NOTWITHSTANDING calls by Philippine and foreign business groups for
the government to put public-private partnership (PPP) arrangements back
at the forefront of its infrastructure drive, state financing will
continue to be a preferred mode, the head of the Department of Finance
(DoF) told reporters on Thursday last week.
Finance Secretary Carlos G. Dominguez III said he met with heads of some conglomerates last month to discuss this concern.
“I just laid it down to them,” he said, noting some PPP projects have
been delayed “because you guys were arguing… who was going to make the
profit.”
“And in the meantime when you were arguing about that, there is no growth and I think that is unfair to the Filipino people.”
Among those taken off the PPP pipeline were plans to develop the New
Bohol (Panglao), Davao, Iloilo, Laguindingan and Bacolod airports, which
would have been the second airport offer under this scheme after the
P17.52-billion Mactan-Cebu International Airport Passenger Terminal
Building project that was awarded in April 2014.
Mr. Dominguez said the government’s “hybrid” mode — involving state
funding or foreign aid for the construction stage and private sector
participation in operation and maintenance — has proven faster, citing
progress of the Clark International Airport Expansion Project, the first
project under such financing scheme. Groundbreaking is expected in
December after the project was approved in July by the National Economic
and Development Authority board. Operation of the new facility is
expected to start in the first quarter of 2020.
“We have no time. We are very far behind in infra(structure) and we
have to move faster. We have proven we can start a project in 18 months
so that is the benchmark the private sector has to meet,” Mr. Dominguez
said.
“Our experience with PPP — and I am not inventing this — it’s very
slow. How many PPP projects were actually started by the last admin —
half a dozen. They had six years to do it,” he added.
“Half a dozen in six years and the average took 30 months and one of
them took 50 months. Fifty months from conception to the start — I am
not talking about completion.”
source: Businessworld
Tuesday, October 31, 2017
Sunday, October 29, 2017
MPTC says road works on NLEx, SCTEx halted until after ASEAN
METRO PACIFIC Tollways Corp. (MPTC) said roadworks along the North
Luzon Expressway (NLEx) and Subic-Clark-Tarlac Expressway (SCTEx) will
be halted ahead of the Association of Southeast Asian Nations (ASEAN)
Summit in Clark, Pampanga in November.
“Meron kasi kaming mga road expansions tsaka mga expansion sa interchanges, tulad ng sa Mabiga, Sta. Ines, made-delay yun ng mga two weeks because of the ASEAN kasi walang construction (We have some road expansion and expansion of interchanges, like in Mabiga, Sta. Ines. These will be delayed for around two weeks because of the ASEAN, there will be no construction),” MPTC President and Chief Executive Officer Rodrigo E. Franco told BusinessWorld last week.
MPTC started shutting down mainline roadworks at NLEx and SCTEx on Oct. 27 to make way for the heavy traffic expected during the All Saint’s Day holiday, when Filipinos flock to their home provinces to visit the graves of deceased relatives.
Various ASEAN activities and meetings will be held in Clark, Pampanga from Nov. 10 to 14.
The suspension of roadworks at NLEx and SCTEx will run until Nov. 16, when the ASEAN events end.
Around 264,500 to 299,000 vehicles are expected to traverse NLEx during peak periods, 15-30% more than the usual daily traffic.
Meanwhile, suspension of road works in Cavite Expressway (CAVITEx) will run from Oct. 27 to Nov. 2. However, MPTC expects traffic at CAVITEx to lessen during the holidays because users of the expressway are mostly commuters.
MPTC has allocated P3.7 billion for enhancement projects in the expressways, in a bid to boost service capacity, facilitate faster transactions, as well as to support the government’s traffic decongestion efforts.
In NLEx, for instance, the company has already finished construction of 64 new lane-kilometers between Sta. Rita, Guiguinto, Bulacan, Sta. Ines, Mabalacat City, and Pampanga. MPTC has also built more toll lanes in Balintawak, Mindanao Avenue, and Meycauayan toll plazas to speed up transactions.
The San Fernando City Interchange will also be enhanced with the addition of two new bridges as separate carriageways. A right-turning ramp to Mabalacat-Magalang Road in Pampanga will make Sta. Ines a full interchange.
For SCTEx, the company will upgrade the Mabiga interchange by removing a U-turn slot from SCTEx to McArthur Away, turning it into a full diamond interchange. MPTC will also bring Tipo Exit Toll Plaza’s total toll booths to six from the current four toll lanes.
Meanwhile, CAVITEx will be adding new expressway lanes on northbound and southbound directions along the R1 Coastal Road, as well as a flyover at the Pacific Drive.
