social projects, competence and the government’s role in ensuring better educational opportunities for public servant workers similar to Singapore’s model.

Megawide, according to Ed, will continue to  focus on socialized housing, construction of classrooms and energy-related projects through its renewable energy firm Citicore Renewable Energy Corp. 

Ed proudly identifies himself as a “probinsyano” from Zamboanga who speaks Bisaya and Chavacano. He earned his civil engineering degree from De La Salle University, and  initially worked as a structural designer for a year before deciding to go into construction — mostly small construction projects.

As his company grew, he had to acquire equipment, and as providence would have it, he stumbled upon a German national married to a Filipina who introduced him to German-made construction equipment — mostly “bulok or old, dilapidated  equipment — opening his eyes to opportunities in terms of innovation. 

As his company gained expertise, they were able to buy new and more modern equipment, eventually leading him to pre-fabrication and precast concrete as a necessary step to faster growth and expansion for his company.

While Megawide’s experience and reputation grew quietly with working with bigger well-known construction companies, its public introduction as a competent and world-class construction firm was sealed when it won the right, together with Indian firm GMR Infrastructure, the PPP project for the Cebu-Mactan International Airport project. 

That successful partnership and the remarkable transformation of the old Cebu airport into an internationally-acclaimed airport facility sealed Megawide and Saavedra’s reputation as a formidable construction player, but also unfortunately marked him as David versus the Goliaths. That hard-earned reputation, in turn, has also marked him as competition to the big players —a player outside of the circle.

Ed, however, continues to march to his own drum and speaks, admittedly with some care, about the need to change some aspects of construction and providing services to our less fortunate Filipino brothers and sisters. 

I myself would normally quote the guest speakers at the Monday Circle forum liberally, laboring to faithfully adhere to the taped conversation, but perhaps to avoid compromising Ed and unduly causing any misunderstanding (although of course that can never be avoided), I am writing just the essence of the whole forum in my own words, my perception of what was being conveyed.

He expressed some regret that the government has failed to sustain and push forward more PPP projects, noting that naming more than three PPP projects over the past decade is a struggle.

Likewise, he noted the dearth of participation by big firms in socialized housing and public school construction, acknowledging that while Megawide continues to pursue its advocacy of building classrooms, the margin is indeed quite slim — single-digit — prompting bigger firms to stay away from such nation-building endeavors.

But for Ed, helping the Department of Education build much-needed classrooms in far-flung areas is part of Megawide’s core mission to transform the nation and provide better facilities for Filipinos, be it classrooms or housing facilities. He reveals that it is not even possible to use prefab or precast construction for more efficient and faster completion of classrooms. This is because most often the land allocated or donated for public classrooms are not prime locations. 

More often than not, he explained, the proposed school building site is not located along the main roads but requires passing through narrow roads and is situated on land that needs adaptation for the public school facility. The logistics alone of doing the construction, Ed admits, add to the cost and difficulty of the project and require what he calls a “guerrilla” approach of mobilization for more efficient construction.

He also candidly acknowledges the lack of competency in government and its consequences in providing better government service and efficiency, rather than simply criticizing corruption as ingrained in Filipinos.

Corruption, he argues, is present in other countries, but their saving grace is that their government has put a premium  on competency. Thus, while there is still an element of corruption or “profit taking” the government official is still competent enough to do a good job in completing the project.

Ed sadly notes that in the Philippines there are a lot of incompetent officials who really do not have the skills and capability to complete and deliver good projects.

And this is where Ed cites the Singapore model of ensuring the competency of their government, which is providing their people the opportunity to get quality education, even abroad if necessary, on the condition that they must serve their country for a number of years before they can go to the private sector. 

At the same time, he points out, such foreign-educated government workers must also be paid highly so they are not corrupted.

And indeed, making sure that government workers are paid as closely to their private sector counterparts, would make them less vulnerable to corruption since the salary disparity would not be as wide.

In the Philippines, from my point of view from having covered the Bangko Sentral ng Pilipinas for several years as a banking reporter, the BSP’s remuneration structure has enabled the monetary body to avoid the corruption that plagues most other government agencies whose employees are paid much less than their private sector counterparts, even though the work of those agencies as regulatory or supervisory bodies are more important. Specific examples are the Department of Public Works and Highways, the Bureau of Internal Revenue and the Bureau of Customs.