CLARK FIELD — The government should straighten up and adopt a long-range policy on jeepneys. Do we want to keep these atrocious, anachronistic anomalies as the main mode of mass transportation in Metro Manila?

It seems that in its confused state, the Arroyo administration is taking the line of least resistance by assuming that jeepneys will be or should be around for at least one more generation, or 25 years.

The government should muster the political will to phase out these relics of World War II instead of falling hostage to their bluff and bluster. Jeepneys should be phased out and replaced with vehicles that will fill the modern needs of urban Filipinos.

However progressive we become, if jeepneys keep rolling in the nation’s capital, the Philippines will never be able to project a favorable image and move up from the cellar of comparative advantage.

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BCDA SIDE: Remember my Postscript (June 15, 2008) asking why the P27-billion Subic-Clark-Tarlac Expressway that is supposed to serve this vital industrial-tourism complex does not have an entrance-exit interchange here?
 
Our informants said three interchanges, one of them in Clark, were dropped after a big chunk of the money was snitched by well-connected operators who thrive on commissions. Now the government wants to borrow more billions to put back the interchanges!

That is one version. Another explanation was given us by Gen. Narciso L. Abaya (ret.), president and chief executive of the Bases Conversion Development Authority, who inherited the project from his predecessor as the expressway was being built.

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CHANGING ESTIMATES: Giving us a chronology of changes in project costs, Abaya said:

The project comprises the construction, operation and maintenance of the 93.77-kilometer SCTEx.  The NEDA-ICC approved the project on Oct. 21, 1999, at a cost of P15.247 billion.

In April 2000, the BCDA submitted an updated implementation program seeking approval for a 22.9-percent increase in project cost to P18.74 billion, because of changes in design and scope, based on the appraisal of the Japan Bank for International Cooperation, which is lending the money. The NEDA-ICC approved the request one year later.

In 2002 and 2003, detailed design and engineering work were performed by BCDA consultants. The JBIC conducted implementation review meetings with BCDA and NEDA. The NEDA monitoring staff met with their BCDA counterparts.

From September 2003 to January 2004, the BCDA conducted tenders for Package 1 (Subic-Clark section) and Package 2 (Clark-Tarlac section). By that time, the peso depreciation and drastic increases in the prices of construction materials (such as cement, steel and asphalt) had increased the estimated cost of civil works from P14.926 billion to P22.514 billion (51 percent).

In addition, design changes owing to site conditions and other factors added P2.596 billion to the estimated construction cost (17 percent), bringing the total to P25.11 billion.

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NEGOTIATED DEAL: Although the estimated construction cost had risen to P25.11 billion, the BCDA bid out the project at an Approved Budget for Contract (ABC) of P20.078 billion, equivalent to the loan proceeds for civil works provided by the JBIC.

This was done, Abaya said, on the premise that competition might cause the bidders to submit proposals closer to the ABC than the (higher) estimated construction cost.

The lowest bids, however, amounted to P27.013 billion, exceeding the ABC by P6.938 billion (35 percent) and the estimated construction cost by P1.903 billion (8 percent).

Under JBIC procurement guidelines, the BCDA had the option to either call for rebid, or to negotiate.

The BCDA chose to negotiate and to reduce the scope of civil works, which meant reducing the number of interchanges from 11 to eight. The Floridablanca, Porac and Friendship interchanges in Clark were dropped.

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YEN-PESO EFFECT: After scoping out some civil works, the BCDA estimated that the two contract packages would amount to around P22.078 billion. However NEDA-ICC set a lower ABC at P21 billion which was the peso equivalent of the JBIC loan at that time amounting to Yen41.9 billion, at an exchange rate of Yen1.96=P1.

In March 2005, after negotiations, the BCDA signed the contract with Kajima-Obayashi-JFE and Mitsubishi (KOJM) Joint Venture  (Package 1), and with Hazama-Taisei-Nippon Steel (HTN) Joint Venture (Package 2) at P20.969 billion at an exchange rate of Yen1.96=P1.

Abaya said the strengthening of the peso would reduce the actual project cost (civil works) of P20.969 billion. At Yen 2.50=P1, he said this project cost in pesos will be reduced to P18.145 billion, resulting in savings of P600 million.

Anyway, the contract provides for price escalation, which he said is estimated at P3.891 million for a total of P21.436 billion.

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P27.123-B COST: Abaya said that three additional interchanges and access roads will cost an additional P1.1 billion for a total direct cost (civil works) of P22.436 billion.

In addition to the direct cost, there are indirect costs (consultancy services, land acquisition and project management expenses) amounting to P3.340 billion and financing costs (such as interest during construction and finance department guaranty fee) of P1.230 billion — for a total project cost of P27.123 billion.

Of this total project cost, P18.099 billion will be financed from the JBIC original loan and P4.157 billion from a term loan (from local commercial banks). This leaves P4.867 billion to be financed from the P6.5-billion JBIC supplemental loan.

Now that the BCDA has laid down the figures, critics can probe deeper into the ever-growing costs of the unfinished SCTEx.