MPTC is the tollways arm of Mr. Pangilinan’s holding firm, Metro Pacific Investment Corp. (MPIC). MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
source: Businessworld
“Meron kasi kaming mga road expansions tsaka mga expansion sa interchanges, tulad ng sa Mabiga, Sta. Ines, made-delay yun ng mga two weeks because of the ASEAN kasi walang construction (We have some road expansion and expansion of interchanges, like in Mabiga, Sta. Ines. These will be delayed for around two weeks because of the ASEAN, there will be no construction),” MPTC President and Chief Executive Officer Rodrigo E. Franco told BusinessWorld last week.
MPTC started shutting down mainline roadworks at NLEx and SCTEx on Oct. 27 to make way for the heavy traffic expected during the All Saint’s Day holiday, when Filipinos flock to their home provinces to visit the graves of deceased relatives.
Various ASEAN activities and meetings will be held in Clark, Pampanga from Nov. 10 to 14.
The suspension of roadworks at NLEx and SCTEx will run until Nov. 16, when the ASEAN events end.
Around 264,500 to 299,000 vehicles are expected to traverse NLEx during peak periods, 15-30% more than the usual daily traffic.
Meanwhile, suspension of road works in Cavite Expressway (CAVITEx) will run from Oct. 27 to Nov. 2. However, MPTC expects traffic at CAVITEx to lessen during the holidays because users of the expressway are mostly commuters.
MPTC has allocated P3.7 billion for enhancement projects in the expressways, in a bid to boost service capacity, facilitate faster transactions, as well as to support the government’s traffic decongestion efforts.
In NLEx, for instance, the company has already finished construction of 64 new lane-kilometers between Sta. Rita, Guiguinto, Bulacan, Sta. Ines, Mabalacat City, and Pampanga. MPTC has also built more toll lanes in Balintawak, Mindanao Avenue, and Meycauayan toll plazas to speed up transactions.
The San Fernando City Interchange will also be enhanced with the addition of two new bridges as separate carriageways. A right-turning ramp to Mabalacat-Magalang Road in Pampanga will make Sta. Ines a full interchange.
For SCTEx, the company will upgrade the Mabiga interchange by removing a U-turn slot from SCTEx to McArthur Away, turning it into a full diamond interchange. MPTC will also bring Tipo Exit Toll Plaza’s total toll booths to six from the current four toll lanes.
Meanwhile, CAVITEx will be adding new expressway lanes on northbound and southbound directions along the R1 Coastal Road, as well as a flyover at the Pacific Drive.
MPTC is the tollways arm of Mr. Pangilinan’s holding firm, Metro Pacific Investment Corp. (MPIC). MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
source: Businessworld
Friday, October 20, 2017
Competition Commission approves CGCC’s capital stock acquisition of GGDC Holdings
THE
acquisition of the entire outstanding capital stock of GGDC Holdings by
Clark Global City Corp. (CGCC) was approved on Thursday by the
Philippine Competition Commission.
In a statement sent to reporters late Thursday, the competition watchdog said it approved the transaction that would allow CGCC, an affiliate of Davao-based tycoon Dennis A. Uy’s holding firm Udenna Corp., to completely acquire GGDC Holdings.
“The acquisition by (CGCC) of shares in GGDC Holdings does not result in a substantial lessening of competition in the relevant market, since it does not appear that the merged firm has the ability to engage in foreclosure, and in any case, there appears to be sufficient post-acquisition competitive restraint from other market participants,” the PCC said in a decision dated Oct. 19.
The PCC is mandated to review all mergers and acquisitions exceeding P1 billion to ensure fair competition among market participants.
At present, The Port Fund L.P. is the owner of GGDC Holdings.
GGDC Holdings holds a majority stake in Global Gateway Development Corp., a company established in 2008 to develop and operate Global Gateway Logistics City, which sits on a 177-hectare property inside the Clark Civil Aviation Complex, Clark Freeport Zone in Pampanga.
The logistics city is estimated to cost around $200 million in horizontal infrastructure and $3 billion at full build-out, according to government website investphilippines.gov.ph.
The city will be divided into four zones: a logistics park allotted for warehousing, distribution, and light manufacturing operations; a business park for office buildings; an aero park for research and development as well as centers of higher learning; and a town center for retail and commercial needs. – Arra B. Francia
source: Businessworld
In a statement sent to reporters late Thursday, the competition watchdog said it approved the transaction that would allow CGCC, an affiliate of Davao-based tycoon Dennis A. Uy’s holding firm Udenna Corp., to completely acquire GGDC Holdings.
“The acquisition by (CGCC) of shares in GGDC Holdings does not result in a substantial lessening of competition in the relevant market, since it does not appear that the merged firm has the ability to engage in foreclosure, and in any case, there appears to be sufficient post-acquisition competitive restraint from other market participants,” the PCC said in a decision dated Oct. 19.
