Manila. Philippine President Benigno Aquino III is canceling or reconsidering foreign-funded infrastructure projects valued at $2 billion, saying that although his country badly needs improvements, the contracts are overpriced and technically deficient.
He said on Friday that he had canceled a Belgian-funded lake dredging project and ordered a restudy of a Chinese-financed rail line and renegotiation of French-funded port work.
Aquino has been reviewing infrastructure contracts signed under his predecessor, Gloria Macapagal Arroyo, whose administration has been accused of corruption.
He did not accuse anyone involved in the three projects of corruption but said dredging in particular “is one of the most notorious practices for those who do corrupt practices … so I have a tendency to be allergic to such projects.”
Aquino canceled the 18.7 billion peso ($430 million) Belgian project to dredge Laguna Lake, the country’s largest freshwater lake, on the edge of Manila.
He said the project was supposed to increase the lake’s water-holding capacity to ease flooding and provide potable water to the sprawling metropolis, but that the plan was to simply move 12 million cubic meters of silt from one portion of the lake and dump it on another portion over three years.
“That’s where it fell through,” Aquino said.
He said it would be better to spend that money for his government’s 21 billion peso program to give financial assistance to the poorest 2.3 million Filipino families.
Aquino’s year-old administration is fighting graft while wooing foreign investors to partner with his government to boost the economy and fulfill his promise of easing poverty.
“We thank the foreign governments that have been assisting us,” he said. “We think it is incumbent upon us to be responsible with their kindness in ensuring that these projects are worthwhile.”
He said he wanted to ensure that such projects would also allow the country to repay its loans to creditors in the long run.
He said a 12 billion peso French project to build 72 steel roll-on-roll-off ports around the archipelago would be studied because it was overpriced by about 200 percent, and the country could do with just 36 ports.
He said he ordered renegotiation of a rail project linking Manila to a northern airport complex, financed by a loan from China, principally because of the cost, which has ballooned to over $1.3 billion.
He said the existing plan is to have the line carry only passengers, no cargo, and for it to use narrow-gauge rail, which would cost more because such systems would have to be custom-made.
However, contracts that have been found to be overpriced are often found to be tainted with corruption. After a Senate probe, Arroyo was forced to cancel one such contract, for a Chinese-financed national broadband network.
Aquino, who won last year’s election by a landslide on an anti-poverty and anti-corruption platform, ousted the Arroyo-appointed graft prosecutor for failing to act on complaints under the previous administration. He is expected to name a replacement soon.