Promise of ‘Golden Age of Infrastructure’ ready to be fulfilled – DPWH

Department of Public Works and Highways (DPWH) Secretary Mark A. Villar, says that the department is ready to fulfill the administration’s promise of a golden age. “These will be the years when you will see the construction of many of these large-scale projects,” he adds.

“We have to manage expectations. These master plans are not easy to do,” he explained at a recent forum of a local newspaper. “A feasibility for the master plan of a large-scale project takes almost a year. The detailed engineering can take six months even if it’s a major project.” 

The DPWH is the principal engineering and construction arm of the government, and is focused mainly on building roads and bridges. However, it also has projects on flood control systems, water resource development, and other public works geared towards the attainment of sustainable growth and development.

The DPWH says that the national road network of the Philippines is in a continuous state of improvement, as it plays an important role in the economic development of the country.

“The condition of national roads is often used as an index to assess the extent of the country’s progress,” explains the department. As such, the current administration is investing more into the agency, in order to carry out several infrastructure projects.  

Villar points out that the agency now has a budget of P650 billion, which amounts to more than half of the P1.06-trillion allocated budget for the government’s “Build, Build, Build” (BBB) Program, and does not include the budget of development initiatives led by the private sector.

He adds that the current budget is a significant improvement from the previous administration’s allocated budget of P397.11 billion in 2016, adjusted to the previous budget of just P110.63 billion in 2011.

With this current budget, Villar explains that the country was able to improve its investments in infrastructure to 5% of the country’s gross domestic product (GDP), compared with the previous administration’s 2% of GDP (which is the measure of all goods and services produced locally).

“When compared with other countries, they are spending more in infrastructure. The GDP growth of China reaches 10 percent and even India at the same pace of growth. If we want to achieve high growth we need to invest in high yielding investments like infrastructure,” said Villar.

He says that the government is making sure that it can get past any roadblocks that the BBB will encounter, as the Philippines still lags behind its Southeast Asian neighbors on infrastructure spending. A number of financial institutions have in fact earlier agreed to lend money to many construction firms, resolving any potential funding issues. Finished projects, as well as those that are already in operation, can also be listed at the Philippine Stock Exchange so that the proponent can raise funds to pay off any debts incurred.

Despite all this, construction supply issues are still expected as the infrastructure projects start to break ground. Villar says that contractors have already allocated massive investments in equipment, and suppliers of construction materials are already reserving with the respective sources, in anticipation of huge orders.

Private partnerships

SteelAsia, the country’s largest steel manufacturer, has been ramping up its production for the past few years, driven by the growing demand from the construction industry. They recently reported that they have an output of one million metric tons of rebarbs for the first semester.

Holcim Philippines Inc., a building solutions provider, recently met with Trade and Industry Secretary Ramon Lopez to share their initiatives to better support the government through stable supply of quality cement nationwide, to aid in the infrastructure development of the country. Holcim is currently aiming to raise its cement capacity from the current 10 million metric tons to 12 million metric tons by 2019.

Villar is banking on the assurances from the government’s private partners in addressing the challenges of the implementation of the BBB Program.

“I don’t see any delay. A lot of the prices in the inflation is fueled mostly by the agricultural [issues], so for us I don’t think the effect is that large. We have provisions,” said Villar.

via Business Mirror / VG Cabuag