Mindanao to get lion’s share in 2015 public works budget–Singson

Categories: Business Updates

Date: 13 Aug 2014

FOR fifth consecutive year, Mindanao will get the biggest chunk of the government’s infrastructure budget in 2015, the Department of Public Works and Highways (DPWH) said.

Public Works Secretary Rogelio L. Singson told lawmakers during the hearing on the proposed 2015 national budget that at least 29.5 percent or P63.12 billion of P287.8- billion DPWH 2015 budget will go to different areas in Mindanao.

He added that of the said budget for Mindanao, P11.81 billion will go to Western Mindanao; Northern Mindanao, P18.33 billion; Southern Mindanao, P13.37 billion; Central Mindanao, P8.89 billion; and Caraga, P10.36 billion.

The proposed DPWH 2015 budget of P287.8 billion is 39.3 percent higher than its 2014 allocation of P206.6 billion.

“We really need to focus on how to optimize Mindanao,” he said.

Singson said Mindanao, which has been lagging behind in investment inflows and trade expansion, will be a key area for logistics development, following the completion of a master plan to upgrade its infrastructure network.

He said the Mindanao Logistics Network Program is a hundred-billion-peso initiative to reduce logistics costs in the region by, among others, improving linkage roads to key ports and other production areas.

“[Under the program] we implement an initial P16.2 billion [for fiscal years 2011-2014] for the 410 kilometers or 16 road networks of local and national roads,” he said.

He, however, added that P106 billion is still needed for the construction or improvement of 2,405 kms or the 24 priority road networks in the area.

Moreover, Singson said 23.3 percent of the budget, or P49.7 billion, has been allotted to Northern Luzon, 20.5 percent, or P43.8 billion, to Southern Luzon, 17.7 percent, or 37.8 percent, to the Visayas and 9 percent, or P19.2 billion, to Metro Manila.

According to Singson, the Aquino administration plans to raise infrastructure spending to P800 billion in 2016 to implement a comprehensive development strategy that involves building major roads and irrigation projects, upgrading schools and hospitals and launching massive housing projects for informal settlers, all in support of national growth.

He also said the agency will engage in convergence programs that promote coordination with other government agencies, such as the Departments of Transportation and Communications (DOTC), of Agriculture, of Health and of Education.

“Our goal is to create an integrated transport system where roads leading to airports, seaports, Roro ports, and other transport hubs will be upgraded to national road standards,” Singson said.

Meanwhile, the official said the public-private partnerships (PPPs) are to be intensified to actualize several projects, such as the Cavite-Laguna Expressway, of which construction will be opened to public bidding over the next few weeks. The P35.4-billion 47-km expressway is expected to be completed in 2019.

There is also the DPWH’s biggest proposed PPP project to date—the 47-km Laguna Lakeshore Expressway dike that is expected to cost P122 billion with the completion date of 2021, he said.

Singson added that another PPP project is the P14.9-billion 30.7-km Central luzon Link Expressway Phase I. The completion date of the project is 2017.

Legislator hits DPWH’s ‘low absorptive capacity’

PARTY-LIST Rep. Terry Ridon of Kabataan is worried how the DPWH will implement all the infrastructure projects stated in its 2015 budget proposal, citing its low budget utilization record.

In the budget hearing for DPWH’s P300.5-billion proposed budget for 2015, Ridon asked Singson if the government’s main infrastructure agency can really absorb the additional infrastructure load next year.

“I am concerned, Mister secretary, that your agency is biting off more than it can chew. Why would Congress appropriate more funds for infrastructure if there is no absolute assurance that these projects would actually be implemented?” Ridon told Singson.

“It is my belief, Mister secretary, that most of these proposed projects would just be good on paper, but end up not being implemented—and subsequently—the appropriation for said discontinued projects will just end up as savings, aka DAP [Disbursement Acceleration Program],” Ridon added.

