Mactan-Cebu International Airport takes off due to PPP deal with GMR

LAPU-LAPU CITY—Some P35 billion have been infused for the modernization of the Mactan-Cebu International Airport (MCIA) here.

The amount shows a stark contrast to the P15.35 billion that President Aquino approved for the Clark International Airport’s (CIA) new terminal to be finished in 2022.

Andrew Acquaah-Harrison, chief executive advisor of GMR Megawide, said MCIA is presently handling 7.1 million passengers annually, but in the fourth year of its modernization, MCIA will be handling 11 million passengers and will have a terminal capacity for 12.5 million.

The CIA is presently handling close to 1 million passengers in its terminal which has a capacity of 4 million and with the completion of the first phase of the new terminal in 2017 will add another 3 million.

Harrison said GMR has taken over the MCIA operation and upgrade after winning the bid and signing a public-private partnership (PPP) agreement with the government in November 2014.

The CIA’s new terminal is fully funded by the national government in the General Appropriations Act  in contrast to the MCIA’s PPP.

Harrison said that at present, MCIA is handling 260 flights per day and 12 to 13 movements per hour, which is an improvement after only less than a year of their operations.

Harrison said Hyderabad International Airport, also known as Rajiv Gandhi International Airport was the first airport developed by GMR in India.

Harrison said PPP is an advocacy.

“I’m not saying that everybody should believe in it, but what we want to demonstrate is PPP is a successful route to economic growth and development and you will see that our story is a testimony to that success,” he said.

“Let’s not forget that the airport hub is a business and in this business, 66.67 percent of our income comes from aeronautical, anything to do with aircraft airline passenger charges. Nonaeronautical is retail that’s around 29.99 percent and around 3 1/2 percent comes from innovation, like advertising and other creative ideas,” he added.

“And in order to remember that, we have to focus on the needs of the airlines,” he stressed. Often people mistake an airport customer to be the passengers. It is not, he pointed out.

“Airports’ primary customers are the airlines because without the airlines there are no passengers,” he said. “People will not show up at the airport and say we’re gonna travel to Mactan because the staff there are really nice but they travel because they have a particular airline they fly with,” he explained.

“Concessionaires and businesses, they are important stakeholders in the airport community and they have to feel that they are part of the airport, and of course, passengers,” he said.

All of that translate into an airport product which is user experience,” he added.

“Our view is we must focus on this user experience, and if we focus on that, we will be successful and we will be profitable, but if we focus just on profitability and ignore this user experience we won’t succeed.

“We see ourselves as part of the tourism ecosystem working with local governments, resorts, hotels, tour operators, the Department of Tourism to market Cebu more aggressively,” he said.

“So for example, we are planning a road show in China to visit six cities where we can demonstrate the beauty of the Philippines, how close it is to get to the Philippines and the affordability of the Philippines.”

Harrison said, “We will try to put the Philippines on the map in the way perhaps very different on how it was done so far, but that’s not to undermine the efforts that were put in before.” He said if these efforts will not be made, “the capacity of the airport can never be realized.”

source:  Business Mirror

5 groups vie for P108-B airports PPP

THE DEPARTMENT of Transportation and Communications (DOTC) has cleared five out of six groups seeking to participate in its next big-ticket public-private partnership (PPP) project, the auction of airport contracts for the Bacolod-Silay, Iloilo, Davao, Laguindingan and New Bohol air gateways.

In a bid bulletin issued Friday, the department said it prequalified consortiums led by Filipino conglomerates and their international partners vying for the contracts valued together at about P108 billion.

Those that made the cut were San Miguel Corp. and South Korea’s Incheon International Airport (SMHC-IIAC Airport Consortium); Metro Pacific Investments Corp. with a unit of Aéroports de Paris and TAV Havalimanlari Holdings A.S. (Philippine Airports Consortium); Aboitiz Equity Ventures with VINCI Airports (Maya Consortium); Megawide Construction Corp. and India’s GMR Infrastructure (GMR Infrastructure and Megawide Consortium), and Filinvest Land Inc., Japan Airport Terminal Corp. and Sojitz Corp. (Filinvest-Jatco-Sojitz Consortium), the DOTC said.

