THE HISTORY OF INFRASTRUCTURE DEVELOPMENT IN THE PHIL.

THE HISTORY OF INFRASTRUCTURE DEVELOPMENT IN THE PHIL..

This paper provides a historical account of a number of important policy reforms geared to infrastructure development in the Philippines over the period 1986-2017. It also discusses issues in implementing those reforms. The public infrastructure program spans several sectors, including transport, water, power and energy, and solid-waste management. Since 1986, six political administrations have in succession committed to sustained economic growth and equitable development, currently referred to as inclusive development. In this regard, infrastructure development is a critical task in the Medium-Term Philippine Development Plan (MTPDP) that every administration in the government issues..

Some seventeen years into the new millennium, much progress has been made. But at this juncture, the country still suffers from a wide infrastructure gap. This has not gone unnoticed. For instance, in 2005, the World Bank in the Philippines published a report entitled Philippines: meeting infrastructure challenges. The report was a comprehensive review and underscored the failure of infrastructure development to keep pace with population growth and urbanization. The government acknowledged these inadequacies and high priority was accorded to investment in modernizing the transport system in the MTPDP 2004-2010. That was consistent with the goal of the government to decongest, for instance, Metro Manila and improve access to major tourism destinations all over the country..

While the three political administrations since the publication of the 2005 World Bank report have responded favorably to the issues and concerns of infrastructure development, the latter remains a challenge. That challenge is dictated by economic growth itself, accompanied by rising population and urbanization. A growing population imposes the need to build new roads and to invest in their maintenance. In addition, growth ushered in by technological progress triggers a greater demand for electricity and energy more generally. Sustaining growth also requires the integration of buyers, sellers, traders, and financiers in real time, thereby necessitating further investments in telecommunications and information technology..

This paper is an account of the important policy reforms and institutional arrangements designed to promote infrastructure development. It tries to identify constraints to implementation and suggests measures to overcome them. Several factors lie behind the observed gaps in infrastructure, none of which involves a lack of understanding or want of effort on the part of the government. The MTPDP associated with every president has a chapter on infrastructure development.1 The MTPDP enunciates the main development objectives of the country. Table 1 shows the various presidents since 1986 and the MTPDP associated with each one..

The inter-agency committee responsible for infrastructure development consists of the secretaries and senior officials from key agencies, such as the Departments of Public Works and Highways (DPWH), Transportation (DOTR), and Energy (doe). Participants from the private sector include heads of private organizations, such as the Makati Business Club and the Philippine Chamber of Commerce and Industry. The chairs of federations of non-governmental organizations and civil society groups are also invited to participate in plan formulation..

2. Public and private provision of infrastructure Infrastructure’s contribution to a country’s economic growth and social development is widely understood. As the country gets integrated through roads, bridges, ports, and airports, the buyers, sellers, and other market agents become linked, resulting in mutually beneficial exchanges. Infrastructure supports private production by facilitating the distribution of goods and services. Similarly, it accelerates the industrialization drive of the government. As agricultural productivity is enhanced, supplies of raw materials and intermediate products from agriculture increase, raising the capacity utilization of plants and factories in the cities and other urban areas. Firms in the center get connected to small enterprises in the periphery. Moreover, people residing in the periphery are able to access facilities like schools and health clinics in the center, enhancing social mobility and living standards. Promoting private provision of infrastructure is well advised [Canlas 2006]..

Government spending, however, has to observe a budget constraint. Revenues stem mainly from taxes, particularly, personal and corporate income taxes. The government also levies indirect taxes, such as value-added tax, and excise taxes on some selected commodities like tobacco, cigarettes, and alcoholic beverages. Infrastructure spending is discretionary and competes—with other legitimate public services in health, education, and social security—for budget funds of the government. There is a growing recognition that the government does not have to be the sole provider of infrastructure. There are cases where the pricing of a unit of service from a specific facility is possible, thereby permitting private provision, and easing the tight budget constraint of the government..

2.3. Policymaking Public policy in support of infrastructure development is largely legislated. Tax measures, for example, emanate from Congress. Similarly, private provision of infrastructure calls for legislation. Some projects require a franchise that only Congress has the power to grant. Consider electricity distribution: it is a public utility covered by a franchise. A franchise yields monopoly powers to the holder over a fixed period of time, enabling cost recovery. In addition, private participation in infrastructure is governed by contracts..