The PCC is mandated to review all mergers and acquisitions exceeding P1 billion to ensure fair competition among market participants.
At present, The Port Fund L.P. is the owner of GGDC Holdings.
GGDC Holdings holds a majority stake in Global Gateway Development Corp., a company established in 2008 to develop and operate Global Gateway Logistics City, which sits on a 177-hectare property inside the Clark Civil Aviation Complex, Clark Freeport Zone in Pampanga.
The logistics city is estimated to cost around $200 million in horizontal infrastructure and $3 billion at full build-out, according to government website investphilippines.gov.ph.
The city will be divided into four zones: a logistics park allotted for warehousing, distribution, and light manufacturing operations; a business park for office buildings; an aero park for research and development as well as centers of higher learning; and a town center for retail and commercial needs. – Arra B. Francia
source: Businessworld
Tuesday, July 25, 2017
Davao cancels P40-B reclamation JV agreement with Mega Harbour
DAVAO CITY -- Mayor Sara Duterte-Carpio said the city government has terminated the joint venture agreement (JVA) with Mega Harbour Port Development, Inc. in connection with the latter’s unsolicited proposal for a P40-billion reclamation project.
In a statement, Ms. Carpio said, “On July 19, 2017, we communicated to Mega Harbour Port Development our decision not to proceed with the Davao Coastline and Development Project.”
The JVA was signed in June last year by then-mayor Rodrigo R. Duterte, the incumbent mayor’s father, just before he assumed office as the country’s President.
Ms. Carpio said the decision to abort the contract “came about after more than a year of careful review and study of the available documents and after weighing out the intentions of the project against its commercial viability, legal and social implications, and the project’s possible effects on the environment.”
“Our decision to terminate the joint venture agreement is coupled with a resolve that Davao City can really move forward and answer the call of economic growth by implementing highly sustainable projects, both commercially and environmentally,” she added.
Upon taking office last year, the mayor hired independent consultants to undertake a review of the JVA and the project plan, which involved the development of four islands covering 200 hectares from the Sta. Ana Wharf to the Bucana area for an international port and a mixed-use complex with commercial, residential and government office components.
Earlier this year, Mega Harbour, owned by businessman Reghis M. Romero II, agreed to the city government’s request “for better terms” under the contract, particularly a bigger land share for the government complex.
In a Feb. 21 letter to Mega Harbour, the mayor acknowledged the expanded offer and said it will be submitted to the “technical advisers for further study.”
In her statement yesterday, Ms. Carpio said the city government is prepared to answer for the “various legal repercussions” that will accompany the JVA’s termination.
Mega Harbour officials could not be immediately reached for comment yesterday.
In April, the company released a report saying that its technical studies showed encouraging results about the projects as “nothing goes adversely beyond the norm, except for the abrupt steepening of the slope of the sea bed, which can raise the cost of reclamation significantly because of the length of concrete piles that it entails and various other structural requirements.”
The company also said that there are “sea grass and corals in the area near the Sta. Ana wharf, which we will have to avoid by moving the project site further southward.” -- Carmelito Q. Francisco
source: Businessworld
DAVAO CITY -- Mayor Sara Duterte-Carpio said the city government has terminated the joint venture agreement (JVA) with Mega Harbour Port Development, Inc. in connection with the latter’s unsolicited proposal for a P40-billion reclamation project.
In a statement, Ms. Carpio said, “On July 19, 2017, we communicated to Mega Harbour Port Development our decision not to proceed with the Davao Coastline and Development Project.”
The JVA was signed in June last year by then-mayor Rodrigo R. Duterte, the incumbent mayor’s father, just before he assumed office as the country’s President.
Ms. Carpio said the decision to abort the contract “came about after more than a year of careful review and study of the available documents and after weighing out the intentions of the project against its commercial viability, legal and social implications, and the project’s possible effects on the environment.”
“Our decision to terminate the joint venture agreement is coupled with a resolve that Davao City can really move forward and answer the call of economic growth by implementing highly sustainable projects, both commercially and environmentally,” she added.
Upon taking office last year, the mayor hired independent consultants to undertake a review of the JVA and the project plan, which involved the development of four islands covering 200 hectares from the Sta. Ana Wharf to the Bucana area for an international port and a mixed-use complex with commercial, residential and government office components.
Earlier this year, Mega Harbour, owned by businessman Reghis M. Romero II, agreed to the city government’s request “for better terms” under the contract, particularly a bigger land share for the government complex.
In a Feb. 21 letter to Mega Harbour, the mayor acknowledged the expanded offer and said it will be submitted to the “technical advisers for further study.”
