Probably inspired by the closure of ABS-CBN through his allies in Congress, President Duterte warned telecommunication firms Globe Telecom and Smart Communications of the same fate if they would not “shape up” by December.
And right on cue, Senate President Tito Sotto, an administration ally, says that the move is possible on “firms that fail to deliver quality service to the public.”
Duterte shouldn’t look far. The culprit is right in his backyard—local government units (LGUs) and government agencies that are making it difficult, not only for these two telecom firms, but for all businesses that have infrastructure components, which have reached a dead-end with their right-of-way (ROW) and other “stringent” government requirements.
As I have written in this space time and again, these two firms have been practically begging the government to help them fast track the rollout of their much-needed infrastructure, particularly the erection of cell sites. The red tape that they have had to endure is costing them expensive delays in man-hours and money spent.
Sotto says that this has already been remedied through a law which “practically removed red tape already.” Perhaps he should get his butt off his swivel chair to see for himself how some enterprising government officials are putting a stranglehold on the completion of vital infrastructure projects.
A good friend and a major player in cell site construction—whose company has built almost all the tower requirements of both Globe and Philippine Long Distance Telephone, and has also done business overseas—told BusinessWisethat, without red tape, it only takes two years for a single tower to be put up. But in the Philippines, where bureaucratic red tape rules, it takes forever. He says prolonged license tenders and corruption in local government weigh down the rollout of essential infrastructure that will improve nationwide Internet connectivity.
The country’s Internet delivery remains at a snail’s pace, thanks to the ridiculous expanse of certifications and prolonged time it takes for LGUs to approve them. Compared with other countries where digital processing takes only a day without obstruction, it takes at least 24 stages and close to a hundred days just to secure a construction permit, my friend says. “More often than not, it will [be] 10 times slower because of corruption and inefficiency,” he adds.
He also claims that most of the charges local governments levy are unjustified. “Just to give you an example: local government charges P200,000 per year on a single tower.” There are other permits and requirements, such as for environmental impact and the concern in building cell sites in protected areas, etc. The gamut of requirements will need more than three times the space allotted for this column to be
discussed.
Perhaps, this is also the problem being encountered by Dito Telecom, the third telecom company co-owned by Davao billionaire Dennis Uy and China Telecoms. To date Dito has only built 300 out of the 1,300 cell sites that it vowed to complete by November this year. I seriously doubt that Dito could deliver. November is its target “technical launch” to gauge its capability to provide 37 percent of the country’s connectivity need at the speed of 27mbps. If it meets the November target, it is hoping to start commercial operations by March 2021.
It is not only in telecoms where such costly delays occur. Australian-based Energy World Corp. (EWC), in its recent quarterly report to shareholders in Australia, reveals that it is still in discussion with its land acquisition for the ROW, and that the Department of Energy has set the completion of its Liquefied Natural Gas (LNG) substation, which is crucial to its commercial operations only on January 2022, a year-long delay.
The country is damned lucky to have a foreign investor as patient as EWC. The $750 million LNG Pagbilao, Quezon project, which started in 2011, is still on track despite frustrating delays caused by government agencies tasked to see the project through.
The Senate energy committee two years ago instructed the DOE, the Energy Regulatory Commission, and National Grid Corporation of the Philippines to assist EWC in ensuring that the LNG power plant would be able to start operations as soon as possible. The request fell on deaf ears, despite EWC’s full compliance with all government regulations and requirements.
Former Quezon Gov. Eduardo Rodriguez, on whose property the LNG Pagbilao project partly nestles, told BusinessWisethat EWC will no longer push for the connection of the project to the existing grid. Instead, the company will pursue building its own. EWC has been in talks to finalize loan arrangements with various banks to build a 14-kilometer grid. He also said that, while the grid is being constructed, the company would hopefully be able to finally finish the first LNG Hub Terminal within the year set by the DOE.
EWC is developing the first LNG Hub Terminal with full containment and onshore LNG tanks with pumpable capacity of 130,000 cubic meters of LNG each. The plant also consists of a dedicated jetty and marine infrastructure for the loading and unloading of LNG ships, as well as regasification, control center and workshops, and other ancillary facilities.
EWC, Rodriguez says, remains committed given the roadblocks it has had to hurdle through the years; the same predicament the two telecom companies face and are still targeted for expropriation by the Duterte government for a problem the government itself caused and is inutile in solving.