2.4. Role of official donors, banks, and creditors Other agents, such as financing agencies handling official development assistance (ODA), along with private banks and creditors, also get involved in policymaking for infrastructure provision. ODA donors, whether bilateral or multilateral, have conditionality practices that are in the nature of structural policy reforms; they become part of policy once the government signs on. The Asian Development Bank and the World Bank are multilateral agencies engaged in infrastructure finance. In designing projects, they often have conditionality practices attached to their ODA loans. For example, a highway project typically has resettlement policy conditions that are human-rights based. ODA funding agencies also attach some loan covenants, say, for water supply and power generation projects. They incorporate performance indicators for reducing nonrevenue losses. Further drawdowns from the loan are contingent on achieving specific targets..

2.4. Role of official donors, banks, and creditors Other agents, such as financing agencies handling official development assistance (ODA), along with private banks and creditors, also get involved in policymaking for infrastructure provision. ODA donors, whether bilateral or multilateral, have conditionality practices that are in the nature of structural policy reforms; they become part of policy once the government signs on. The Asian Development Bank and the World Bank are multilateral agencies engaged in infrastructure finance. In designing projects, they often have conditionality practices attached to their ODA loans. For example, a highway project typically has resettlement policy conditions that are human-rights based. ODA funding agencies also attach some loan covenants, say, for water supply and power generation projects. They incorporate performance indicators for reducing nonrevenue losses. Further drawdowns from the loan are contingent on achieving specific targets..

3. Infrastructure development: a historical-political perspective With the restoration of democratic political institutions under the 1987 Constitution came the urge for policy reforms and new institutional arrangements geared to inclusive growth. In infrastructure, the government, for instance, cannot close the book after building expressways and airports. It must also build secondary roads that link communities to the main highways and airports, as well as roads that connect farms to markets. The enactment of the Local Government Code in 1994, which provides for decentralization, is worth noting..

Upon assuming the presidency in 1986, Mrs. Aquino started mending the shattered fiscal position of the government by introducing a value-added tax to replace the traditional sales tax. Her administration also succeeded in simplifying the personal income tax system. Strengthening the internal tax system is essential in view of the reforms in foreign trade policy anchored on import liberalization and tariff reduction, together with the enactment of the Local Government Code, which provides for internal revenue allotments to local government units (LGUS) at various levels based on a distribution formula..

For long-run measures that impact on infrastructure, the Aquino administration caused the enactment of a Foreign Investments Act, which opened several areas of the economy to 100 percent foreign ownership. The areas where full foreign ownership was not allowed were explicitly enumerated in Negative Lists A, B, and C of the law. The Foreign Investments Act was subsequently amended to open up more areas for a 100 percent foreign ownership. The reforms permitted the entry of advanced managerial techniques and production technology from abroad. Furthermore, foreign savings could be tapped for infrastructure financing..

Mr. Ramos rallied the citizenry around “Philippines 2000”. The basic notion was the willingness of the Philippines to be a part of the increasing globalization and be internationally competitive. The Philippines acceded to the World Trade Organization, and actively participated in the Asia-Pacific Economic Cooperation and in the ASEAN Free Trade Area. Negotiations with Australia and New Zealand, as well as with Western Europe for preferential trading arrangements were also undertaken. In infrastructure, faced with an electric power crisis at the beginning of his term in 1992, he got the Electric Power Crisis Act enacted in Congress, which allowed the entry of private independent power producers, thus paving the way for the eventual dissolution of the monopoly wielded by the National Power Corporation (NPC) over power generation and transmission. This ushered in the privatization of the electric power industry..

To sum up, the wide-ranging policy reforms that the Aquino and Ramos administrations implemented helped the economy recover and gain strength from 1986 to 1997, allowing a marked increase in infrastructure spending by government. Following the completion of the terms of the Aquino and Ramos administrations, hopes were high for a continuation of the reform process. There was a presidential election in 1998, wherein Mr. Estrada emerged as winner. However, in January 2001, these hopes were dashed as the then president, with less than three years in office, was ousted, having been involved in an illegal numbers game. Mrs. Arroyo, then vice president, took over, rekindling some hopes that the infrastructure-related reforms that started in the late 1980s would get back on track and deliver good results..