In her statement yesterday, Ms. Carpio said the city government is prepared to answer for the “various legal repercussions” that will accompany the JVA’s termination.
Mega Harbour officials could not be immediately reached for comment yesterday.
In April, the company released a report saying that its technical studies showed encouraging results about the projects as “nothing goes adversely beyond the norm, except for the abrupt steepening of the slope of the sea bed, which can raise the cost of reclamation significantly because of the length of concrete piles that it entails and various other structural requirements.”
The company also said that there are “sea grass and corals in the area near the Sta. Ana wharf, which we will have to avoid by moving the project site further southward.” -- Carmelito Q. Francisco
source: Businessworld
Gov’t told to pay Maynilad for losses
AN ARBITRAL TRIBUNAL has ordered the
Philippine government to reimburse Maynilad Water Services, Inc. at
least P3.4 billion for losses incurred by Metro Manila’s west zone water
concessionaire from delayed implementation of its rebased water rates.
“The Tribunal ordered the Republic to reimburse Maynilad the amount of P3,424,690,000 for losses from 11 March 2015 to 31 August 2016, without prejudice to any rights that Maynilad may have to seek recourse against MWSS for losses incurred from 1 January 2013 to 10 March 2015,” Maynilad’s parent firm, Metro Pacific Investments Corp. (MPIC), told the Philippine Stock Exchange on Tuesday, referring to the Metropolitan Waterworks and Sewerage System (MWSS).
“Further, the Tribunal ruled that Maynilad is entitled to recover from the Republic its losses from 1 September 2016 onwards. In case a disagreement on the amount of such losses arises, Maynilad may revert to the Tribunal for further determination.”
Maynilad holds the exclusive concession granted by the MWSS to provide water and sewerage services in Metro Manila’s west service area.
MPIC -- which owns 52.8% of Maynilad -- is one of three key Philippine units of Hong Kong-based First Pacific Company Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.
In an interview, Randolph T. Estrellado, Maynilad chief operating officer, said the company has received a copy of the ruling and has given its approval to have it posted at the Permanent Court of Arbitration at the Hague, although it withheld announcement pending government clearance.
Mr. Estrellado said he was confident that the government would honor the decision, although he could not give the possible next step for Maynilad given that the arbitral ruling is the first of its kind for the company.
“It’s our first time to go through this process,” he said.
Sought for comment, Finance Secretary Carlos G. Dominguez III told reporters: “[We] will check if there is budget space for this.”
In its July 24 decision, the three-man tribunal upheld the validity of Maynilad’s claim against the undertaking letter issued by the Republic of the Philippines -- through the Department of Finance (DoF) -- to compensate the company for the delayed implementation of tariffs for the 2013-2017 rebasing period.
The letter provides, among other things, that the government will indemnify Maynilad for losses caused by delay attributable to any state agency in implementing any increase in the standard water rates, beyond the date of its implementation in accordance with the concession agreement dated Feb. 21, 1997.
Ramoncito S. Fernandez, Maynilad president and chief executive officer, said in a statement that the tribunal’s decision “is an affirmation of the trust and confidence” that the company had placed in the concession agreement (CA), which he said had been responsible “for the significantly improved water and wastewater services in its concession area.”
“We will continue to honor our commitments under the CA and pursue the capital expenditure projects that will improve further the quality of service to our customers, as well as support the government’s initiative in ensuring the sustainability of our country’s water resources,” Mr. Fernandez said.
Maynilad said in the coming days, it would coordinate and cooperate with the government “in finding the most efficient way to implement the judgment.”
MWSS Chief Regulator Joel C. Yu said he was not in a position to comment on the arbitral decision, saying the entities involved on the government side are the DoF and the Office of the Solicitor General, while MWSS Administrator Reynaldo V. Velasco said in a mobile phone message that his office had yet to receive a copy of the decision.
MATERIAL EFFECT
Under its concession agreement with the government, Maynilad may apply for tariff rate adjustments based on movements in the inflation rate, foreign exchange currency differentials, a rate rebasing process scheduled every five years and certain extraordinary events.
Any rate adjustment needs the approval of MWSS and the agency’s regulatory office.
“Any tariff adjustment that is not granted, in a timely manner, in full or at all, could have a material adverse effect on Maynilad’s results of operations and financial condition as well as MPIC,” the listed infrastructure conglomerate said in its 2016 annual report.
Water and sewerage service revenues contributed the biggest chunk at P20.224 billion, or 45%, to MPIC’s P44.82-billion operating revenues last year, with toll, health care and railway businesses accounting for smaller shares.
“There was a first arbitration because we disagreed with the MWSS on the rate rebasing of 2012,” Mr. Estrellado recalled, referring to its application for rates covering the next five-year regulatory period.
