THE four parties that participated in the original auction for the P35.42-billion Cavite-Laguna Expressway (Calax) deal have given mixed signals over their participation in the rebidding of the contract.
While the groups of businessman Manuel V. Pangilinan and tycoon Ramon S. Ang signified their interest to participate in the fresh tender of the deal, Team Orion of the Ayala and Aboitiz groups and MTD Philippines Inc. announced their disinterest in joining the rebidding.
Metro Pacific Investments Corp. renewed its bid bond—a security that guarantees the financial capacity of a company—for the contract’s auction, signaling the interest of the group to join the tender anew.
“Yes, we renewed our bid bond. We want to play it safe. But we want to see the terms first before confirming our participation,” Metro Pacific Tollways Corp. President Ramoncito S. Fernandez said in an interview.
He added that the group needs to thoroughly review the contract before it confirms its position in the rebidding.
“We would like to wait for the final terms for the rebid before we decide if we want to join the rebidding or not. There is no decision yet on the increase in offer,” Fernandez said, referring to the group’s P11.33-billion premium proposal for the contract.
The group, he said, is also weighing the integrity of the auction, itself.
“It is also a principle decision: we joined the bidding, then they will not honor the results. So we will have to discuss between us and our shareholders if we would like to rejoin the bid or not,” the executive pointed out.
San Miguel Corp. (SMC), meanwhile, is firm in its position that it will join the fresh tender for the much-coveted infrastructure project.
When asked if his firm is interested in participating in the fresh tender, SMC President and COO Ramon S. Ang simply replied: “We will join all government bids.”
The Team Orion of Aboitiz Land Inc. and AC Infrastructure Holdings Corp., meanwhile, expressed its distaste for the decision of the Office of the President to rebid the deal.
“However, in the interest of national progress, Team Orion will not stand in the way of the Calax rebid,” the group said, referring to the possibility of bringing its battle to the Supreme Court.
The consortium called on the government to ensure that it will maximize the auction economically, challenging it to get bids bearing more than P20 billion in premium.
“We expect the rebidding to be conducted swiftly, above board and in line with established bidding procedures in order to ensure that the government obtains the P20 billion it had assumed to gain,” Team Orion said, referring to the amount that the government hopes to receive in premium.
Team Orion emerged as the front-runner during the auction, submitting an P11.66-billion premium to win the deal.
MTD Philippines President Isaac S. David, meanwhile, said his firm did not renew its bid bond, given that the government’s terms—as reflected by its choice of rebidding the deal—would entail an extremely large premium requirement.
“We are unsure and it doesn’t make sense for us to bid again. It’s as if the government is asking us to bid for more than P20 billion in premium,” he said.
However, the firm will still review the deal’s amended terms of reference, once the public works agency completes the final details of the fresh auction. “If it makes sense to us and if it is based on international practice, we might take a look at the project again,” David noted.
He lamented that the government is risking the public interest for its apparent thirst for higher offers, as this would entail the passing over of the brunt to the consumers. “In the end, the winning bidder will have to see returns for its premium. It will be passed over to the public, to the consumers. It will be the users of the infrastructure who will suffer,” David pointed out.
President Aquino decided on Wednesday last week to put the contract to a fresh auction, as this would result in more revenue gains to the government.
His decision was in response to the petition of Optimal to accept its P20.1-billion premium offer, which was disqualified due to certain technicalities.
This move placed the deal in limbo for four months, with Team Orion separately urging the Executive to award the deal to the rightful winner.
Rebidding the project calls for the rejection of all compliant bids, including those of the two other bidders.
Under the build-operate-transfer law, the government is required to declare an auction as failed before the implementing agency could conduct a fresh tender.
Business groups, led by the Makati Business Club, earlier warned President Aquino that his Public-Private Partnership Program’s good name may lose its credibility due to inconsistencies in rules and a violation of the law.
But the Philippine Chamber of Commerce and Industry, the largest business group in the Philippines, backed Mr. Aquino’s decision, as this would maximize the economic benefits of the state from the bidding.
PCCI President Alfredo M. Yao said the government stands to gain at least P8.45 billion more from the fresh tender, as premium bids to build the thoroughfare would start from the floor price of P20.1 billion.
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After the government got its 20B premium for the project, the business man put a high toll fee since they need to recuperate their capital. And of course, let’s not forget that this is business, not charity and definitely not the dole-out government that everyone seems to think they are. Once the toll is set, the public will be in outrage for the price. They will go to the SC and get a TRO or a mandate from the toll board to lower the toll. The business man will agree but in return would want a longer contract so they can at least have time to increase the toll fee to get back the losses and still possibly profit from the business. The masses are angry with the business man for putting a high price on the usage of the road. The retail stock holders are angry with the business man for giving lousy profit and low dividends since it would take several more years for the project to ROI.
It’s a cycle that all started from the greediness of the government. Nobody bothered to remember that the toll road is a business proposed by the government to the private sector telling them that they will profit from it.