Insurance for private sector initiatives in the Philippines

Private businesses’ own initiatives to develop major infrastructure projects like urban rail transport, power plants, airports and seaports, are very helpful in any economy. It allows the economy to have those vital infrastructure without depleting further public resources, while ensuring that the private investors will make money in the process. A real win-win situation.

Recently, some private sector projects, officially called “Public-Private Partnerships” (PPP) have encountered some legal problems. Like the South Luzon Expressway project where the proponents were barred from adjusting the toll fees upward to recoup the huge costs they put into the project, due to a temporary restraining order (TRO) by some lower courts.

In order to encourage other private investors to pursue some PPP projects, the Philippine government has thought of coming up with an “insurance incentives” to PPPs.

As reported in this news report yesterday, Insurance incentives for PPPs, this should be a good development.

Below are some of the projects that are “ready for rollout or tender”:

  • extension of the Light Rail Transit (LRT) Line 1 to Bacoor, Cavite (P70 billion);
  • extension of the LRT Line 2 to Masinag Junction in Antipolo (P11.299 billion);
  • a new airport in Bohol (P7.543 billion);
  • a “city terminal” for the Diosdado Macapagal International Airport in Pampanga (cost to be determined);
  • privatization of the operation and maintenance contract of the Laguindingan airport in Misamis Oriental (cost to be determined);
  • a new airport in Puerto Princesa (P4.362 billion);
  • an expressway connecting the North and South Luzon tollways (P21 billion);
  • the Cavite Laguna Expressway (P10.5 billion);
  • supply of treated bulk water for Metro Manila (cost to be determined); and
  • a new airport in Daraga, Albay.

We support this new development. And we hope to see more private sector involvement in developing more public infrastructure development in the Philippines.

— by LG

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