The approved rate adjustment of Maynilad for the 2013-2017 period consists of a 9.8% hike in the 2013 average basic water charge of P31.28 per cubic meter (/cu.m.), inclusive of the P1 currency exchange rate adjustment that MWSS has included in the basic charge.
The increase translates to an average P3.06/cu.m. hike.
“MWSS changed the rules and said income taxes were not recoverable even though for the last 17 years, the return was computed post-tax. We disagreed with them and we brought that to arbitration. That was a local arbitration and we won,” Mr. Estrellado said.
In 2014, Maynilad won the arbitration for its 2013-2017 water tariff, which centered on corporate income taxes being a recoverable expense.
MWSS has not implemented the award while awaiting clarification from the Supreme Court.
“December 2014, we got the result of the first arbitration saying that the panel agreed with our number and it should be executed,” Mr. Estrellado said.
“MWSS, even though it was a final, binding judgment and unappealable, they decided not to implement the tariff.”
As a result, Maynilad notified the government that it was calling on the written undertaking to compensate the company for losses arising from the delay.
On March 27, 2015, Maynilad served a notice of arbitration against the government. Hearings were completed in December last year in Singapore.
“They decided that government’s liability started March 2015 when we, I guess, went after the undertaking letter,” Mr. Estrellado said.
“Because the hearings happened last December, we submitted all our documentations [in] September. So only up to August 2016 ang data namin,” he added.
“It’s easy to compute the claim. It’s just what should be tariffed [sic] minus what is the actual tariff times the billed volume,” he explained.
“Part of the ruling also was… Maynilad and the government can talk among themselves on the treatment of September [2016] onwards, but if you don’t get to an agreement then go back to us if you need to and we will determine that amount.”
“Because of the undertaking letter, it’s government that is taking care of it.”
He said the three-man tribunal was comprised by a separate nominee from Maynilad and the Philippine government, and a chairman, which the two agreed to select from a list presented by the court.
“We don’t know exactly how the government will pay,” Mr. Estrellado said.
For losses incurred from September 1, 2016 onwards, he quantified the amount at roughly P200 million a month or around P2 billion for the 10-month period ending in July 2017.
“Roughly every month that rebasing tariff is not implemented, we have forgone revenues of P200 million,” he said.
Maynilad serves most of Manila, parts of Quezon and Makati cities, as well as the cities of Caloocan, Pasay, Parañaque, Las Piñas, Valenzuela, Navotas and Malabon. Its franchise area includes the cities of Bacoor and Imus and the municipalities of Kawit, Noveleta and Rosario in Cavite.
MPIC shares went up by as much as 4.18% yesterday before paring gains to increase 2.09% to P6.84 apiece at the end of trading.
“I believe this decision could help Maynilad use its claims to further improve its service through its capex projects,” said Katrine Eunice L. Dolatre, investment analyst-equity research, F. Yap Securities, Inc.
Maynilad has set aside around P11 billion for its 2017 capital expenditure, up from P9 billion last year.
source: Businessworld
“The Tribunal ordered the Republic to reimburse Maynilad the amount of P3,424,690,000 for losses from 11 March 2015 to 31 August 2016, without prejudice to any rights that Maynilad may have to seek recourse against MWSS for losses incurred from 1 January 2013 to 10 March 2015,” Maynilad’s parent firm, Metro Pacific Investments Corp. (MPIC), told the Philippine Stock Exchange on Tuesday, referring to the Metropolitan Waterworks and Sewerage System (MWSS).
“Further, the Tribunal ruled that Maynilad is entitled to recover from the Republic its losses from 1 September 2016 onwards. In case a disagreement on the amount of such losses arises, Maynilad may revert to the Tribunal for further determination.”
Maynilad holds the exclusive concession granted by the MWSS to provide water and sewerage services in Metro Manila’s west service area.
MPIC -- which owns 52.8% of Maynilad -- is one of three key Philippine units of Hong Kong-based First Pacific Company Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.
In an interview, Randolph T. Estrellado, Maynilad chief operating officer, said the company has received a copy of the ruling and has given its approval to have it posted at the Permanent Court of Arbitration at the Hague, although it withheld announcement pending government clearance.
Mr. Estrellado said he was confident that the government would honor the decision, although he could not give the possible next step for Maynilad given that the arbitral ruling is the first of its kind for the company.
“It’s our first time to go through this process,” he said.
Sought for comment, Finance Secretary Carlos G. Dominguez III told reporters: “[We] will check if there is budget space for this.”
In its July 24 decision, the three-man tribunal upheld the validity of Maynilad’s claim against the undertaking letter issued by the Republic of the Philippines -- through the Department of Finance (DoF) -- to compensate the company for the delayed implementation of tariffs for the 2013-2017 rebasing period.
