CALAX rebid has factual, legal basis, says Palace

MANILA, Philippines - Malacañang maintained yesterday that any rebidding for the Cavite-Laguna Expressway (CALAX) would have factual and legal basis amid opposition from some business groups.

In a press briefing, Presidential Communications Operations Office Secretary Herminio Coloma Jr. said Executive Secretary Paquito Ochoa informed him that the matter was still pending “and whatever the final decision will be” would have ample justification.

During Wednesday’s annual presidential forum, President Aquino said the fundamental issue was that the bid documents submitted by San Miguel Corp. had a typographical error.

“The Department of Public Works and Highways asked for a clarification – a clarification by the ANZ Bank (Australia and New Zealand Banking Group) – and San Miguel itself stated that their bid security was good for 180 days as opposed to 176,” Aquino said.

And because the bid documents were returned to SMC and they opened them before the media, Aquino cited the company’s argument that their bid would have been over P20 billion, “if I remember it correctly, versus the winning bid of about P11 billion.”

“Now, if we accept the winning bid at this time when there is an allegation that there was a much superior bid, then we will have to explain to the people the P9-billion difference that we forego. We get the infrastructure; we get a premium of P20-billion allegedly from one bid, or an P11-billion premium from another bid. Now, at the end of the day, we have to protect the people’s interests,” Aquino said.

“Now, the proposal for government to actually undertake the project defeats the whole purpose of the PPP (Public-Private Partnership) project wherein to free our resources for other infrastructure needs. There are private sector individuals or companies that are willing to provide us the infrastructure we need and to deliver a premium to us. So how do we meet the attainment of the goal of getting the best deal for our people? So I am inclined to think that a re-bid will be the proper course of action on this particular issue,” he said.

A partnership between the Ayala Corp. and Aboitiz Land Inc. submitted the winning bid of P11.7 billion. SMC appealed to Malacañang.

Some business leaders said that would send a wrong signal.

So far, most of the criticism about the PPP program is about bidding delays, though the government says many of these delays are requested by potential bidders. The biggest disputes so far, over the Mactan-Cebu airport and Light Rail Transit-1 projects resulted in delayed awardings.

But not all business group leaders opposed a possible rebidding. “San Miguel was excluded from the bidding process technically and the government was shortchanged of a very substantial amount. If President Aquino decides to rebid it, I will go with him,” said Fred Yao, head of the Philippine Chamber of Commerce and Industry.

The tandem of Ayala and Aboitiz said there was no legal basis for an order to rebid the P35.4-billion CALAX, adding this could derail the government’s momentum for major infrastructure projects under the PPP program.

“We are very concerned with the Office of the President’s current inclination to pursue a rebid of the Calax project because of the severe negative impact this decision would have on investor confidence in the PPP program and on the integrity of the entire bidding process,” Team Orion said in a statement.

It pointed out that Malacañang had no legal basis to order a rebid as the process was conducted with transparency based on the Build-Operate-Transfer (BOT) Law.

It added that the tandem would not participate in the rebidding that would be conducted by the DPWH.

Team Orion said the government should award the proposed expressway to the highest complying bidder.

Team Orion submitted the highest bid of P11.659 billion followed by MP CALA Holdings Inc. of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) with P11.33 billion, and Malaysian-owned Alloy MTD Philippines with P922 million.

On the other hand, SMC’s Optimal Infrastructure Development Inc. was disqualified through a June 11 resolution issued by the bids and awards committee of the DPWH as its bid security was short of the 180-day validity period requirement.

The DPWH did not open the bid of SMC as it was disqualified from the bidding process. The diversified conglomerate opened its financial bid of P20.105 billion for the PPP project.

SMC filed a 37-page notice of appeal last June 27 and Malacanang issued a “stay order” last June 30 stopping the DPWH from implementing a June 11 resolution disqualifying Optimal Infrastructure from the bidding of the public.

In a separate statement, SMC’s Optimal Infrastructure said it was pushing for the awarding of the project as it submitted the highest bid of P20.1 billion or higher than Team Orion’s P11.6 billion.

“Our pending appeal is for Malacañang to declare our bid for the CALAX project as compliant and accept our P20.1 billion bid to get this vital infrastructure going. We support the position of Team Orion, who submitted a lower bid of P11. 6 billion that the project should be awarded to the highest bidder,” the company said.

“This huge undertaking will have a big impact on the country for many years to come and we believe government should have the best options available to it in order to make sure they get the best deal,” it added.