Data compiled by the Congressional Policy and Budget Research Department (CPBRD) of the House of Representatives indicate that the DPWH belongs to the “bottom five” in the ranking of department agencies based on allotment utilization, with an average 79.5 percent actual obligation-to-allotment ratio.

Other agencies in the bottom five include DOTC, 70 percent actual obligation-to-allotment ratio; the Department of Energy, 67.4 percent; National Economic Development Authority, 63.1 percent; and the Department of Agrarian Reform, 61.3 percent.

Allotment refers to the authorization issued by the Department of Budget and Management (DBM) to an agency, through authority contained in the General Appropriations Act (GAA), permitting the same to pay out funds for a particular project within the amount and time specified in the GAA.

An obligation, meanwhile, is a commitment by an agency to pay a sum of money to contractors or other concerned parties in connection with the implementation of a particular project.

Based on CPBRD data, the DPWH posted a low 70-percent obligation-to-allotment ratio in 2011, 79.6 percent in 2012, and 88.8 percent in 2013.

“These data show that on the average, the DPWH is not able to obligate about 20 percent of its approved budget for projects. But now the agency is returning to Congress to ask for more,” Ridon added.

The lawmaker also cited the DPWH’s low utilization rate for Notices of Cash Allocation (NCA), a document released by the DBM to indicate that funds are already available for a particular project.

According to CPBRD, the DPWH only posted a 74.5-percent NCA utilization rate for the period January to June 2013, which even worsened to 72.1 percent for the same period in 2014.

“Clearly, even if funds are already available for the implementation of projects, the DPWH is having trouble in obligating said funds, proof of the agency’s poor absorptive capacity when it comes to project implementation,” Ridon said.

He said such data is “troubling” since the DPWH is asking for an P81.2-billion, or 37-percent increase in its budget, from P219.3 billion in 2014 to P300.5 billion for 2015 (inclusive of RLIP).

Bulk of the additional funds would go to the agency’s Roads and Bridges Program, which has been given some P174.5 billion to “consider new construction design specifications, such as the increase in concrete pavement thickness from 230 mm to 280 mm” and achieve the targeted repaving of “97 percent of the national road system.”

Several big-ticket projects that will undergo the PPP mechanism is also on the pipeline for 2015, including the Tarlac-Pangasinan-La Union Expressway, Daang-Hari South Luzon Expressway Link Road, North Luzon Expressway-South Luzon Expressway Connector Road, and the Ninoy Aquino International Airport Expressway.

“Using the PPP mechanism for big-ticket projects will not increase the DPWH’s absorptive capacity, especially since we have seen how the PPP Center has failed miserably to fast-track the implementation of PPP projects in the past years,” Ridon said.

“Our only point is this: Can the DPWH really implement the projects that it is proposing for 2015? Or are these projects meant to be eventually discontinued and the funds again be pooled for DAP?” Ridon asked.

“The secretary himself admitted in an article by the Philippine Center for Investigative Journalism (PCIJ) that his agency has an absorptive capacity problem, especially with the addition of infrastructure projects under DAP,” Ridon noted.

In part two of PCIJ’s DAP series, Singson was quoted as saying, “Heto ang problema, gusto ninyo akong dagdagan nang dagdagan, may absorptive-capacity problem na ako. Kulang na ako ng contractor, wala na akong makuhang semento [Here’s the problem, you keep on adding on to my plate, I already have an absorptive-capacity problem. I’m running out of contractors, I can no longer get any cement].”

“Before Congress approves any budget increase for the DPWH, the chamber should first be apprised how the said agency targets to address its absorptive-capacity problem. Only then can we be sure that the funds we are appropriating today will not go directly to the President’s discretionary funds or what is known as savings,” Ridon also said.

(With Marvin Benaning)

 

Written by: Jovee Marie N. dela Cruz

Source: http://businessmirror.com.ph/index.php/en/news/regions/37004-mindanao-to-get-lion-s-share-in-2015-public-works-budget-singson

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