A sixth group, Union Equities-Acsa Consortium, was disqualified by the DOTC.

The prequalification documents were submitted last Aug. 17. This exercise is meant to determine which groups are qualified to submit technical and financial proposals for the project. Those bids are expected to be opened by January 2016 and the DOTC expects to award the project by February 2016.

The DOTC said the operations and maintenance (O&M) of the regional airports, selected partly for their tourism potential, would be bid out in two bundles.

The first bundle consists of the P20.26-billion Bacolod-Silay and the P30.40-billion Iloilo airport projects. The second bundle will include the P40.57-billion Davao, the P14.62-billion Laguindingan and the P2.34-billion Bohol airport projects.

The winning concessionaires for each bundle will handle the O&M of the airports for 30 years and will undertake the expansion of the facilities as most of the airports are operating beyond their design capacity. These improvements are needed to enhance passenger safety and convenience as well as to ensure more efficient airport operations.

This is the second airport PPP deal after the P17.5-billion Mactan Cebu International Airport was rolled out and eventually awarded in 2014 to the Megawide-GMR consortium.

Apart from this project, the DOTC had said it was studying the possible O&M auction of Manila’s Ninoy Aquino International Airport, the country’s busiest air gateway. This comes amid the broader goal to replace Naia, which suffers from heavy congestion, with a new international gateway.

source:  Inquirer

The second P in PPP

IT INCREASINGLY appears that regaining the 6- to 7-plus percent growth enjoyed by the Philippine economy in recent years may be much harder than some believe. It will certainly take much more than simply ramping up public expenditures, the commonly cited culprit for the first-quarter slowdown. It will be hard enough even just to ramp up government spending, for two reasons.

First, one hears of widespread fears among government bureaucrats of auditors’ scrutiny and court sanctions, in the wake of controversies surrounding pork barrel funds and the Disbursement Acceleration Program. This has supposedly prompted much greater spending caution, translating to bureaucratic delays in executing government projects.

Second, government agencies are said to be unaccustomed to much higher levels of activity now made possible by government’s largely successful efforts to plug massive corruption leaks of the past.

More than government spending, our weak infrastructure now looms large among the traditional barriers to higher economic growth in the Philippines. Four were highlighted in a 2007 Asian Development Bank study: (1) tight government finances due to weak revenues, (2) inadequate infrastructure, especially in electricity and transport, (3) weak investment due to poor governance and political instability, and (4) a small and narrow industrial base due to various market failures. The first and third have since seen much improvement, while the fourth is changing due to a surge in manufacturing since 2010, with China quickly losing its status as “factory to the world.” But it is in the second where in spite of high-profile completed and oncoming projects, the gap, both with our neighbors and with respect to our own urgent needs, has grown uncomfortably large.

Anyone living or working in Metro Manila knows how harrowing an experience it has lately become to travel within the city, whether by public transport or private vehicle, at any time of the day. Those of us who depend heavily on Internet and telecommunications facilities for our work constantly find ourselves cursing our slow, erratic and unreliable communication links. Those in parts of the country with limited electric power capacity suffer from intermittent power outages that impair business operations, not to mention the discomfort and occasional damage suffered by all. All these severely weigh down on everybody’s productivity, and add up to stunted economic growth, held well below what our economy should potentially be capable of given solid fundamentals and strong domestic demand.

For nearly three decades now, the popular prescription has been: If government can’t do it, then let the private business sector step forward. At the outset, the impetus behind public-private partnerships, particularly in the provision of infrastructure facilities, was lack of government finances in the face of tremendous needs. For decades, we’ve lagged well behind our dynamic neighbors in energy, water, transport and telecommunications facilities. Government’s hands used to be tied with a heavy debt burden, weak revenue collections, and a deficit that constantly tested the threshold levels imposed by the country’s official creditors.

