Foreign construction players feel brunt of infra corruption mess
‘What we see now is that 24 to 30 percent of a project is being siphoned off. That also plays into why the cost of doing business is so high in the Philippines.’
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‘What we see now is that 24 to 30 percent of a project is being siphoned off. That also plays into why the cost of doing business is so high in the Philippines.’
It is not only the local players in the construction industry that are affected by the ongoing hold on government infrastructure projects due to the flood control infrastructure corruption mess, but also foreign players.
The European Chamber of Commerce of the Philippines have disclosed that its members involved in the local construction industry are also being affected negatively as their revenues are also going down.
“Indirectly, yes, they are affected, as some of them are active in the construction industry, producing materials that are being used on infrastructure projects. And because some projects are put on hold, they are now experiencing a reduction in sales that might go on for the next couple of months,” said Florian Gottein, executive director of the ECCP, in an ambush interview at the sidelines of the Arangkada Philippines Investment Forum at the Marriott Hotel, Pasay City, on Thursday.
New names of lawmakers
During the Senate Blue Ribbon Committee hearing held also on Thursday, new names of lawmakers were revealed by Former Department of Public Works and Highways (DPWH) Undersecretary Roberto Bernardo.
Bernardo, who allegedly benefited from ghost and/or substandard flood control projects, receiving multi-million kickbacks, named former Senators Nancy Binay, Sonny Angara, and former Senate President Francis Chiz Escudero.
The three dropped names vehemently denied the allegations.
Existing investors unhappy
Meanwhile, Gottein said that those who are unhappy with the turn of events are mostly European companies that have existing involvement in the government infrastructure projects here.
“But most of our members are not involved in government projects. So those that are still contemplating expanding their business, I think there (the controversy) has no direct impact at the moment. But we have seen some countries have made statements when it comes to ODAs (official development assistance). Some countries are now more careful in deciding or pursuing ODA financing. But it should be handled by some respective ambassadors and the Department of Foreign Affairs,” he said.
ODA suspension
Last month, South Korean President Lee Jae-myung announced the suspension of the P28-billion ODA for the Philippines due to corruption concerns, which was later denied by the Department of Finance, saying there is no such loan.
Aside from corruption, the ECCP official said what affects its members is the ease of doing business in the country.
“We have a beautiful Ease of Doing Business Law, and I think many of our members are struggling with the proper enforcement, implementation, and the lack of ease of doing business,” he stressed.
Aside from ease of doing business, Gottein said the cost of doing business in the country remains way higher in the Philippines compared to other countries.
“Because you know, it’s not okay for us that when you enter government projects, there are kickbacks. What we see now is that 24 to 30 percent of a project is being siphoned off. That also plays into why the cost of doing business is so high in the Philippines,” he said.
Critical role
He underlined that the government and its agencies indeed play a critical role in how to resolve the situation, or digging into the matter by means of thorough investigation, especially now that the Philippines is dealing with the European Commission for an EU Free Trade Agreement.
“We also hope that we see safeguards in place that will prevent similar situations from happening again in the future. Obviously, the private sector is not happy with what they are seeing where citizens’ tax money is not used for such projects. I think nobody is happy with the situation. Everybody is expecting that it will be investigated in a fast and thorough manner,” according to Gottein.
