MANILA, Philippines - There are current issues that involve the construction and operation of several infrastructures. One of them is the NAIA Terminal 3 which, according to reports, involves the violation of the anti-dummy law and alleged overpricing. Second, there is also the Subic, Clark,Tarlac, Luzon Expressway (SCTLEX) and the Southern Luzon Expressway (SLEX) increase in toll fees. Third, is the issue of the fare increase of the Metro Rail Transit (MRT) and the Light Rail Transit (LRT). Finally the electricity charged by electric generating companies and the distribution charges of Meralco whose franchise area consumes more than one half of the entire electricity used in our country.
There are many different issues for these infrastructures. However there is one common concern which is applicable to all and that is the cost at which each was built and consequently the price that the public will have to bear for its use, either by direct payments of charges and tolls or indirectly by government subsidies which burden the people with higher taxes.
Let's start with the most important which is power. Some years back I recall that the rule of thumb of the price of a mega generator was one US dollar ($1) per watt. Therefore, a 100-megawatt-capacity generator would cost roughly $100 million. Today what is the cost of setting up a power plant? Based on the reasonable return on investment, what is the rate per kwh? How about that of the distributor? I believe that the ERB and the Department of Energy should publish the total investments of a franchise holder and the formula for arriving at a specific rate. In this way the consumers will be able to judge if the price is right.
The second category is transportation, i.e., the expressways and the light commuter railways. The construction cost must also be within the current price at the time it was constructed. This will include a reasonable profit for the contractor. The total cost must also be published as well as the formula used to arrive at the reasonable rate/toll to be charged. The same process should apply to LRTs, MRTs, etc. When the government presents transparent figures to the public, there will be better understanding of the situation and there will be less complaint.
Some reports of alleged overpricing that have not been sufficiently addressed are: First, the NAIA Terminal 3; is it true that the project is overpriced? My unsolicited advice is since the previous administration had decided to expropriate it, then government must make its own estimate of the value of the existing facility minus the cost to repair and redesign for structural integrity and safety. Government must stick to its appraisal and let the courts decide the just compensation that the builders are entitled to. It is up to the present administration whether it will use for legal purposes the alleged illegal acts committed by the BOT entity.
Finally at the end of the day, the rates, charges, and tolls will depend on the cost of the project. If the price is right, then the tolls and charges would be right. But if the infrastructure is grossly overpriced, then the public and the government pays for the graft price...rene.espina@hotmail.com.