The letter provides, among other things, that the government will indemnify Maynilad for losses caused by delay attributable to any state agency in implementing any increase in the standard water rates, beyond the date of its implementation in accordance with the concession agreement dated Feb. 21, 1997.
Ramoncito S. Fernandez, Maynilad president and chief executive officer, said in a statement that the tribunal’s decision “is an affirmation of the trust and confidence” that the company had placed in the concession agreement (CA), which he said had been responsible “for the significantly improved water and wastewater services in its concession area.”
“We will continue to honor our commitments under the CA and pursue the capital expenditure projects that will improve further the quality of service to our customers, as well as support the government’s initiative in ensuring the sustainability of our country’s water resources,” Mr. Fernandez said.
Maynilad said in the coming days, it would coordinate and cooperate with the government “in finding the most efficient way to implement the judgment.”
MWSS Chief Regulator Joel C. Yu said he was not in a position to comment on the arbitral decision, saying the entities involved on the government side are the DoF and the Office of the Solicitor General, while MWSS Administrator Reynaldo V. Velasco said in a mobile phone message that his office had yet to receive a copy of the decision.
MATERIAL EFFECT
Under its concession agreement with the government, Maynilad may apply for tariff rate adjustments based on movements in the inflation rate, foreign exchange currency differentials, a rate rebasing process scheduled every five years and certain extraordinary events.
Any rate adjustment needs the approval of MWSS and the agency’s regulatory office.
“Any tariff adjustment that is not granted, in a timely manner, in full or at all, could have a material adverse effect on Maynilad’s results of operations and financial condition as well as MPIC,” the listed infrastructure conglomerate said in its 2016 annual report.
Water and sewerage service revenues contributed the biggest chunk at P20.224 billion, or 45%, to MPIC’s P44.82-billion operating revenues last year, with toll, health care and railway businesses accounting for smaller shares.
“There was a first arbitration because we disagreed with the MWSS on the rate rebasing of 2012,” Mr. Estrellado recalled, referring to its application for rates covering the next five-year regulatory period.
The approved rate adjustment of Maynilad for the 2013-2017 period consists of a 9.8% hike in the 2013 average basic water charge of P31.28 per cubic meter (/cu.m.), inclusive of the P1 currency exchange rate adjustment that MWSS has included in the basic charge.
The increase translates to an average P3.06/cu.m. hike.
“MWSS changed the rules and said income taxes were not recoverable even though for the last 17 years, the return was computed post-tax. We disagreed with them and we brought that to arbitration. That was a local arbitration and we won,” Mr. Estrellado said.
In 2014, Maynilad won the arbitration for its 2013-2017 water tariff, which centered on corporate income taxes being a recoverable expense.
MWSS has not implemented the award while awaiting clarification from the Supreme Court.
“December 2014, we got the result of the first arbitration saying that the panel agreed with our number and it should be executed,” Mr. Estrellado said.
“MWSS, even though it was a final, binding judgment and unappealable, they decided not to implement the tariff.”
As a result, Maynilad notified the government that it was calling on the written undertaking to compensate the company for losses arising from the delay.
On March 27, 2015, Maynilad served a notice of arbitration against the government. Hearings were completed in December last year in Singapore.
“They decided that government’s liability started March 2015 when we, I guess, went after the undertaking letter,” Mr. Estrellado said.
“Because the hearings happened last December, we submitted all our documentations [in] September. So only up to August 2016 ang data namin,” he added.
“It’s easy to compute the claim. It’s just what should be tariffed [sic] minus what is the actual tariff times the billed volume,” he explained.
“Part of the ruling also was… Maynilad and the government can talk among themselves on the treatment of September [2016] onwards, but if you don’t get to an agreement then go back to us if you need to and we will determine that amount.”
“Because of the undertaking letter, it’s government that is taking care of it.”
He said the three-man tribunal was comprised by a separate nominee from Maynilad and the Philippine government, and a chairman, which the two agreed to select from a list presented by the court.
“We don’t know exactly how the government will pay,” Mr. Estrellado said.
For losses incurred from September 1, 2016 onwards, he quantified the amount at roughly P200 million a month or around P2 billion for the 10-month period ending in July 2017.
“Roughly every month that rebasing tariff is not implemented, we have forgone revenues of P200 million,” he said.
Maynilad serves most of Manila, parts of Quezon and Makati cities, as well as the cities of Caloocan, Pasay, Parañaque, Las Piñas, Valenzuela, Navotas and Malabon. Its franchise area includes the cities of Bacoor and Imus and the municipalities of Kawit, Noveleta and Rosario in Cavite.
