...the RoRo

GMA’s RoRo source of hope – ADB

 

By BEN R. ROSARIO

May 1, 2011

Manila Bulletin

 

MANILA, philippines -- An Asian Development Bank (ADB) study has cited the roll-on, roll-off (RoRo) project of former President Gloria Macapagal Arroyo as the source of hope for millions of poor Filipinos as lawmakers batted for the continuation of the project, saying it’s among the best options that could address the current economic hardship faced by the country.

The study conducted by the ADB revealed that contrary to claims of critics, the Strong Republic Nautical Highways (RoRo project) has contributed huge dividends for the country’s economy that cannot be ignored by the present government.

Administration congressmen pushed for the approval of a number of measures seeking the establishment of state-of-the-art RoRo ports which have been the focal point of the nautical highways program that former President Gloria Macapagal Arroyo initiated during her term.

Citing the role of RoRo ports in stimulating economic growth and social development, Reps. Nur Jaafar (Lakas-Kampi, Tawi-tawi); Red Durano (NPC, Cebu) and Benhur Salimbangon (NUP, Cebu) sought the approval of various proposals for RoRo ports in various piers in their congressional districts and in other parts of the country.

However, the building of modern RoRo ports has been blocked by critics who have strongly reacted against the steel modular ports technology project proposed by Eiffel, a firm owned by the French government and Matiere SAS.

This, despite the recent release of a Department of Transportation and Communications (DoTC) showing that claims of overpricing could not be substantiated.

Undersecretary Ruben Reinoso, who is in charge of the DoTC’s planning and projects, revealed that based on a committee report prepared by two of its attached agencies, the modular RoRo ports that would further bolster the country’s already improving local shipping transport industry was “not overpriced”, adding that the cost is rea-sonable if compared to other proposals of similar components.

Director General Kunio Senga of the ADB-Southeast Asia Regional Department said that the RoRo program has shown that “there is hope for the millions of poor in archipelagic Southeast Asia.”

“The success of the Strong Republic Nautical Highway in the Philippines, which uses an integrated system of roll-on, roll-off vessels to move people and cargo effectively, has proven to be a source of hope for the millions of poor in the region,” he said.

The study said the Arroyo government’s program that was launched in 2003 can serve as a model for other Southeast Asian countries to follow.

The also noted that aside from boosting the tourism industry and local agriculture, the RoRo technology has had “tremendous impact on many companies through reduced transport costs coupled with efficiency in moving products. Among these firms are Nestle, Big E Food, Gardenia Bakeshop, Kentucky Fried Chicken, and Fast Cargo.

Citing the ADB study, Dr. Patrick Azanza, senior adviser of Eiffel said the DoTC study showed that the contents of the news reports were disowned by Philippine officials in a letter addressed to the resident manager of the French project consortium.

He said the modular RoRo ports project was analyzed and evaluated based on the unbundled unit costs of the project compared with the stan¬dard reinforced concrete RoRo port on steel pipe piles (SPP) and the Spanish modular RoRo ports project previously offered to the Philippine government, which did not materialize.
The financing terms and conditions of the French government COFACE loan for the RoRo project were likewise considered, he said.

Azanza said the French Modular RoRo Port technology had been proven to offer the least cost to the government with a present value (PV) of P148,452,847 rate per one unit of RoRo port.

This claim can be gleaned on the basis of the computed acquisition and follow-on costs derived for each of the RoRo technology, and using the life cycle cost method of analysis to determine the most cost effective and economical model.

Unlike the French model, the RC Concrete Port with SPP generated a computed PV of P152,966,320 while the Spanish Modular RoRo port generated the highest PV at P195,322,133. All PVs reflect a discount at 15 percent interest.

Azanza said the financing package should also be compared, pointing out that the French port was derived based on the cash outflows under the terms and conditions of  the French government COFACE loan provided for the project.

The locally funded cost items such as project administration and the taxes and duties (12 percent value-added tax and three percent import duties) which have been distributed over the three-year project implementation period were like-wise included in the evaluation.