President Benigno Aquino III is canceling or reconsidering foreign-funded infrastructure projects worth $2 billion, saying that although his country badly needs the improvements, the contracts are overpriced and technically deficient.
The President told The Associated Press in an interview on Friday that he had canceled a Belgian-funded lake dredging project, ordered a restudy of a Chinese-financed rail line and decided on a renegotiation of a French-funded port work.
Mr. Aquino has been reviewing infrastructure contracts signed under his predecessor, Gloria Macapagal-Arroyo, whose administration has been accused of corruption.
Notorious practices
He did not accuse anyone involved in the three projects of corruption but said that dredging in particular “is one of the most notorious practices for those who do corrupt practices… so I have a tendency to be allergic to such projects.”
Mr. Aquino canceled the P18.7-billion ($430-million) Belgian project to dredge Laguna Lake, the country’s largest fresh water lake, on the southern edge of Metro Manila.
He said the project was supposed to increase the lake’s water-holding capacity to ease flooding and provide potable water to the sprawling metropolis, but that the plan was to simply move 12 million cubic meters (424 million cubic feet) of silt from one portion of the lake and dump it in another portion over three years.
“That’s where it fell through,” Mr. Aquino said.
Cash transfer program
He said it would be better to spend that money for his administration’s P21-billion ($483-million) conditional cash transfer program to give financial assistance to the poorest 2.3 million Filipino families.
The year-old Aquino administration is fighting graft while wooing foreign investors to partner with the government to boost the economy and fulfill his promise of easing poverty.
“We thank the foreign governments that have been assisting us,” the President said. “We think it is incumbent upon us to be responsible with their kindness in ensuring that these projects are worthwhile.”
Repay loans
Mr. Aquino said he wanted to ensure that such projects would also allow the country to repay its loans to foreign creditors in the long run.
He said a P12-billion ($276-million) French project to build 72 steel roll-on-roll-off ports around the archipelago would be studied because it was overpriced by about 200 percent, and the country could do with just 36 ports.
Mr. Aquino said the project called for building ports in unprotected coves, mostly facing the Pacific Ocean on the country’s east, where most typhoons originate, thereby voiding the warranty stipulated in the contract.
He said he ordered a renegotiation of a rail project linking Manila to the Clark airport complex in the north, financed by a loan from China, principally because of the cost, which had ballooned to more than $1.3 billion.
The President said the existing plan was to have the line carry only passengers, not cargo, and for it to use narrow-gauge rail, which would cost more because such systems were no longer standard and would have to be custom made.
Not accusing anyone
Mr. Aquino, who won last year’s election by a landslide on a strong antipoverty and anticorruption platform, did not directly accuse anyone or the companies involved in the projects of wrongdoing.
However, contracts that have been found to be overpriced and investigated are often found to be tainted with corruption.
After a Senate probe, then President Arroyo was forced to cancel one such contract for the proposed Chinese-financed National Broadband Network project.
Mr. Aquino earlier fired an Arroyo-appointed graft prosecutor for failing to act on complaints under the previous administration. He is expected to name a replacement soon. AP