But things are very different now. Government can now afford to spend a lot more than it ever could before. Still, our infrastructure gaps have grown so huge that this newfound fiscal space is nowhere near enough to provide the hundreds of billions of pesos we will need to close them.

Apart from limited taxpayer money, where else could the money come from? It can conceptually come from our large pool of savings held by banks and other financial institutions, all looking for ways to invest the huge sums in their hands.

China, Korea, Malaysia and Singapore have made good use of infrastructure bonds, debt instruments with which government borrows money from the public. Through the stock market, private savers can also invest directly in publicly listed infrastructure firms (the Manila Water Co. is an example), which may also borrow directly from banks. The modern financial system has found various ways, from simple loans to complex derivatives, by which savings of large and small savers alike may be channeled to fund large infrastructure projects. These are usually built by private entities that must inevitably step in, given the formidable obstacle of lack of government funds, even through the longer term. And as recent experience shows, an equally formidable obstacle is government’s inability to execute, operate and maintain such projects at the required magnitudes. Private partnership is vital to fill not only the financing gap, but the implementation gap as well.

A major difficulty remains: Persisting constitutional restrictions on foreign investment in public utilities keep the field of potential private players too narrow. This is a problem because (1) even the largest locals will be unable to muster the financial muscle needed to fill the huge needs, and (2) we are getting to a situation where too few entities practically own (hence control) the country, private and public facilities alike. What we need, then, is to open more opportunities for ordinary Filipinos to take part in funding our infrastructure, including effective ways to harness overseas remittances and personal savings (the way postal savings have been a major financial force in Japan, for example). And for practical reasons, we also need to open the door wider so foreigners can expand the pool of private sector partners who can help take us out of our massive infrastructure backlog—and fast.

* * *

cielito.habito@gmail.com

source:  Philippine Daily Inquirer

Lack of clear laws may place bidders for gov’t projects at a disadvantage

With the Commission on Election’s parallel biddings for the refurbishment of the existing Precinct Count Optical Scan (PCOS) machines and the lease of new optical mark reader (OMR) units, the implementation of Republic Act No. 9184, otherwise known as the “Government Procurement Reform Act”, is again put to a test.

The challenges that the implementation of the law is facing continue with the various public-private partnership (PPP) projects under procurement.

These PPP projects include the Regional Prison Facilities in Nueva Ecija to be implemented by the Department of Justice with indicative project cost of P50.18 billion; Laguna Lakeshore Expressway Dike Project of the Department of Public Works and Highways with indicative cost of P122.8 billion; Davao Sasa Port Modernization Project of the Department of Transportation and Communications (DoTC) and the Philippine Ports Authority (PPA), which reaped strong opposition from the local business sector “because it is too costly” at P18.99 billion; and the South Line of the North-South Railway Projects to be implemented by the DoTC, which is touted as the biggest PPP deal to date, costing P170.7 billion.

The government procurement process covers the phases identified under the Republic Act (RA) 9184 and its Revised Implementing Rules and Regulation (IRR) -- from preparation of bidding documents, invitation to bid, receipt and opening of bids, bid evaluation, post-qualification, until the contract is awarded and implemented. In all these phases, the Bids and Awards Committee (BAC) of the procuring entity is at the helm.

The chances are relatively high, particularly in huge projects, that a bidder will raise a question at any phase of the process.

PROTEST MECHANISM UNDER RA 9184 AND THE REVISED IRR
In the spirit of transparency, competition, and accountability, RA 9184, under Article XVII thereof, provides the mechanism in the event of any such protest.