The international economic environment did not inspire confidence at the time Mrs. Arroyo assumed the presidency. The information technology sector had experienced a shakedown in the US and in the developed countries in Western Europe; that meant a slowdown in the exports of electronics and computer parts, products that accounted for a major proportion of the country’s manufactured exports. The shock of 9/11 in 2001 intervened, threatening a further slowdown of the economy. Later on, a public health shock in the form of the severe acute respiratory syndrome hit some countries in East and Southeast Asia, which adversely affected travel and tourism, again with adverse effects on economic growth in the country..

EPIRA was initially fled in Congress during the Ramos administration; it was finally enacted after being bottled up in Congress for about 11 years, or nearly four congresses. Success in getting the EPIRA law enacted during the first year of the Arroyo administration inspired confidence about her commitment to structural policy reforms. Implementation of EPIRA, however, was very much delayed, particularly the auctioning through competitive bidding of the power generation plants eligible for privatization. That raised doubts about her administration’s commitment to reforms..

Mrs. Arroyo was re-elected president in 2004. Infrastructure development was still a major challenge. The infrastructure plan, however, suffered a setback after she caused the voiding of a government contract with a private consortium that had built Terminal 3 of the Ninoy Aquino International Airport. Under her leadership, the government fled a case with the Supreme Court seeking nullification of that contract. The government won the case. But it was not costless. The court ordered the government to pay the consortium just compensation for the structure it had built. In addition, the commitment of the government to the principle of sanctity of contracts was dented, with dampening effects on foreign direct investments..

For the North Rail project, the Philippine government obtained a loan from China. The project was far from finished even if the Philippines had drawn down the full value of the loan. After the presidential election of 2010, which Benigno Aquino III won, the project was cancelled. China forthwith asked the Philippines to repay the loan immediately, invoking the government guarantees the Philippines had extended to the project. The economy recovered in 2001 and gained strength up to 2007. In 2008, the global financial crisis, triggered by the collapse of the sub-prime housing loan market in the US, broke out. That crisis caused a worldwide economic slowdown and recessions in many developed industrial countries. Philippine growth was fat in 2008, which the Arroyo administration tried to counter with a fiscal stimulus plan in 2009. The budget deficit as a ratio of GDP ballooned to 3.9 percent, and a fiscal crisis loomed. To forestall such a crisis, the reformed value-added tax law was enacted. The law raised the tax rate from 10 percent to 12 percent..

In any event, the payoffs from good governance seem evident. Real GDP growth averaged about seven percent in the first two years under the Aquino II administration. In 2014, despite a spate of natural disasters, real GDP growth averaged six percent. In the annual report of the World Economic Forum entitled Global competitiveness report 2014-2015, the Philippines ranked 52nd out of 144 economies, compared to 59th out of 144 economies in the previous year. The report highlighted the fact that the Philippines had leapfrogged in the fight against corruption since 2010, one of the measures of international competitiveness. Furthermore, sovereign debt gained investment grade in 2013. The government budget constraint eased as the risk premium on sovereign debt declined. Debt servicing of the government decreased as a result..

4. Legislation for infrastructure development The body of legislation that Congress has enacted in support of infrastructure development includes specific tax measures and private participation through Build-Operate-Transfer (bot) and its variants. The economic rationale for tax reform emanates from traditional principles of public finance. The first principle is in pursuit of efficiency. A simple tax system is preferred to facilitate collection. If the tax structure is cumbersome, it opens up opportunities for evasion. The wealthy hire accountants and are able to reduce their tax burden considerably..

Discussion of tax measures generally brings up issues of equity, whether vertical or horizontal. Vertical equity refers to how people in different income groups should be taxed. The tax measure is often based on ability to pay, resulting in progressive tax rates. That is, marginal tax rates tend to increase as income increases. Horizontal equality is well understood. Similarly situated individuals are subjected to the same marginal tax rate..

In addition to specific tax measures, to help ease the budget constraint for infrastructure projects, the government looks to private provision as a complementary measure. In 1989, Congress enacted Republic Act 6957, popularly referred to as the bot Law. This law was amended in 1993 by Republic Act 7718, which expanded the opportunities for implementing bot-type projects. The amended bot law has since become the legal framework for private provision of public infrastructure projects..

Furthermore, Republic Act 9184 gathered in one place the procurement activities of the government. The law is described as the “Government Procurement Reform Act”, an act providing for the modernization and regulation mainly of the procurement activities of the government. It adheres to transparency and competitiveness, among other principles of good governance. The law seeks to eliminate ambiguity and loopholes in government procurement of goods and services and minimize corruption, but it has not been fully successful in this regard..

