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Construction industry sees boom

[ ] November 5, 2010
Private-public partnership (PPP) infrastructure projects are seen taking the P500 billion construction industry to double digit growth beginning next year.
Levy V. Espiritu, president of the Philippine Constructors Association, said the industry continues to be bullish of its prospects over the next three to four years when most of the PPP infrastructure projects will roll out.
But Espiritu said for these projects to attract more private sector participation, policy reforms should be implemented such as the amendment to the build-operate-transfer law, redefining right-of-way acquisition (ROWA) as well as government bias toward solicited proposals.
Espiritu said this year the construction industry is projected to grow 8 percent and even faster beginning 2011, picking up to a double-digit growth rate by the second half.
The PCA expects bidding of some PPP projects to start by the first half with the awarding of contracts by the second half.
Espiritu said private sector development projects which in the past three to four years have overtaken public projects would also continue its boom since there is no glut observed in this segment.
Today, private construction is about 60 percent of the business and public about 40 percent.
"The ratio would shift back to 60 percent public and 40 percent private beginning 2012 as the PPP projects come in," Espiritu said.
The PPP Coalition, which includes the Bankers Association and the Investment Houses Association of the Philippines, has recommended to government three ready-to-go PPP projects for implementation worth about P92 billion .
These are the CALA (Cavite-Laguna) expressway, P10.5 billion; the LRT south extension, P70 billion, and; the LRT east extension, P11.3 billion.
Epsiritu said these are ready to go because these have project feasibility studies that only need validation.
But Espiritu said the PCA has been is pushing for the solicited mode of getting private sector proponents which is an open, transparent and competitive way.
"Unsolicited proposal should not be the rule but just an exemption since it is more open to graft and corruption," Espiritu said.
He added that the government should also consider extending to six months to one year the period within which Swiss challengers can present their counter-offer to proposals.
The group also complained that the current process of ROWA slows down project implementation.

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