MPIC shares went up by as much as 4.18% yesterday before paring gains to increase 2.09% to P6.84 apiece at the end of trading.
“I believe this decision could help Maynilad use its claims to further improve its service through its capex projects,” said Katrine Eunice L. Dolatre, investment analyst-equity research, F. Yap Securities, Inc.
Maynilad has set aside around P11 billion for its 2017 capital expenditure, up from P9 billion last year.
source: Businessworld
Sunday, July 16, 2017
Clark is preferred airport project because of shorter timeline
AMID unsolicited proposals to establish new
and modern airports in Bulacan and Sangley Point in Cavite, the
government’s chief economic planner still views Clark International
Airport as the “superior” option to decongest Ninoy Aquino International
Airport (NAIA).
“I think the Clark seems to be superior in terms of location, and also it’s much more advanced in terms of development,” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters last week when asked whether the unsolicited proposals will be the best alternative entry point of international flights.
He said that the government is prioritizing those projects that can be completed within the Duterte administration’s term.
“We want to focus on things that are finishable within three years or at least within the term of the President,” said Mr. Pernia.
The government is currently implementing the Clark International Airport’s P15.34 billion new terminal building, which is expected to be completed in 2020. The Clark airport will also be linked with the Philippine National Railway line running from Malolos to Clark Green City.
However Mr. Pernia said airport bids are not being ruled out, and will still be part of the investment pipeline under the National Economic and Development Authority-Investment Coordination Council (NEDA-ICC).
“That is what we need in the immediate and short term. So in other words the unsolicited proposals are on the back burner,” he said.
“The (unsolicited) airport projects are still not dead. We are looking at them, we’ll let them go through the process. They are going through the ICC board, then the ICC, and then we will make sure that there will be no conditions,” Mr. Pernia added.
There have been at least two unsolicited proposals to build a new airport near Metro Manila submitted to the current government. One is led by San Miguel Corp.’s Ramon S. Ang with a $14-billion airport in Bulacan, involving a 2,500-hectare property that can accommodate up to six runways.
The other was proposed by All-Asia Resources & Reclamation Corp., the Tieng family’s team-up with the Sy family’s Belle Corp., for a $50-billion airport and economic zone at Sangley Point in Cavite.
The Bulacan airport feasibility study is complete, and is currently in the pipeline with the ICC technical board, while studies for the Sangley airport are awaiting submission, according to Mr. Pernia.
Still, the proposals -- which are considered public-private partnership projects and subject to Swiss challenge -- are likely to be completed by the next administration.
“They will take some time to build. The new Hong Kong airport took 10 years, I understand, to build. So that’s really going to be more of interest to the next admin rather this one. But in terms of processing, they have been submitted and we are looking into it,” said Mr. Pernia.
“They’re going to go through the usual process. There’s no special treatment,” he said. -- Elijah Joseph C. Tubayan
source: Businessworld
“I think the Clark seems to be superior in terms of location, and also it’s much more advanced in terms of development,” Socioeconomic Planning Secretary Ernesto M. Pernia told reporters last week when asked whether the unsolicited proposals will be the best alternative entry point of international flights.
He said that the government is prioritizing those projects that can be completed within the Duterte administration’s term.
“We want to focus on things that are finishable within three years or at least within the term of the President,” said Mr. Pernia.
The government is currently implementing the Clark International Airport’s P15.34 billion new terminal building, which is expected to be completed in 2020. The Clark airport will also be linked with the Philippine National Railway line running from Malolos to Clark Green City.
However Mr. Pernia said airport bids are not being ruled out, and will still be part of the investment pipeline under the National Economic and Development Authority-Investment Coordination Council (NEDA-ICC).
“That is what we need in the immediate and short term. So in other words the unsolicited proposals are on the back burner,” he said.
“The (unsolicited) airport projects are still not dead. We are looking at them, we’ll let them go through the process. They are going through the ICC board, then the ICC, and then we will make sure that there will be no conditions,” Mr. Pernia added.
There have been at least two unsolicited proposals to build a new airport near Metro Manila submitted to the current government. One is led by San Miguel Corp.’s Ramon S. Ang with a $14-billion airport in Bulacan, involving a 2,500-hectare property that can accommodate up to six runways.
The other was proposed by All-Asia Resources & Reclamation Corp., the Tieng family’s team-up with the Sy family’s Belle Corp., for a $50-billion airport and economic zone at Sangley Point in Cavite.
The Bulacan airport feasibility study is complete, and is currently in the pipeline with the ICC technical board, while studies for the Sangley airport are awaiting submission, according to Mr. Pernia.
Still, the proposals -- which are considered public-private partnership projects and subject to Swiss challenge -- are likely to be completed by the next administration.
