MPIC keen on PPP

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) is still keen on pursuing infrastructure projects via the Public-Private Partnership (PPP) program of government despite delays in the commencement of the program.

MPIC chairman Manuel V. Pangilinan said that aside from the operation and maintenance of the Metro Rail Transit Line 3 (MRT 3) and Light Rail Transit Line 1 ( LRT 1), they remain interested in planned PPP projects such as the development of Clark airport, the operation of the NAIA terminals, various road projects, such as CALA and Daang Hari, among others.

MPIC and San Miguel Corp. (SMC) are among eight private companies that will bid for the right to construct the multi-billion-peso Daang Hari-South Luzon Expressway (SLEX) project under the government’s PPP program. The Daang Hari Road connects Las Piñas to neighboring Bacoor Muntinlupa City, and San Pedro in Laguna.

Meanwhile, the group is currently awaiting approval by the Office of the President of the supplemental toll operation agreement (STOA) for the Subic-Clark-Tarlac Expressway (SCTEX) which MPIC-subsidiary Manila North Tollways Corp. (MNTC) will be operating after being awarded the contract by owner Bases Conversion Development Authority (BCDA).

MNTC, which operates the North Luzon Expressway (NLEX), plans to implement a seamless connection between NLEX and SCTEX, including the payment of toll fees.

Under the revised business and operations agreement with the BCDA that built the toll road, MNTC will operate and manage SCTEX for 33 years while relieving BCDA of the heavy financial burden of paying the latter’s debt to the Japan International Cooperation Agency (JICA). The JICA loan used to construct SCTEX will mature in 2041.

MNTC also plans to spend about P300 million to integrate the Subic-Clark-Tarlac Expressway (SCTEX) to NLEX about 12 months from takeover.

MPIC is also awaiting action from government, particularly the Department of Transportation and Communications (DOTC), on its proposal for an equity investment in Metro Rail Transit Corp. (MRTC) and for some element of debt purchase, Pangilinan said.

“DOTC has said in the past that our proposal is already being considered. They presented it to the Office of the President and we are just waiting for a decision,” he said.

MPIC now owns majority of MRTC after acquiring the stake of the Sobrepeña group and other private shareholders. It has proposed to buy out the remaining minority stake of government in MRTC.

Meanwhile, the DPWH has given MPIC’s wholly owned subsidiary Metro Pacific Tollways Corp’s unsolicited proposal to undertake the NLEX-SLEX connector road project an original proponent status.

“Our proposal will be subject to a Swiss challenge. They are preparing the terms of reference for this,” Pangilinan said.

MPTC will be asked to pay a “right-to-use” fee for utilizing government-acquired rights of way for the connector road project.

“We don’t have any problem with that so long as they will allow us to recover these additional costs from the toll fees,” he said, as he sought “flexibility” in the determination of tariff rates for the connector road project.

MPTC president Ramoncito Fernandez earlier explained that according to the Justice Department, ownership of the connector road and improvements will not only be returned to government after the concession period, but MPIC will have to pay some sort of “right-to-use” fee or lease to use the rights of way acquired by government for the project.

Pangilinan said that the right-of-way cost for the connector road project from McArthur Highway in Valenzuela in the north to Buendia Ave. in the south is about P7 billion.

Pangilinan said that if MPTC will absorb the cost for securing the right-of-way, that would mean an increase in the project cost for Segments 9, 10 and 11 from P27 billion to P34 billion (of which P17 billion is for the connector road and P7 billion for the right-of-way).

The connector road is a 13.5 kilometer project that was granted original proponent status by the DPWH based on MPTC’s unsolicited bid. It will connect NLEX to SLEX via an elevated road over the tracks of the Philippine National Railways (PNR) and will run from Valenzuela to Buendia.

Fernandez said that the right-to-use fee will not apply to the existing PNR right of way, but rather to the additional ones that will have to be acquired by government such as those for the ramps.

“We will have to negotiate with DPWH on the amount of this right-to-use fees but it will definitely not be equivalent to the value of the expropriated property since we will in effect just lease them,” he said.

Fernandez said that the right-to-use concept may apply only to the connector road project since it is an unsolicited proposal.

MPTC is also currently working with government for the acquisition of rights-of-way for Segment 9 or the Harbour Link (connecting Valenzuela to the Harbour area in Manila). MPTC has also signed a memorandum of understanding with PNR and North Luzon Railways Corp. (Northrail) to coordinate on the design of the second half (Segment 10) of the Harbour Link which is going to be elevated over their tracks.