One capacity that implementing agencies have to develop is contract writing. Ambiguous contract provisions can lead to contractual disputes that delay implementation. A contractual dispute opens up opportunities for the court system to intervene, which can be a lengthy process. To avoid court proceedings, contracting parties insert arbitration provisions. But this is usually a very expensive process; fees paid to arbitrators are high and quite burdensome to governments of low- to middle-income countries. With a legal framework and policies in place, the executive branch formulates the institutional arrangements for implementation, along with the procedures for screening and approving projects. The respective roles of the NEDA Board (NB), NEDA Secretariat (ns), and the NB inter-agency committees are critical with regard to choosing project priorities, screening and approval..

In 1987, Pres. Corazon Aquino reorganized the NEDA through Executive Order 230, also known as “The Reorganization Act of the National Economic and Development Authority”. This executive order mandated NEDA to be the coordinating body for economic and social policies. Under martial law, the Office of the President exercised much of the decision making on socio-economic policies, with minimal delegation of authority to national government agencies. The NEDA reorganization in 1987 was designed to strengthen the various NB inter-agency committees, and raise the capacity of the ns to undertake technical analysis in aid of decision-making at the level of the NB committees. Moreover, it was to end the monopoly of the Office of the President over policymaking and systematize project evaluation, a task that was assigned to the ns..

The socio-economic report of the president is a monitoring device; it is published annually, tracking annual performance in relation to the targets spelled out in the MTPDP. In case actual figures show performance lagging behind targets, mid-term corrections are introduced to try to get the economy back on track. The ns coordinates various policies of the national government aimed at ensuring that short-run macroeconomic policies do not compromise long-run growth objectives..

5.2. The Investment Coordination Committee The ICC is another important inter-agency committee of the NB. Its main task is to coordinate fiscal, monetary, and exchange-rate policies of the government and to prevent debt crises similar to what hit the Philippines in 1983 when it defaulted on its foreign debt. The Department of Finance chairs the ICC cabinet committee, with a technical board headed by an ns undersecretary. The public investment staff in the ns provides secretariat support to the ICC. A major task of the ICC is to evaluate large capital projects of the government such as infrastructure projects. Projects subject to ICC review are those costing at least us$5 million. All foreign-assisted projects are subject to ICC review. The objective of an ICC review is to ensure that public projects are socially efficient. Implementing agencies of the government, such as the DPWH and doe, submit their major projects to the ns for review. Having done the project evaluation, including cost-benefit analyses and feasibility studies, the task of the ICC is to confirm the technical studies that the implementing agencies submit to the ns..

In many instances, the national government at various levels is expected to provide infrastructure in several sectors, including, transport, telecommunication, and electric power. With devolution, the LGUS take care of secondary and rural roads. The DOTR devolves municipal ports to LGUS. Electric power generation and distribution is privately provided. The NPC is responsible only for small power generating units. Recognizing that private provision is a genuine option, the government has enacted a bot Law as an incentive to the private sector to participate in the infrastructure program of the government. bot projects are covered by contracts that spell out the period of cooperation between the government and the private partners. During the period of cooperation, private investors are expected to recover the amount they invested with normal profits. At the end of the cooperation period, the facilities are turned over to the government..

The NEDA director-general is the chair of the INFRACOM. A technical board also assists it. The infrastructure staff of the ns provides secretariat support. The secretaries of doe, DPWH, and DOTR are represented in the INFRACOM. All bot projects, meanwhile, are to be subjected to ICC review and approval process. While policies in support of infrastructure development have moved forward significantly, one form of risk continues to pester. All infrastructure projects, whether by bot or its variant, are covered by contracts. In this regard, contractual disputes may arise, bringing the courts into the process. Several integrity-related questions have been raised about the courts. To this day, there is lingering doubt about the fairness of the judicial process designed to adjudicate contractual disputes..

5.4. Setting project priorities With government revenues posing a binding constraint on choice of infrastructure projects to implement, a system of prioritization is vital. In reviewing a project for possible implementation, the first question the ICC asks the implementing agency pertains to the development rationale for the project. In other words, what social objective stipulated in the MTPDP is being served? For example, a road project may be in the service of “decongesting Metro Manila”, a major output in the performance contract with government of cooperating agencies like the DPWH and DOTR..