“They will take some time to build. The new Hong Kong airport took 10 years, I understand, to build. So that’s really going to be more of interest to the next admin rather this one. But in terms of processing, they have been submitted and we are looking into it,” said Mr. Pernia.
“They’re going to go through the usual process. There’s no special treatment,” he said. -- Elijah Joseph C. Tubayan
source: Businessworld
Gov’t studying 6 power proposals for Laguna de Bay
THE Department of Energy (DoE) has accepted
six project proposals that seek to use water from Laguna de Bay to
produce power using pumped-storage hydroelectricity.
The process generates electricity from the release of pumped and stored water in a reservoir.
“We have accepted six service contract applications over Laguna Lake,” Mario C. Marasigan, who heads the Department of Energy’s renewable energy management bureau.
“All of these projects are pumped storage,” he said, identifying Citicore Power, Inc. and Phinma Energy Corp. as among the project proponents.
He said the proposals would require pumping water from Laguna de Bay and storing it in a reservoir at a higher elevation. When there is a demand for electricity, the stored water is released through turbines to produce power.
He said the range of capacity targeted by the proponents is from 400 megawatts (MW) to 600 MW. The final figure will depend on the outcome of their feasibility studies, he added.
Mr. Marasigan said the six projects would total around 3,000 MW depending on whether Laguna de Bay is able to accommodate the projects. The projects are distributed around the Rizal and Laguna sides of the lake, he said.
He said the feasibility studies of the proponents would answer whether Laguna de Bay has sufficient water to allow the construction of the power generation facilities. The government has a similar project installed -- the Caliraya-Botocan-Kalayaan power generation complex in Laguna, which has a combined capacity of around 379 MW.
Mr. Marasigan said interest in putting up a pumped storage facility in Laguna de Bay follows the passage of the Renewable Energy Act of 2008 and the Mini-hydroelectric Power Incentive Act of 1990.
He said before the passage of the two laws, only government agency National Power Corp. held the exclusive authority to exploit the country’s river systems and water bodies for power development.
“All six projects are in the pre-development stage,” Mr. Marasigan said.
Sought for comment, Rio Q. Balaba, Citicore energy regulations manager, said the company was awarded about a month ago a service contract to develop certain areas in Laguna.
Citicore’s technical working group was “formulating the project development landscape and procedure on how to move with the project,” he said.
“We are given under the service contract a pre-development stage of five years. But we are as aggressive and very committed for our renewable energy development,” he told reporters.
“We wanted, as much as possible, earlier than five,” he said, adding that the project will depend on the outcome of the feasibility study. -- Victor V. Saulon
source: Businessworld
The process generates electricity from the release of pumped and stored water in a reservoir.
“We have accepted six service contract applications over Laguna Lake,” Mario C. Marasigan, who heads the Department of Energy’s renewable energy management bureau.
“All of these projects are pumped storage,” he said, identifying Citicore Power, Inc. and Phinma Energy Corp. as among the project proponents.
He said the proposals would require pumping water from Laguna de Bay and storing it in a reservoir at a higher elevation. When there is a demand for electricity, the stored water is released through turbines to produce power.
He said the range of capacity targeted by the proponents is from 400 megawatts (MW) to 600 MW. The final figure will depend on the outcome of their feasibility studies, he added.
Mr. Marasigan said the six projects would total around 3,000 MW depending on whether Laguna de Bay is able to accommodate the projects. The projects are distributed around the Rizal and Laguna sides of the lake, he said.
He said the feasibility studies of the proponents would answer whether Laguna de Bay has sufficient water to allow the construction of the power generation facilities. The government has a similar project installed -- the Caliraya-Botocan-Kalayaan power generation complex in Laguna, which has a combined capacity of around 379 MW.
Mr. Marasigan said interest in putting up a pumped storage facility in Laguna de Bay follows the passage of the Renewable Energy Act of 2008 and the Mini-hydroelectric Power Incentive Act of 1990.
He said before the passage of the two laws, only government agency National Power Corp. held the exclusive authority to exploit the country’s river systems and water bodies for power development.
“All six projects are in the pre-development stage,” Mr. Marasigan said.
Sought for comment, Rio Q. Balaba, Citicore energy regulations manager, said the company was awarded about a month ago a service contract to develop certain areas in Laguna.
Citicore’s technical working group was “formulating the project development landscape and procedure on how to move with the project,” he said.
“We are given under the service contract a pre-development stage of five years. But we are as aggressive and very committed for our renewable energy development,” he told reporters.
“We wanted, as much as possible, earlier than five,” he said, adding that the project will depend on the outcome of the feasibility study. -- Victor V. Saulon
source: Businessworld
Subscribe to:
Posts (Atom)