Decisions of the BAC at any stage of the procurement process may be questioned by filing a request for reconsideration within three (3) calendar days upon receipt of written notice (that is, notice of eligibility, disqualification) or upon verbal notification (during opening of bids). The BAC shall decide on the request for reconsideration within seven (7) calendar days from receipt thereof. If the BAC denies the request for reconsideration, parties may still file a protest against the decision by writing to the Head of the Procuring Entity (HOPE). Note that a request for reconsideration is a requisite before filing a protest.

The protest must be filed within seven calendar days from receipt of the BAC decision denying the request for reconsideration. The protest may be made by filing a verified position paper, accompanied by a non-refundable protest fee, with the HOPE. The HOPE shall resolve the protest, strictly on the basis of the records of the BAC, within seven calendar days from receipt of the protest.

RA 9184 states that “up to a certain amount to be specified in the IRR, the decisions of the Head of the Procuring Entity shall be final.” The IRR, however, does not specify any amount to ascertain when the decision of the HOPE is considered final; it only states, albeit vaguely: “Subject to the provisions of existing laws on the authority of Department Secretaries and the heads of agencies, branches, constitutional commissions, or instrumentalities of the GOP (Government of the Philippines) to approve contracts, the decisions of the Head of the Procuring Entity concerned shall be final up to the limit of his contract approving authority.”

So, who is the “Head of the Procuring Entity”?

The answer to this question is vital because it determines the eligibility of the protesting bidder to proceed to the next remedy provided under RA 9184, which is judicial intervention.

JUDICIAL INTERVENTION UNDER RA 9184 AND REVISED IRR
Court action may be resorted to only after the protests contemplated in Article XVII of RA 9184 shall have been completed. Cases filed in violation of the process specified in the said article shall be dismissed for lack of jurisdiction.

Without prejudice to any law conferring on the Supreme Court sole jurisdiction to issue temporary restraining orders and injunctions relating to government infrastructure projects, RA 9184 confers on the Regional Trial Court jurisdiction over final decision of the Head of the Procuring Entity. Court actions shall be governed by Rule 65 of the 1997 Rules of Civil Procedure; Rule 65 refers to petitions for certiorari, prohibition, and mandamus.

HEAD OF THE PROCURING ENTITY
RA 9184 defines “Head of the Procuring Entity” as “(i) the head of the agency or his duly authorized official, for national government agencies; (ii) the governing board or its duly authorized official, for government-owned and/or-controlled corporations; or (iii) the local chief executive, for local government units.” The definition however has a proviso: “in a department, office or agency where the procurement is decentralized, the Head of each decentralized unit shall be considered as the Head of the Procuring Entity subject to the limitations and authority delegated by the head of the department, office or agency.”

There appears to be no issue on who the HOPE is in national government agencies, government-owned and/or-controlled corporations, and local government units, as it is specified in the law. The protesting bidder may resort to court action after the HOPE in such offices renders his decision, which is considered final, on the protest.

The determination of the HOPE in departments, offices or agencies where procurement is decentralized, however, poses a problem for a protesting bidder; this is true in procurements by bureaus and field offices of departments, offices or agencies, with regionalized procurements.

While RA 9184 says that the “Head of each decentralized unit” shall be considered as the HOPE, it also says that the “decisions of the HOPE shall be final up to the limit of his contract approving authority.” The law appears to require a determination of the contract approving authority of the HOPE, i.e., Head of the decentralized unit, under existing laws, before a protesting bidder may resort to court action from the HOPE’s decision.

This is no mean feat for a protesting bidder, who, with the limited time to seek judicial intervention, must first determine the limit of the contract approving authority of the HOPE before considering the latter’s decision on the protest “final”.

One likely source for such information may be the Administrative Code of 1987 (Executive Order No. 292), which provides for the limitations on the authority of particular departments or offices on certain contracts.

Other sources may be the laws creating particular offices or agencies of the government, rules and regulations, or other issuances on their authority. While RA 9184 refers to the Government Procurement and Policy Board (GPPB) as the repository of all information relating to government procurement, GPPB’s Web site can only hold so much information as may be made available to it by the departments, offices and agencies of the government.