Lastly, the ICC asks whether the agency has accommodated the proposed project in its budget ceiling. The last query determines whether the project gets into the National Expenditure Plan, which is the annual spending portion of the General Appropriations Act that Congress enacts. The General Appropriations Act governs the spending and disbursements of all agencies under the direction of the DBM, and it also states the revenue program of the government. If expenditures exceed revenues, the General Appropriations Act spells out the financing of the resulting deficit, typically through national treasury borrowings from the public, whether domestic or foreign..

The infrastructure program covers several sectors and sub-sectors, such as transport, which includes land, sea, and air. One other sector is energy and power, a major program in which is the development of natural gas, following the successful implementation of the Malampaya deep water gas-to-power project. Another key sector is water resource development, with sub-sectors that cover water supply, sewerage, and sanitation, irrigation, and food control..

In view of rapid urbanization, the government places high priority on transport that addresses urbanization concerns. For instance, in the major urban areas of Manila, Cebu, and Davao, traffic congestion continues to irk motorists. Traffic jams mean foregone productivity and earnings. Hence, in urban areas, particularly, Metro Manila, rail gets priority over road transport. Rail beats road in moving people in bulk. And so in Metro Manila, part of the plan is to complete the light railway transit lines..

6.2. Water transport Water transport, however, is nothing to sneeze at. The Philippines is an archipelagic country. The government encourages private operators of inter-island vessels to re-fleet in line with quality improvements. Re-fleeting is a private sector undertaking. One incentive is to put up relending facilities in government banks for lending to the private sector engaged in feet improvement. Under this scheme, the government taps oda funds, courses the funds to a government financial institution, such as the Land Bank and the Development Bank of the Philippines, which relend through participating banks that retail the loans to private operators of inter-island vessels..

6.3. Energy projects The MTPDP 2001-2004 emphasized self-reliance, that is, increasing the share of indigenous fuel and renewable energy sources. The task included enacting relevant laws, which occurred in the middle of the 2000s. The Biofuel Act and the Renewable Energy Act were enacted. Price support to renewable energy sources, such as wind and solar, was to be achieved through feed-in tariffs intended to hold over a definite period of time. Feed-in tariffs are designed for cost recovery with normal profits. Concern about the high cost of electricity in the Philippines compared to those in many of the East and Southeast Asian countries gave priority to energy projects that would reduce the generation and transmission costs. For energy, the doe is in charge of projects..

6.4. Water resources A priority sub-sector is water supply, sewerage, and sanitation. The focus areas are Metro Manila and provincial areas, whether rural or urban. In Metro Manila, which is served mainly by the Metropolitan Waterworks and Sewerage System (MWSS), the task is to institute policy refinements that ensure smooth implementation of the privatization of water supply that was won by two private concessionaires: Maynilad Water and Manila Water. Meanwhile, the government continues to support development of water basins, such as the Laguna Lake Development Authority, that would serve Metro Manila. In irrigation, priority was to be given to projects that promote the goals of the Agriculture and Fisheries Modernization Act. The emphasis on inclusive growth, growth whose benefits are within reach of every Filipino, has put irrigation projects in the front burner..

6.5. Rate of return criteria for implementation The rate of return on an infrastructure project serves as a guide in determining whether the project is to be implemented by the government or tendered to the private sector. If the social rate of return exceeds the private rate of return, then the government takes the lead for the project. But in the opposite case, a bot or its variant may be tapped. The private sector normally invests only up to the private rate of return, that is, what it is able to capture. If the social rate of return is higher than the private rate of return, then underinvestment is likely, since the private sector is not compensated for benefits that the rest of society captures. The ICC thus requires the implementing agency to estimate both private and social rates of return of a proposed project. The icc secretariat exercises oversight by ascertaining that the methodology used by the proponent agency in estimating these rates of return is proper..

6.7. Other criteria for project approval In addition to project evaluation and cost-benefit analysis that yield private and social rates of return and cost-benefit ratios, the ICC also asks for a Certificate of Social Acceptability, an endorsement from the Regional Development Council, and an Environmental Compliance Certificate from the Department of Environment and Natural Resources. A major implementation risk is the presence of informal settlers or indigenous peoples on project sites. The Certificate of Social Acceptability seeks to find out whether there are right-of-way issues that may delay implementation. Once time overruns occur, cost overruns are bound to follow. The latter could delay project implementation in so far as the implementing agency needs to go back to the ICC for the authority to get some supplemental budget..

