Things looking bright for PNCC

Reports from the business front note increased interest in the stock of the Philippine National Construction Corp. or PNCC following disclosures of a tough corporate restructuring program.

The disclosure itself is a brief document, citing efforts to settle PNCC’s huge debt burden, downsize its workforce, and cut back on other corporate expenses. But, coupled with its presentation to Congress, which is soon set to approve extension of PNCC’s s legislative franchise, and a series of positive news reports from funding agencies and its joint venture partners, it is not surprising why the business community is once more bullish about the government-controlled, public-listed firm.

Many in the business community credit the turnaround to PNCC chairman Art Aguilar. Many are not surprised. Those in the media who had covered Art in the sugar industry beat, especially during this time as head honcho of Victorias Milling Corp., know how hard-working he is.

The business community will remember VMC as that giant sugar concern brought to its knees by big-time corporate anomalies. From being the country’s most powerful sugar concern, VMC became bankrupt with its former leadership having to surrender authority to a creditor combine. That was when Aguilar came in, as one of those who slowly, painfully turned around VMC, by ushering in a regime of austerity and paring down the giant conglomerate to its core business.

What was interesting was how Aguilar, a low-key  executive, managed to work in relative harmony with VMC’s militant unions, paving the way for a rational reduction in workforce even as he put order to financial operations.

At the PNCC, Aguilar’s entry managed to halt a disaster, although business analysts note that major challenges remain.

For now, it is imperative that Congress renews the company’s franchise to supervise the country’s major expressways. PNCC, for its part, has worked hard to make joint venture partners get their acts  together. The buzz is, commuters will finally see the fast tracking of the rehabilitation and expansion of the South Luzon Expressway. This will have two components: first, the Alabang Viaduct to Calamba, Laguna and the Star Tollways interconnection, from Calamba to Sto. Tomas, Batangas.

With a new franchise, the PNCC can push through with its infrastructure timetable and eventually interconnect express toll roads of Northern Luzon, from Carmen Rosales, Pangasinan and Nueva Vizcaya (through Bulacan, Pampanga and Nueva Ecija) and, in the south, the SLEX extension to Lucena, Quezon.

That is going to mean a great deal to the country’s economic growth, especially in the countryside of Luzon, where distribution of agriculture products and the manufactured goods of the special economic zones has long awaited improvement. And in Metro Manila and its environs, the strengthening and widening, from six to eight lanes, of the Alabang viaduct will surely lead to savings in man-hours and other production overhead costs.

Business analysts note that Calabarzon would be the first to benefit from the SLEX project and, they forecast another wave of investments to the fast-growing development zones. But the real interest now is in the interconnection of the North Luzon Expressway with the SLEX, opening both ends of the country’s major island to the benefits of increased business and investment mobility.

Already, the NLEX joint venture with the Manila North Tollways Corp is already being touted as a model in infrastructure development. There is very little traffic now along the toll exits from Balintawak to Dau; travel time from Bulacan to Manila now takes less than an hour. Despite the increase in toll rates, analysts acknowledge that savings in gasoline and maintenance costs and man hours more than compensate for the added expense in using the modernized expressway.

There has been some funny developments on the franchise front, which a businessman is reportedly trying to derail. This businessman has been very vocal about his interest in having PNCC fail in its franchise extension bid because, he believes, this will force the government to bid out the PNCC’s operations in several components. But that could prove disastrous in the medium and long terms as a gaggle of private interests (including those feuding with each other) could sabotage National Government’s interconnectivity dreams. PNCC is needed to oversee all this.

Worse, in the event of non-extension of PNCC’s franchise, Congress will have to approve all those separate component franchises. Can you imagine how long that will take? While the process twists and turns in the wind, antsy creditors are sure to foreclose on PNCC even as ongoing projects may be paralyzed.

Will I bet Aguilar’s track record for this potentially devastating scenario? All for the personal interest of one businessman? For now, the business community is backing Aguilar.

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