Interview with Cosette Canilao

Cosette Canilao is the president and CEO of Aboitiz InfraCapital since October 2018. Before, she worked with the Philippine government and was the head of the PPP Centre at the time of a project that put the Philippines on the map with a progressive mobility system.

Meet Cosette, a woman on a mission and with a vision!

—

Looking at innovation in infrastructure in general, what do you think governments and society should focus on the next 5 years? Do you see any clear trends? 

“With the accelerated digitalisation of the country, I think more investments should go into that space so that it can enable innovation in transport and mobility, and other sectors. PPP is a good way to enable innovation in providing public service. The government should not be afraid of it and should encourage it. There is this fear that the private sector is only out to make money and I do not think that this is the right mindset. The PPP Center was created to enable government agencies to hire the right transaction advisors that can assist in ensuring that projects are properly prepared, and contracts are fair. 

The motivation of the private sector to finish projects on time and at the right costs is linked to the bottom line of the business. The government can actually learn from the private sector in terms of efficiency. A well crafted contract that will govern the relationship between the government and the private sector is crucial to achieve the objectives and aspirations of the project. ” 

What are the key elements for success when it comes to improving infrastructure?

“Having the enabling environment, the right policies, and more transparent rules and processes from the government. The government has a leading role in this.”

One of the sustainable development goals of the UN is: build resilient infrastructure, promote sustainable industrialisation and foster innovation. How do you think governments should foster innovation?

“I go back to asking the private sector to help the government achieve it. Especially here in the Philippines, because there are very strict checks and balances in government processes that do not create an enabling environment for innovation. Bureaucracy stifles innovation. The private sector needs to collaborate with the government in building resilient, sustainable and innovative infrastructure through PPPs. I believe we made really good progress in policy making and in creating an enabling environment for PPPs. My expectation: future administration to build on it. Continue the momentum; it is still there!”

You were the head of the PPP Centre of the Philippines at the time of the project. What was the vision behind the project? 

“The aim was to seamlessly connect the ticketing system of three different public transportation lines in Manilla and improve and ease the passenger experience by shortening the queueing time for the rail lines and selected bus routes. Even as early as then, we saw the project as a catalyst to digitalisation via e-payments, which was quite exciting.” 

How did the ticketing project fit into that vision?

“This specific project is part of a bigger plan in improving the mobility ecosystem in the Philippines. The introduction to e-commerce via the digital e-payments/loading is an aspect of the project that I really like as aside from improving passenger experience, it also opens up other digital payment functions. Improving the ticketing system, while a smaller solution to the mass transit infrastructure gap in the Philippines, plays an important role within the mobility ecosystem; it is an important piece of the puzzle to ease the burden of commuters in the country.”

How was the PPP Centre involved in the project? 

“We co-developed the business concept for this project together with the transport agency, and through the Project Development and Monitoring Facility – which the PPP Centre manages up until now – Rebel was hired as transaction advisor. We also assisted the transport agency in vetting the output of the Rebel Group and in structuring the deal. Also, the PPP Centre facilitated and assisted the Department of Transport in securing various government approvals. The PPP Centre also assisted in marketing the deal and at the same time in the bidding and the evaluation processes.”

The main goal of the project was to introduce a new integrated system for three rail lines and selected bus routes. What was the response of the public? 

“I believe the end-users highly appreciated it. The queueing time in the different ticketing stations and at the turnstiles were reduced dramatically. Nowadays, passengers can seamlessly buy and use the same card for the different lines. And during this pandemic, the safety protocols around COVID-19 highlights the usefulness of e-payments. I hope this will expedite the rollout of the ticketing system to buses and other transport systems, as part of the digital transformation of the transport sector. “

Did you do anything specific to warm them up to the new concept?

“Part of the PPP Centre’s role was to do market sounding and stakeholder consultations, not only with the various government agencies and investors but also with the  end users. The commuting situation was so bad that most welcomed the proposed solution.”

So they were open to change?

“At the time, most could not see or imagine how the mobility system could be improved, but once it became operational, the people felt the positive impact of the project.”

What other challenges did you face while implementing the new system?

“The first challenge was actually that the transport agency  had never done a project like this, that’s why we appointed the Rebel Group to help, and then it took about a year for the project to start. 

Another challenge came up when we had to disqualify two of the seven pre-qualified bidders based on the business plans submitted to us that did not meet the technical requirements, which was a big decision to make. An even bigger challenge came up after the execution of the project was awarded. DOTC was delayed in setting up its project office which was essential to the execution. But fortunately the project was delivered on time because the private sector had a huge commercial incentive to deliver; the system is still working very well.”

Which role did the Rebel play in tackling these challenges?

“We collaborated a lot with the Rebel in sorting out the challenges we encountered and in overcoming them. They supported us all the way, even during implementation. Rebel was pretty much hands on and provided the needed support to ensure the success of the project.”

As a result of this project, ticketing has become a revenue to the government instead of a cost. What has the positive societal impact been so far? 

While the project was smaller compared to other transport projects we rolled out, it contributed to impactful improvements in the transport ecosystem in the country. In the course of implementation, jobs were generated as well. So I believe it is safe to conclude that we met all the promises and objectives of the project, and that it was one of the successful PPPs implemented.   

What are the lessons learned for future projects in the areas of transport and urban mobility? 

“In general, this project was not very problem-laden. However, it took a bit longer to implement the project. Due to transition in government administration, it took a while for the transport agency to complete the implementation of the project.

Looking back, from the onset, we should have extended the support to the transport agency all the way to execution, especially as the agency did not have the skill set to manage an innovative and tech driven project. We hired Rebel in the implementation, and I think that should have been included in the scope from the beginning.”

Cosette’s takeaways:

• The government can learn from the private sector

• More investments should go into digitalisation

• PPP is really a good way to enable innovation in providing public service

• Reducing bureaucracy helps to create an environment that enables innovation