Press Release from DOTC

Foreign donors to participate in heavy infrastructure through ODA

Transportation and Communications Secretary Mar Roxas reports additional foreign funding from international donors through Official Development Assistance (ODA) after coming from a successful Japan trip over the weekend—the last leg of a three-nation series of visit, first to China then the U.S.—with President Benigno S. Aquino III.

“The Japan International Cooperation Agency (JICA) is very receptive about participating in the government’s public-private partnership (PPP) projects using a hybrid model,” said Roxas.

With the hybrid model, foreign donors can come in and fund heavy infrastructure projects such airport and railroad developments, while counterpart funding will be provided by a private sector consortium once operations of these new airports and trains commence.

Roxas said among the infrastructure projects that will be funded using ODA include the 11.7-km railway project that will expand the length of LRT 1 from to Baclaran to Bacoor, Cavite, and the development of new airports in Misamis Oriental, Bohol, and Puerto Princesa. Currently, these priority projects are being initiated using the hybrid-PPP scheme.

“Nais po naming mapabilis ang pagtatayo ng mga imprastrakturang mapapabilis ang pagbibigay ng maayos na serbisyo sa taong-bayan,” [Our aim is to develop infrastructure that will give citizens the best and efficient service] Roxas said. “We want to assure the public that in line with the new government’s ‘Matuwid na Daan’ principle, we will adopt transparency in properly disbursing ODA funds, ensuring that it will be used in initiating the right projects.”

Roxas said ODA is a good complement to the current PPP program in fast-tracking projects lined up by the government.

“The ODA loans would benefit the consumers as well since there is no rush in recovering costs. It is a cheaper yet effective option because of the sovereignty of the partnership since governments of foreign donors are involved,” Roxas said.

With ODA, the government would only pay a 1-percent interest rate spread over 30 years, while the private sector is subject to bank rates of 7-8 percent, for the same period.

The ODA-funded projects, Roxas said, will be adopted in line with President Aquino’s 5 Rs policy: “Right project, Right quality, Right people, Right cost and Right on time.”

Published on September 29, 2011