6.8. Private provision BOT infrastructure projects, whether solicited or not, are evaluated by the ICC. Clearly, the private rate of return must be high enough to exceed its weighted average cost of capital. Otherwise, the private sector will not be interested. The private proponent may ask for some government undertaking, say, the civil works for a rail project. The Department of Finance looks at this request and must approve it. If the project is solicited, then it is subjected to competitive bidding. Once the winning bidder is issued a notice-to-proceed, it has to seek financial closure with its creditors. Once this is achieved, then implementation begins..

7. Evaluation and monitoring This section discusses the outcomes of some projects that illustrate some of the difficult challenges encountered with the policy reforms for infrastructure development. Most of the problems encountered are related to private participation. The downside is that expected outputs and benefits from the project are not realized within the time frame envisioned for the completion of the project..

7.1. Monitoring infrastructure projects One of the major tasks of the NEDA is project monitoring, including financial disbursements and physical accomplishments. In this task, the project monitoring staff of the ns is the lead. It works closely with the NEDA regional offices in monitoring outcomes of projects. The NEDA regional offices are secretariat to the Regional Development Councils, which consist of local government executives. In this connection, the ns has been getting a lot of support from ODA donors since 2005, after donor and client countries acceded to the Paris Declaration for Aid Effectiveness. The latter stresses country ownership and mutual accountability, among other principles, for foreign aid-assisted projects, infrastructure and otherwise..

The problem that the two concessionaires faced was an external one—the Asian financial crisis. With government help, through a reopening of the contracts with concessionaires, Manila Water was able to overcome the challenge. The new owners of Maynilad at this point seem to be doing well financially, too. The financial crisis hampered the capital improvements and delayed realization of the benefits to stakeholders. Nonetheless, the problem of limited service coverage has been solved. Most areas in Metro Manila are now getting 24-hour coverage, to the satisfaction of clients, both households and business enterprises. The MWSS, meanwhile, is no longer engaged in water supply provision. It is mainly an oversight body monitoring the two concessionaires and setting standards for the service. It also supervises the regulatory agency that has been established after privatization. It leads in the conduct of rate rebasing, which is done every five years as stipulated in the concessionaires’ agreements..

On July 31, 2014, the Aquino II administration was able to convince major airlines like Delta, Cathay, and Singapore Air to finally transfer to Terminal 3. It is hoped that the Terminal 3 case is finally over, and the expected full benefits to stakeholders would finally be realized after a delay of about 17 years. The risk in this case was a judicial one. The voiding of PIATCO’S contract delayed the project unduly with profound losses to the government..

EPIRA has succeeded in Luzon. The benefits, however, for Mindanao are still to be realized. Mindanao was exempted temporarily from EPIRA. The NPC continues to run large hydroelectric power plants there. Maintenance of the hydroelectric plants is, however, costly; the NPC as a result has not been able to maintain these power plants properly. Mindanao continues to experience brownouts nowadays. The risk to electric power supply in Luzon emanates from the delays in adding generating capacity on account of protests from environmental groups, not to mention the judicial risk. In Mindanao, stakeholders must realize that cheap electricity from hydropower is not permanent. They must accept the fact that additional generating capacity from new power plants like coal-fired ones will end their brownout problems, provided they are willing to pay more for electricity than what they are paying now..

7.6. NEDA and project monitoring The NEDA as the dialogue partner of ODA donors conducts an annual monitoring and review of ODA-funded projects. The review identifies problems that tend to delay implementation. Road projects, for instance, often encounter right-of-way problems. In addition, during times of tight budgetary constraints, the DBM is not able to raise the budget ceiling of infrastructure agencies to be able to accommodate all ODA-funded projects. Furthermore, ancestral domain issues often delay projects like reforestation..

8. Concluding remarks Policy reforms for infrastructure development in the Philippines have been evolving since 1986. The political administrations have in succession underscored the importance of infrastructure development in the MTPDP. Important progress has been made, but the infrastructure gap, especially in transport, is a formidable challenge. The capacity of many implementing agencies must be raised constantly over every stage of the project cycle. The legal and judicial framework needs to be revisited to minimize the risks in this regard..