If the contract approving authority of the HOPE is lesser than the project cost, i.e., Approved Budget for the Contract (ABC), RA 9184 suggests that a protesting bidder cannot resort to court action from the final decision of the HOPE, but must exhaust his remedies within the decentralized department, office or agency. This, unfortunately, is not clearly stated in RA 9184 and the IRR, which only vaguely suggest under Section 56 thereof, that “subject to the provisions of existing laws on the authority of Department Secretaries and the heads of agencies, branches, constitutional commissions, or instrumentalities of the GOP to approve contracts, the decisions of the Head of the Procuring Entity concerned shall be final up to the limit of his contract approving authority.”

This lack of clarity in the law certainly puts an unwitting bidder at a disadvantage. But then, there is no better recourse for a bidder to gain a chance of hope in his protest relating to government procurements than to know the HOPE.

(References: RA 9184 and its Revised IRR; Pipeline of Projects (ppp.gov.ph); DCCCII President Antonio F. dela Cruz, as quoted in BusinessWorld article “DoTC, PPA invited to local consultations on Sasa Port modernization”, June 22, 2015; BusinessWorld article “Biggest PPP deal to date lures firms”, July 16, 2015; Executive Order No. 292)

Myra S. Montecalvo-Quilatan is a Senior Associate of the Angara Abello Concepcion Regala & Cruz Law Offices (Davao Branch).

(082) 224-0996

msmontecalvo@accralaw.com

source:  Businessworld

Ayala Land wins ITS South auction

PROPERTY developer Ayala Land Inc. topped the auction for the P4-billion contract to build and operate an intermodal terminal near the Food Terminal Inc. (FTI) Complex in Taguig City.

Tuesday’s opening of bids for the multibillion-peso Integrated Transport System (ITS) South Public-Private Partnership deal saw Ayala Land seeking an annual payment of P277.89 million. This is significantly lower than Filinvest Land Inc.’s bid that sought a P1-billion yearly subsidy to build and operate the facility.

Transportation Undersecretary Jose Perpetuo M. Lotilla said his camp is still happy with the turnout of the bidding, despite the parties seeking annual grantor’s payment, instead of offering premiums, as in other auctions.

“The government welcomes the lowest bidder, because that is the amount that will be paid by the state. I think we have a good deal with the amount that they are charging,” he said after the auction activities.

It did not come as a surprise, however, as the first auction for this kind of project was also met with such  participation. Megawide Construction Corp. bagged the P2.5-billion ITS Southwest Terminal deal earlier this year, seeking an annual grantor’s payment of P100 million.

“It depends on their projections. Remember that under the terms, they are supposed to provide certain number of slots. If they have other enhancements in mind, it is possible that their project cost is higher,” Lotilla explained, referring to the design of the terminal.

The winning bidder will take care of the design, construction and operations, and maintenance of the terminal for a concession period of 35 years.

The multibillion-peso project covers the construction of a terminal within a 4.7-hectare lot on the FTI compound in Taguig. It will connect passengers coming from the South, specifically the Batangas and Laguna areas, to other public-utility vehicles that are serving inner Metro Manila.

It also covers the construction of arrival and departure bays, public information systems, ticketing and baggage facilities and park-ride facilities.

Sought for comment, Ayala Land Spokesman Alfonso Javier D. Reyes said his group is elated with the turnout of the auction.

“This is an important project for us because we’re developing Arca South, so we feel this a very strategic project and it’s a good project for the country to help declog Metro Manila; and so we’re very happy with the result of the bid today [Tuesday],”  he said in an interview.

Arca South is an integrated mixed-use estate.

It is estimated that up to 4,000 buses and 160,000 passengers will feed into ITS South from the South Luzon Expressway every day.

“We like to view it as part of the whole, as it is right beside Arca, it is very strategic,” Reyes said.

