Friday, 13 March 2009

Private sector funds 70% of Philippine P100B infra project

NLEx extension to be funded by P100-B stimulus

BusinessWorld
http://www.bworldonline.com/BW031309/content.php?id=005

THE EXTENSION of the North Luzon Expressway (NLEx) to Carmen, Pangasinan has been identified as among the infrastructure projects that will break ground this year as part of a P100-billion government and private sector pump-priming initiative, a Philippine Chamber of Commerce and Industry (PCCI) official yesterday said.

PCCI Chairman Emeritus Donald G. Dee said the project — already approved by the Investment Coordination Committee of the National Economic and Development Authority — will cost P10 billion and will start construction next month.

"And we are very close to an agreement with the land owners [of the lots that will be affected by the expressway]," Mr. Dee told reporters at the sidelines of a meeting between trade negotiators and industry groups.

"More than 70% of the funds will come from the private sector. In this particular project, I think private sector banks will not request for government guarantee [for the loans made by the contractor]" Mr. Dee said.

The Philippine Export Import Credit Agency has been reported to be amenable to guaranteeing 85% of an infrastructure project’s cost. This will hopefully entice commercial banks to fund the pump-priming initiative.

The private sector is aiming to start another project this year, Mr. Dee said, declining to elaborate.

The planned NLEx extension involves 48.7 kilometers and will provide "faster and effective access of agricultural products from the North to the major population centers in Luzon", according to a report from the Universal Access to Competitiveness and Trade (U-ACT) which Mr. Dee chairs.

The Private Infra Dev’t. Corp. consortium was identified as the project proponent. It was awarded the venture in February 2008 after a bidding process, the report stated.

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