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Oct 1, 2017 @ 9:53

Ex-Finance chief Gary Teves opposes hybrid PPP model


The private sector needs to be involved every step of the way.

Former Finance Secretary Margarito “Gary” Teves has opposed the plan of the Duterte administration to push through with a hybrid model for public-private partnership (PPP) projects, wherein the government will build the infrastructure and then bid out its operations and maintenance to businesses.

Teves, who was part of the Arroyo Cabinet before the mass resignation of the Hyatt 10, said private sector involvement should start from the construction phase.

“I would not advise the setup wherein it’s the government first that spends for the project and then the private sector comes in later on for the maintenance. The private sector should be fully involved with the project implementation at the onset,” Teves said during an infrastructure forum organized by the BDO Private Bank.

He added that such a model could lead to higher fares and fees which the public pays to the private operators, which could defeat the government’s purpose originally intended to keep prices down.

“Another problem with big-ticket mass transport projects is they will surely entail huge user fees to recover the costs. The government needs to subsidize it if the rates have to be kept manageable,” the ex-Cabinet man added.

The economic team of the Duterte administration is starting the hybrid PPP model on airport contracts, and is also looking to implement the same on railway lines which will be built between now and 2022.

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