Metro Pacific expects 33% revenue hike

MANILA, Philippines - Metro Pacific Tollways Corp. (MPTC) expects a 33 percent growth in revenues this year given higher toll rates and its takeover of Subic-Clark-Tarlac Expressway (SCTEX) by the second quarter of this year.

MPTC president Ramoncito Fernandez said that from P5.86 billion in 2010, the company’s revenue is seen increasing to P7.8 billion this year.

The tollway firm posted revenues of P5.86 billion in 2010 on account of higher average daily vehicle entries and longer average journeys during the period.

MPTC was allowed to raise toll rates by 12 percent effective Jan. 1, which is expected to offset the expected decline in volume this year due to high fuel prices.

MPIC chief financial officer Christopher Lizo said traffic was growing in the first two months of the year but it went flat in March due to an increase in fuel prices.

“If fuel prices remain high, we expect this year to be challenging in terms of meeting our target volume. But with toll rate increase, the slowdown in traffic will be compensated by the increase,” Lizo said.

MPTC is expecting to ink soon a concession agreement with the Bases Conversion Development Authority (BCDA) that will allow the group to take over the management, operation, and maintenance of SCTEX, the country’s longest expressway.

Fernandez earlier said the Office of the Government Corporate Counsel (OGCC) has already given the go-signal for BCDA to enter into the agreement with MPTC. “We expect the closing of the negotiations and the turnover of SCTEX to us soon,” he said.

MPTC wholly owned subsidiary Manila North Tollways Corp. (MNTC) was earlier awarded by the BCDA the right to negotiate a 25-year concession agreement for SCTEX.

Fernandez explained that it is a requirement for any government agency entering into such an agreement with the private sector to get the go-signal from the OGCC.

Once the agreement is signed, BCDA will assign to MPTC’s flagship unit, Manila North Tollways Corp. (MPTC) the concession over the 94-kilometer SCTEX.

As the SCTEX concessionaire, the MNTC will be responsible for, among others, the overall management and supervision of the tollway; management of the toll operations center, toll plazas, and all other related ancillary facilities and equipment.

MNTC will also provide appropriate resources to run the toll operations, implement a traffic safety and security management program for the entire stretch of the tollway on a 24/7 basis, set up an adequate patrol system for the whole stretch of the tollway on a 24-hour basis as well as provide for an emergency response and incident management on a 24-hour basis in coordination with appropriate law enforcement agency. The maintenance of greenery and landscaping along the tollway is also part of its responsibilities.

The SCTEX contract requires MNTC to pay BCDA a semi-annual concession fee amounting to the peso equivalent of the yen-denominated debt service requirements of the project for the 2010 to 2016. SCTEX was funded from a loan from the Japanese government.

Fernandez said the new concession shall add 94 kilometers to MPTC’s toll road portfolio without construction risk and shall enable the group to secure a long-term operation and management contract for the toll road.

MNTC was formerly owned by the Lopez Group through its infrastructure arm: the First Philippine Infrastructure Development Corp. (FPIDC). MPIC later bought FPIDC, making MPIC the majority owner of MNTC. The other MNTC shareholders are: Egis Projects S.A. of France, the world’s biggest tollways operator; Leighton Asia Ltd. Of Australia, a civil works specialist with an extensive track record in toll road construction; and Philippine National Construction Corporation (PNCC), the state-owned company that holds the franchise for the operation of the expressway.

MNTC is the builder and concessionaire of the 84-km North Luzon Expressway (NLEX). MPTC officials earlier said the group’s taking over SCTEX will allow them to seamlessly connect the operations of the latter with NLEX.

Fernandez said an integration plan is under way to allow a seamless expressway travel using NLEX and SCTEX.

Fernandez also noted that MPTC is also expanding its portfolio through acquisition of shares in other toll road concessionaires.

“Among several prospects, we have increased our stake in Citra Metro Manila Tollways Corporation, the concession holder for the Metro Manila Skyway. We have also expressed interest to acquire a stake in South Luzon Tollway Corporation, the concessionaire for the SLEX,” he revealed.