The transport agency aims to award the project sometime this August so construction can begin by May 2016. The terminal is set to open in October 2017.

source:  Business Mirror

Daang Hari-SLEX opens to motorists in July

MOTORISTS will be able to use the P2.01-billion Daang Hari-South Luzon Expressway (SLEX) link road starting July.

According to the Public-Private Partnership (PPP) Center website, the target date of commercial operation of the Daang Hari-SLEX will be in July, instead of this month.

It said the project was 96 percent complete as of May.

The Daang Hari-SLEX link, now known as the Muntinlupa-Cavite expressway (MCX), was awarded to Ayala Corp. through AC Infrastructure Holdings Corp.

Concessionaire Ayala Corp. will be responsible for the finance and construction of Segment I, while for Segment II it will be responsible for finance, design, and construction.

The project is a highway linking Cavite to Metro Manila through the SLEX and was the first contract auctioned off under the Aquino administration’s PPP scheme.

It involves the construction of a new four-kilometer, four-lane toll road from the junction of Daang Reyna and Daang Hari in Las Pinas/Bacoor, Cavite to SLEX through the Susana Heights Interchange in Muntinlupa, traversing the New Bilibid Prison reservation.

The proposed link-road will use the Susana Heights Interchange as exit and entry from north and south of SLEX, and will include the construction of a new bridge or widening of the existing bridge crossing SLEX as well as the expansion of the Susana Heights toll plaza.

The project is under the Department of Public Works and Highways (DPWH) and is a build-transfer-operate (BTO) contractual agreement with a concession period of 30 years.

source:  Manila Times



Daang Hari-SLEX link may open before Feb 2015 - Oct 07 2014  

VEHICLES may be allowed to use the P2.01-billion Daang Hari-South Luzon Expressway [SLEX] link road ahead of the expected completion of the project in February next year, Ayala Corp., the project contractor, said on Monday.

“Completion of the construction will be February [2015]. There [is] typically a lag in construction, completion and commercial operation. Kailangan mo pa ng [you still need] approval from the TRB [Toll Regulatory Board],” John Eric Francia, group head for Corporate Strategy and Development of Ayala Corp., told reporters.

“Hopefully, we would like to see that gap as little as possible,” he said, adding that they have the option to start allowing cars to use the Daang Hari-SLEX link road for free before the official opening.

“If you notice, that’s happened in Skyway, TPLEX [Tarlac-Pampang-La Union Expressway], that is the standard. Meron konting [There is a bit of] sampling. Hopefully hindi naman sobrang haba [it should not be too long]. We have to recover the investment also.”

The project is a highway linking Cavite to Metro Manila through the SLEX and was the first contract auctioned off under the Aquino administration’s public-private partnership (PPP) scheme.

It involves the construction of a new four-kilometer, four-lane toll road from the junction of Daang Reyna and DaangHari in Las Pin~as/Bacoor, Cavite to SLEX through the Susana Heights Interchange in Muntin lupa, traversing the New Bilibid Prison reservation.

The proposed link-road will use the Susana Heights Interchange as exit and entry from north and south of SLEX, and will include the construction of a new bridge or widening of the existing bridge crossing SLEX as well as the expansion of the Susana Heights toll plaza.

The project is under the Department of Public Works and Highways (DPWH) and is a build-transfer-operate (BTO) contractual agreement with a concession period of 30 years.

“We were able to go full blast in February [this year] because dun talaga na clear yung right of way on the SLEX side [that was when the right of way issue on the SLEX side was cleared],” he said, adding that it usually takes 12 months to build such a project from full blast.

The link road was originally due for completion in June this year but due to some problems, the target completion date was moved to December. It was moved again to early next year due to rains and flooding.

