THE infrastructure arm of San Miguel Corp. (SMC) will participate in the rebidding of the P35.42-billion Cavite-Laguna Expressway (Calax) project, should President Aquino decide to pursue what industry leaders tag as a “distasteful prospect.”
Optimal Infrastructure Development Inc. said it will honor the decision of the President on the issue, and will continue to pursue to win the much-coveted thoroughfare-construction contract.
“We vow to participate in case of a rebid—whether the original terms of reference are altered or retained,” the unit of SMC said.
The group will also continue to support the government’s key infrastructure thrust, which has more than 50 projects in the pipeline, amounting to roughly P1 trillion in needed investments.
“Optimal Infrastructure will continue to join government biddings for vital infrastructure projects in line with San Miguel Group’s commitment to nation-building,” the camp of businessman Ramon S. Ang said.
Mr. Aquino is soon expected to rule on the petitions of the food-to-infrastructure company and Team Orion, a consortium led by Ayala Corp. and Aboitiz Land Inc.
He will decide whether to award the project to either of the two groups—with Team Orion as the highest complying bidder, and Optimal Infrastructure supposedly offering a P20.1-billion premium that comes with a defective bid security, thus its disqualification—or to stage a rebidding.
President Aquino earlier announced his inclination to rebid the deal, citing a conundrum on the bids, as SMC’s proposal was P8.5 billion higher than that of Team Orion, which offered an P11.6-billion premium that goes on top of the project cost.
The camp of conglomerate Ayala and property developer Aboitiz Land said it is open to the prospect of losing the bid to Optimal Infrastructure. However, this raises the question of the President’s and the Public-Private Partnership (PPP) Program’s integrity.
“Should the President decide to grant Optimal Infrastructure’s appeal, Team Orion will respect such decision and commits to abide by it without legal recourse,” the group said.
Business groups and foreign chambers warned the President that his cornerstone infrastructure thrust stands to lose its title as one of the best programs around the globe due to the possible rebidding of the multibillion-peso expressway.
Rejecting three complaints bids received during the auction for the P35.42-billion thoroughfare deal would tinge the formidable name of the PPP Program, a phenomenon that would make the private sector more reluctant to investing in the government’s thrust in pursuing key infrastructure projects.
This was the warning of five international chambers and three local business groups, which tagged the possible rebidding as “ill-advised.”
“The proposed rebidding of the Cavite-Laguna Expressway would be an inopportune and ill-advised decision that would surely have a negative impact on our improving standing in the investor community,” local and foreign businessmen said in a statement.
They noted that the Department of Public Works and Highways (DPWH) bidded out the deal “with complete transparency and fairness,” and in full compliance with the build-operate-transfer law.
“As such, we believe that there is no legal basis for rebidding the project. We share the concern of our colleagues in the private sector that a disregard of the present rules through a rebid will adversely impact investor confidence in the PPP Program and in our bidding procedures, which the DPWH and the PPP Center have been painstakingly reforming for the better, and consequently promoting here and abroad,” the businessmen added.
The deal has been in limbo for four months now owing to a petition for reconsideration filed by the disqualified bidder.
Optimal Infrastructure was disqualified from the bidding owing to a defective bid security, which was a few days short of the required cover period.
San Miguel asked President Aquino, who is the nephew of SMC Chairman Eduardo Cojuangco Jr., to declare its bid compliant and accept the offer to finally get the construction going.
But despite the uproar from business groups, Palace Spokesman Edwin S. Lacierda signaled that the DPWH is already setting up a date for the new tender.
He told the BusinessMirror that a date has yet to be determined for the rebidding.
The project is a 47-kilometer highway that would start from the Manila-Cavite Expressway in Kawit, Cavite, and end at the South Luzon Expressway (Slex)-Mamplasan Interchange in Biñan, Laguna. It would consist of nine interchanges and a toll barrier before the Slex.
The third PPP project under the DPWH, the expressway is seen to decongest traffic on the Cavite-Laguna road network.
Construction of the multibillion-peso expressway is seen to start by October next year. It is expected to be completed by September 2017.
Since the infrastructure program’s inception in 2010, the government has awarded eight contracts so far. These are:
- the P1.96-billion Daang Hari-Slex project, bagged by
Ayala Corp. in 2011; - the P16.42-billion first phase of the PPP School Infrastructure Program, which went in 2012 to the consortium formed by Megawide Construction Corp. and Citicore Holdings Investment Inc., as well as the BF Corp.-Riverbanks Development Corp. Consortium;
- the P15.68-billion Ninoy Aquino International Airport expressway, given to SMC unit Vertex Tollways Development Inc. in 2013;
- the P3.86-billion PSIP Phase II contract, partially awarded last year to Megawide and the BSP & Co. Inc.-Vicente T. Lao Construction consortium;
- the P5.69-billion modernization of the Philippine Orthopedic Center project, which went to the Megawide-World Citi Inc. consortium also last year;
- the P1.72-billion Automatic Fare Collection System contract, awarded to the AF Consortium of Ayala and Metro Pacific Investment Corp. in January;
- the P17.5-billion Mactan Cebu International Airport New Passenger Terminal project, bagged in April by Megawide Construction Corp. and GMR Infrastructures Ltd.; and
- the P64.9-billion Light Rail Transit Line 1 Cavite Extension deal, awarded in September to Light Rail Manila Consortium of Ayala and MPIC.
The administration aims to sign at least 15 contracts by the time President Aquino steps down from office in 2016.
Image credits: Goh Seng Chong/Bloomberg