Wednesday, November 29, 2006 Foreign-funded infra usually overshoots budget: official
PUBLIC Works Secretary Hermogenes Ebdane said the cost of infrastructure projects, especially those foreign funded, would go beyond its original price.
"We have observed that for foreign funded projects, the total costs often escalate to 30 percent in excess of the allotted budget," Ebdane said.
He said a road project, which is initially worth P2.5 billion, can go up to as high as P4.5 billion mainly due to consultancy fees and design costs.
Ebdane however said without foreign funding, the government can save as much as P300 million through local funding of infrastructure projects.
"For foreign-funded projects, consultancy fees alone for foreign consultants are worth P300 million," he said.
Ebdane said foreign lenders also require the designs to be made by foreign designers so Filipino talents are not being utilized for national projects.
He said whenever foreign funding is involved, foreign contractors have the edge over local bidders because the materials needed for the foreign designs can only be provided by the foreign contenders.
"Why do we need to have them design the projects? For tourism purposes? I don't think tourists will be too concerned about design as they will be more concerned about durability and accessibility," he said.
He said a recent bidding for World Bank (WB)-funded projects in Negros Oriental, Negros Occidental and Surigao, which was declared a failure, is a classic example after the foreign lender rejected local bidders who did not meet their requirements.
The DPWH, in turn, had several requirements which were found unacceptable by the WB.
"I have requested for local funding from the President to push through with the Negros Oriental connecting to Negros Occidental project and another one in Surigao and was approved by the President," he said.
He said local government units will pool money for the three projects with the National Government providing additional money on a yearly basis.
"I think it will be better for us (if we use local funds for projects) because we would have more control over the entire process while our own people benefit from the project. We will be better able to monitor the progress without foreign intervention," he said.
"It is better not to borrow money altogether. Who knows, by 2009 or 2010, we will be able to settle our international debts," he added. (MSN/Sunnex)
