PPP project retains interest

TWO CONGLOMERATES -- Metro Pacific Investments Corp. (MPIC) and Ayala Corp. -- remain interested in Cavite-Laguna (CALA) Expressway project despite changes in the public-private partnership (PPP) deal’s bidding terms, senior officials of both firms said separately yesterday.

“Yes, we will pursue,” MPIC Chief Financial Officer David J. Nicol said in a text message when asked if the company would still bid despite changes.

“We are interested in CALA and [we] will look into the details as soon as bid documents are finalized,” John Eric T. Francia, Ayala’s managing director and head for corporate strategy and development, said in a separate text.

Public Works Undersecretary Rafael C. Yabut last week said deadline for submission of qualification documents for the P35.5-billion project, originally set last June 10, was moved to a still undetermined date as the government decided to remove the P15-billion official development assistance component that was to finance the state’s participation in the project.

In a telephone interview yesterday, PPP Center Executive Director Cosette V. Canilao said the “government ‘could be out’ of the project as the DPWH (Department of Public Works and Highways) is still finalizing bidding parameters.” The private sector will be the one undertaking the segment originally intended for the government, she explained.

The CALA Expressway project involves construction of a 47-kilometer (km) highway that will connect the Manila-Cavite and South Luzon (SLEx) expressways. As originally planned, the private sector was to finance, design and build the P19.7-billion, 28.9-km Cavite section from Kawit to Aguinaldo Highway in Silang, while the government was to finance, design and build the P15.8-billion, 18.1-km Laguna section from the Aguinaldo Highway to the SLEx Mamplasan exit in Laguna.

Ms. Canilao said the move was meant to avoid “integration risks.”

“Some of the interested parties were concerned that their revenue projections might be affected if the government fails to deliver its part on time,” she explained.

Officials of other parties earlier identified as being keen on the project -- San Miguel Corp. and the Villar Group. -- were not immediately available for comment.

Ms. Canilao last week said revision of terms was encouraged by the success of the P15.8-billion Ninoy Aquino International Airport (NAIA) Expressway project. San Miguel -- the winning bidder -- offered P11-billion payment to the government on top of construction cost. San Miguel made the P11-billion payment early this month.

MPIC and Ayala Corp. have been active participants in the government’s flagship infrastructure program.

Ayala in September 2011 bagged the P1.96-billion Daang Hari-South Luzon Expressway Link, the first PPP project to be awarded by the Aquino administration.

Ayala and MPIC have teamed up to bid for the P60-billion expansion and operation of the Light Rail Transit Line 1 (LRT-1) and the P1.72-billion automated fare collection system (AFCS) for Metro Manila’s light railways. The Ayala-MPIC partnership was pre-qualified to bid for those projects.

Ayala and MPIC, with their respective consortia, were also pre-qualified to bid for the P17.5-billion project to expand and operate Mactan-Cebu International Airport.

Bidding for the LRT-1 project is set for next month while auction for AFCS and Mactan-Cebu airport projects will be in August.

The second PPP project awarded by the government was the P16.42-billion PPP School Infrastructure Project Phase One that was bagged last year by the Citicore Holdings Investment, Inc.-Megawide Construction Corp., Inc. and BF Corp.-Riverbanks Development Corp. consortia; while the third one was the NAIA Expressway project that was awarded last month to San Miguel.

Yesterday, shares of MPIC added five centavos or 0.93% to P5.43 apiece, while those of Ayala gained P13.50 or 2.35% to close at P587.50 each. MPIC is the local unit of Hong Kong-based First Pacific Co. Ltd., which partly owns Philippine Long Distance Telephone Co. (PLDT). Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a minority stake in BusinessWorld.

source:  Businessworld