Business chambers buck proposal to rebid CALAX

MANILA, Philippines - Business chambers oppose a rebidding of the Cavite-Laguna Expressway (CALAX), saying this would have a negative impact on the country’s effort in improving its standing in the investor community.

In a joint statement issued yesterday, the Makati Business Club (MBC) and various chambers of commerce, said the Department of Public Works and Highways (DPWH) conducted a fair bidding for the project, in full compliance with the Build-Operate-Transfer (BOT) law.

“The proposed rebidding of the Cavite-Laguna Expressway (CALAX) would be an inopportune and ill-advised decision that would surely have a negative impact in our improving standing in the investor community,” said the chambers.   “As such, we believe 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 (Public-Private-Partnership) 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 statement added.

The chambers urged the government to remain consistent with the provisions of the BOT law.

“Not just in this particular case, but for the other projects in the pipeline,” said the MBC. “Consistency and predictability in policy and adherence to rules, among other factors, form the bedrock of investor confidence in any economy,” the groups said.

The statement was issued by the MBC along with the American Chamber of Commerce of the Philippines (AmCham); Australian-New Zealand Chamber of Commerce Philippines (ANZCham); Canadian Chamber of Commerce of the Philippines (CanCham); Employers Confederation of the Philippines (ECOP); European Chamber of Commerce of the Philippines (ECCP); Japanese Chamber of Commerce of the Philippines, Inc. (JCCIPI); Management Association of the Philippines (MAP).

Under the BOT law, a rebid of a project would only be done if there is a pronouncement of failure of bidding.

President Aquino recently said he favors a rebidding of the P35.4 billion CALAX project “to get the best deal for the people.”

During the bidding for the project conducted in June, Team Orion, a joint venture between Ayala Corporation and Aboitiz Land Inc., emerged with the highest bid of P11.66 billion, higher than the offer of P11.33 billion submitted by MP CALA Holdings Inc. of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC), and the P922 million bid of Malaysian-owned Alloy.

San Miguel Corporation’s (SMC) Optimal Infrastructure Development Inc. was disqualified from bidding due to a defect in its bid security. Following its disqualification, OIDI revealed in a news conference that it offered P20 billion for the project.

SMC had appealed its case to the Office of the President, asking the government to reconsider its disqualification. Team Orion, on the other had, has filed a motion urging President Aquino make a to decision if it would accept or dismiss SMC’s appeal.

Fund managers and think tanks have warned that a rebid of the project could derail the momentum of the Aquino administration’s PPP program.