Government's tight budget, eVAt worry Cebu contractors

Contractors are worried that the belt tightening of the government's budget would affect their businesses in the next five years.

According to Cebu Contractors Association (CCA) past president Edwin Salazar, there are no feasibility projects being planned as of now that would be implemented in the next five years.

"The government's budget tightening will affect us even more. Five years from now, I believe there will be less government-funded projects," Salazar said.

Usually, he said, feasibility studies are done ahead, but for the last two years now no structural plans are being floated or introduced by the government authorities.

Salazar said that although the government has continually announced its plan to better the infrastructure in the country, in support of the booming tourism sector, there are no concrete plans being introduced yet.

"I'm talking about big infrastructure projects. I think the projects that come from congressional pork barrel will still be there," Salazar said.

Most big government-funded projects are those that cost P100 million and more. The smaller ones are those from P5 million to P10 million, Salazar bared.

"I'm worried that we won't be able to meet the announced infrastructure planning," Salazar stressed.

For his part, Juanito P. Abergas regional director of the Department of Public Works and Highways (DPWH), said that for this year, the government has allocated P1.2 billion infrastructure installations, these include already the foreign-funded projects.

He said P40 million of the P1.2 billion will be used in the road rehabilitation projects. The rest are into creating the nautical highway in Negros.

Earlier, Bohol governor Erico Aumentado said that the nautical highway plan that will link Visayas islands together is on tract and will soon be implemented.

However, Salazar said contractors feared that the implementation of this long-overdue plan will not be pursued in the next few years, as the government is facing several challenges, both financial and political issues.

Another hurdle that will be faced by the contractors is the effect of eVAT implementation to the industry.

They said construction cost is expected to jump once the eVAT will finally be implemented.

Peter L. Dy, president of PLD Construction said the series of fuel price increases have already brought about a significant increase of construction materials such as cement, among others. If the temporary restraining order (TRO) of the eVAT will be lifted, more and more fuel price hike is expected.

Dy said the movement of fuel price and foreign exchange is very important in the construction industry. Majority of the construction materials are imported, thus, construction cost is very dependent on these two factors.