Quality and quantity in infrastructure projects

Infrastructure development has long been recognized as a driving force of an economy. The growing population of the Philippines and its rapidly developing economy demand an increase in infrastructure.

The current administration has made clear that infrastructure is a priority with the Build Better More flagship program, facilitating infrastructure development across various sectors including physical connectivity, water, and power and energy. Some 186 projects across the country have been rolled out, with an approximate aggregate cost of US$163 billion. 

This is not just a numbers game, either. Equally important is the resilience and sustainability of the infrastructure projects, such that they are able to withstand the passage of time and the occurrence of natural disasters, to which the Philippines is prone.

Moreover, infrastructure projects need to be transformative – not just big-ticket or costly, but able to truly make a difference in the lives of the people both at the present time and in the future. They lay the foundations for a prosperous and competitive future that will position the Philippines as a dynamic player in the global economy. 

The virtue of public-private partnerships is key to this. The government neither has the wherewithal nor the technical expertise to undertake infrastructure projects on its own, and it is here that the private sector becomes an indispensable partner in nation building. The private sector has time and again proven to be a valuable partner of the government in the financing, construction, and operation of infrastructure projects. 

And there is room for an even closer partnership. Accelerating infrastructure development will undoubtedly be a strong foundation for progress and a sustainable future for the Filipino people. 

There have been notable best practices in public-private partnerships for infrastructure development. The example set by the public sector’s collaboration with ACCIONA easily comes to mind. ACCIONA is a Spanish infrastructure company that has moved its regional office from Singapore to the Philippines. 

ACCIONA is a key player behind the Cebu-Cordova Link Expressway in Cebu, as a member of a joint venture together with First Balfour and DMCI. The provincial government of Cebu also inked an agreement with ACCIONA Energía to develop a solar project in Daanbantayan.

This project is worth US$130 million, and is expected to address the electricity demands of the province and hence contribute to energy security in the province. This is, I believe, an example of transformative potential. The Board of Investments has awarded this project the green lane status so that it could expedite its permit processing and begin construction at the soonest possible time. 

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Indeed, Cebu is a premier destination for tourism, shipping, heavy industry, and business processing services. The quality of infrastructure in Cebu is crucial to support these industries and its people.

Enhanced energy systems and improved water infrastructure will not only secure reliable utility services but also foster increased economic activity and attract both existing and new investors. These advancements are crucial to maintaining Cebu's status as a leading economic hub in the Philippines and ensuring its continued growth and prosperity in the region. 

In acknowledgment of this, Stratbase co-organized a forum titled Cebu Rising: Transforming Growth with New Infrastructure, Water, and Renewable Energy held last Saturday in Cebu City. 

The Department of Transportation’s Undersecretary for Planning and Project Development, Timothy Batan, said “mega projects” required “mega preparation to be successful” and revealed they are now in talks for a Metro Cebu Subway Project. ACCIONA’s Head of Business Development for Southeast Asia, Francisco Moreno, said that the banking system and equity partners are very willing to put their money in the Philippines for a reasonable return, but said right-of-way issues must be a priority. 

The President and General Manager of the CCLEX, Allan Alfon, affirmed that the public-private collaboration made the project a success, especially in terms of economic returns to the province and the Central Visayas. 

ACCIONA’s Ruben Camba, who is also the President of the Spanish Chamber of Commerce in the Philippines, said the keys to success are reputation and trust. “If, as a foreign company, you want to do business in another country, it is important to have a local partner.” 

Department of Energy Assistant Secretary Mario Marasigan talked about the energy mix target of the government – 35% RE by 2030, and 50% by 2040 – and painted the scenarios by which they would move to achieve this. 

ACCIONA Energia’s Ignacio Domecq, Managing Director for Southeast Asia, said they were comfortable investing here because of the Philippines’ strong sovereignty. “It has rule of law. You mentioned an energy auction program and that’s something that almost doesn’t exist in neighboring countries. Banking system is key. In the Philippines, you encounter a sophisticated banking industry that is able to do lending in local currency.”

Metropolitan Cebu Water District Board Member Miguel Pato recalled how Cebu was affected by the last El Niño, at a time when none of its desalination plants were still running. He is confident that when the next El Niño comes, they would be able to manage the plants to rotate supply if they need to. “This water crisis is being felt worldwide, and I think MCWD is very open to engaging the private sector to introduce new technologies for desalination,” he said. 

Jose Maria Ortega, ACCIONA’s Water Development Director for Australia and Asia, said they are eager to learn Cebu’s specific needs. “We need to understand how to integrate them into the system, because let's not forget that once you generate the water, you have to distribute it efficiently.”

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At the end of the day, this is not just about Cebu, and this is not just about the best practices of one company that decided to take a chance on the Philippines. It is about the aspiration of a nation to elevate the quality of life of its people and to enable them to contemplate a future where they are economically secure. 

Infrastructure is so much more than flagship projects – they are a statement of hope, that they, in tandem with other equally crucial undertakings, would be able to transform a community, a geographic area, and an entire nation. As I have mentioned in my previous articles, it has been proven that private sector participation is needed for better infrastructure in the country.

Rupert Paul Manhit is the COO and managing director of think tank Stratbase Group. He is the executive director of Philippine Trade Foundation (Phils Inc.)