The enabling strategy

Dindo Manhit, President of the Stratbase ADR Institute

In the playbook of democratic governance, government and its institutions perform the role of an enabler that provides the necessary legal and regulatory environment for the delivery of better and affordable public services.

While the political stiffness rendered by centralized services has made government programs inept amidst growing and dynamic consumer demands, the political tide of democratization in the past two decades compels governance to be more flexible and adaptable to the changing times.

In this age of privatization, national agencies are working hand-in-hand with the private sector to meet and satisfy consumer demands. Through the public-private partnership (PPP) scheme, the quality of public services continues to be retooled and upgraded to meet the expanding demands of the population.

Policy experts, infrastructure planners and even consumer groups support the expansion of PPP because public services could be delivered in a better, more efficient and impartial manner. The government benefits by harnessing the expertise, capital and nimbleness of qualified private enterprises in meeting objectives and addressing complex challenges. The performance of PPP and privatization models have been globally proven in the most successful economies and continue to be an essential element in accelerating growth in developing nations.

However, we may again be shooting ourselves in the foot.

Widely reported is the recent ruling announced by Supreme Court (SC) involving the Metropolitan Waterworks and Sewerage System (MWSS) and its two water concessionaires said to be “jointly and severally liable” for P1.8 billion in penalties plus tens of thousands for every day of delay in violation of Section 8 of the Philippine Clean Water Act.

This ruling will force Manila Water and Maynilad to finish their sewerage projects within five years instead of an earlier order (G.R. Nos. 171947-48), in February 2011, also by the high court, setting a 2037 deadline because of engineering, bureaucratic and practical realities on the ground that makes it impossible to implement a five year deadline unless the government does another Boracay shutdown in Metro-Manila. The concessionaires are already implementing this order with billions already invested in compliance with the specified timeline.

Independent consumer advocacy group, CitizenWatch in their recent statement describes the SC’s confusing order as, “another case of the country’s unstable policy environment.”

According to their estimates, last month’s SC decision will penalize consumers with water rates that will likely spike to around P16 per cubic meter! This will heavily burden millions of poor consumers and will not fit well with the government’s populist style of policy making.

To compute, the per cubic rate of Manila Water may hit around P59 from P39 while Maynilad’s will rise to P65 from P49. Bad news for everybody.

This unnecessary disruption will be red flagged by potential investors as yet another manifestation of the country’s volatile policy environment and another blow to our competitiveness, scaring away badly needed investments to create quality jobs for our people.

Just thinking of the long drawn out bureaucratic delays such as design and approval of plans, identifying affected properties, finding land for the sewerage treatment facilities, right of way cases, scores of permits, traffic rerouting schemes, construction delays from weather and force majeure, corruption, accidents, and unanticipated screw-ups that have frustrated all administrations, including President Duterte’s shows the wisdom of the Supreme Court’s 2011 decision to give a 2037 deadline to complete the waste water treatment facilities.

Part of the 2011 order is a host of directives to government agencies and LGUs critical on building the integrated sewerage system for the metropolis. These are a compendium of data, plans, and reports, all essential to design, construction and operations.

Directives and deadlines were given to the Metropolitan Manila Development Authority, Department of Environment and Natural Resources, Department of Health, Department of Budget and Management, Department of Education, Philippine National Police Maritime Group, Department of Agriculture, Department of the Interior and Local Government, MWSS, Local Water Utilities Administration, Philippine Ports Authority, and Philippine Coast Guard. Question is, were all these directives complied with? Has real estate been acquired or reserved for the sewerage treatment facilities? Billions of pesos of available resources and manpower will be stuck in costly standstills, like EDSA’s daily traffic jams, without all these prerequisites.

While there is no debate on the urgency of cleaning up our waterways, we must put this complex problem in the proper context where building state-of-the-art water treatment facilities is just a part of a societal crisis that will need the participation of every citizen and visitor of Mega-Manila. Come to think of it, MWSS was right in prioritizing the 24-hour supply of clean water to all its consumers. The water crisis of the 1990s was a distribution problem, while the dry faucets we experienced last January was a supply problem. Now we have the upgraded water system with private funded resources for expansion, but we don’t have enough fresh water. I believe this should be the top priority and the responsibility is with government, and, yes, the fastest and most efficient strategy is through Public Private Partnerships.



This article was originally published in BusinessWorld.

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