The appetite of Metro Pacific Investments Corp. (MPIC) for the administration’s key infrastructure deals remains the same, despite the government’s decision to put the contract for the operation of the longest toll road in the Philippines to a price challenge.
MPIC Chairman Manuel V. Pangilinan confirmed that his company received an advice from the Bases Conversion and Development Authority (BCDA) that President Aquino is inclined to get a higher offer for the Subic-Clark-Tarlac Expressway (Sctex) deal.
“It’s official; so the process of the price challenge has started. We are in dialogue in respect to the terms of reference,” he said. The conglomerate was left with no choice but to follow what the government believes is the best for the deal. Despite that, Pangilinan said his group is willing to put off any emotional attachment to the decision. “We are just dealing with the situation as it is,” he said.
This decision, however unfavorable to the group, will not dampen the company’s appetite for the government’s Public-Private Partnership (PPP) Program. “We will still look at other projects,” the businessman said.
Under a price challenge, another company may offer a higher concession fee. This means that the government may get a better deal, should the group of Pangilinan decide to match the challenge price.
Earlier, Metro Pacific Tollways Corp. President Ramoncito S. Fernandez called the plan to subject the deal under a price challenge as “grossly unfair and without legal basis.”
He noted that the deal was a solicited project, with the bidding conducted aboveboard.
Manila North Tollways Corp. (MNTC) bagged the Sctex contract during the Arroyo administration, but the Aquino administration suspended the deal on concern about the revenue-sharing scheme.
Under the original terms of the contract, state-run BCDA shall assign to MNTC the management, operations and maintenance of Sctex, as well as the government agency’s rights in the toll operations agreement, including the right to collect toll revenues for 25 years, renewable for another eight years.
MNTC, which operates the SCTEx and the North Luzon Expressway, had proposed a 50-percent revenue- sharing scheme, which the Department of Finance endorsed to President Aquino for approval last year.
In November 2012 MNTC raised the BCDA’s revenue share to P90 billion from the original proposal of P64 billion. MNTC also provided a longer period—from the earlier endpoint of 2016 to the new schedule of 2019 —within which the company would subsidize payment of the BCDA’s existing P31-billion debt to the Japan International Cooperation Agency. The loan, which was used to build the Sctex, will mature in 2041.