“But we’re of course pushing — if we get good weather and do all of these catch-up plans — December would have been a fighting target, given the strong rains and floods that were having. Unfortunately it’s too much of a stretch to expect that,” Francia said.

source:  Manila Times

SM Prime-Ayala Land tandem bags P10-billion Cebu City dev’t project

A CONSORTIUM of SM Prime Holdings, Inc. and Ayala Land, Inc. (ALI) won the bid to develop a portion of the South Road Properties (SRP) in Cebu City for P10 billion, marking the third partnership of the two real estate behemoths less than a year after burying the hatchet over a stake in the unlisted property holding firm of the Ortigas family.

The move of the Sy and Ayala families’ real estate companies to team up highlights the need for such cooperation to acquire prime land and boost operational efficiency as they target opportunities in the property market, analysts said.

In a joint statement attached to their disclosures yesterday, SM Prime and Ayala Land said SM-ALI Group consortium, which also includes the latter’s affiliate Cebu Holdings, Inc., will jointly develop the 26.34-hectare (ha) lot in the reclaimed 300-ha SRP area once a master plan is in place.

Yesterday, shares of SM Prime added 14 centavos or 0.71% to end P19.98 apiece, Cebu Holdings gained 10 centavos or 1.98% to P5.16 per share, while those of ALI dropped 35 centavos or 0.93% to P37.30 apiece.

JOINT MUSCLE
The consortium will combine the “financial muscle, technical expertise and the real estate experience” of the SM and the ALI group, the statement read.

“Ayala Land is pleased to have been awarded the 26-ha South Road Properties lot in Cebu, which we will jointly master-plan and develop with the SM group,” ALI President Bernard Vincent O. Dy said in a mobile phone message.

“We look forward to working with them on this project, which will be a mixed-use development in what we believe will be a major growth area in Cebu.”

SM Prime and ALI’s decision to work together can be viewed as a “strategic” decision to increase their operational efficiency at a time when prime lots are harder to come by, analysts said.

“Usually, we should see smaller developers partnering with big developers because one would need the expertise and scale of the other,” Julius Guevara, head of advisory services at Colliers Philippines, said in a mobile phone message.

“With these two major property developers joining together, this just shows that land is getting harder to acquire so we’ll probably see these kinds of transactions more and more.”

Claro dG. Cordero Jr., head of research and valuation at real estate advisory firm Jones Lang La Salle, said separately in a mobile phone message: “We can expect big property developers working together to raise the level of operational efficiency in order to create bigger value for the stakeholders of both companies, especially for the development of projects outside of the core business and investment areas.”

Fierce competitors in the areas of banking and real estate, the Sy and Ayala families decided work together following a decision to jointly manage and develop the Ortigas family’s OCLP Holdings, Inc. in November 2014 after a legal row that lasted two years.

Early this year, SM Prime and ALI teamed up with Megaworld Corp. and Aboitiz Equity Ventures, Inc. to form Trident Infrastructure and Development Corp. in vying for the P122.8-billion Laguna Lakeshore Expressway Dike Project -- one of the biggest infrastructure projects the Aquino administration has rolled out to date.

“With the closure of the agreement with Ortigas and the opportunity in Lakeshore, they have more experience with each other and -- going into this project -- they may have reached a certain comfort level,” Mr. Guevara said.

Miguel A. Agarao, analyst at Wealth Securities, Inc., noted in a telephone interview: “It’s too much to expect these companies to ally with each other moving forward, but in cases where there’s too much to be lost in competing, it’s better to ally.”

This latest development boosts the presence of both property firms in the booming Cebu real estate market.

The ALI Group has partnered with the Aboitizes for a 15-ha city center in Mandaue City, as well as with the Gaisano group to develop the latter’s 12-hectare property on Mactan Island into a leisure-oriented project.

SM Prime, on the other hand, is building the 30-hectare SM Seaside City in SRP and was awarded last month a 1,500-hectare reclamation project in the town of Cordova.

“This is definitely a positive development for both companies and the property industry as a whole since this shows that major developers are still bullish on the prospects of real estate,” Lexter L. Azurin, head of research at Unicapital Securities, Inc., said in a phone interview.

source:  Businessworld