MNTC won’t honor SCTEX price challenge result if not based on BOA

MANILA, Philippines - Manila North Tollways Corp. (MNTC), a unit of infrastructure giant Metro Pacific Investments Corp. (MPIC), said it would not honor the result of the price challenge being undertaken by the Bases Conversion and Development Authority (BCDA) for the 94-kilometer Subic-Clark-Tarlac expressway (SLEX).

MNTC president Rodrigo Franco said the price challenge for the country’s longest toll road should be undertaken based on the business operating agreement (BOA) signed more than three years ago.

“If we believe their process is not in accordance with our agreement, we have the option of not honoring the result of the price challenge. If they don’t follow the terms of the agreement and they unilaterally conduct the price challenge, the process result may not be binding,” Franco said.

MNTC and BCDA signed a BOA on four-lane SCTEX in 2011, subject to the approval of the President. Under the agreement, MNTC would operate and manage SCTEX for 33 years. On the other hand, BCDA would be relieved of payment of the P34-billion debt to the Japan International Cooperation Agency (JICA) for the construction of the tollway.

However, Malacañang has ordered the price challenge for the SCTEX maintenance and operations management in the interest of transparency.

MNTC earlier threatened to sue the government if the impending privatization of the operations and maintenance of SCTEX is not conducted in a transparent and fair manner.

The MPIC unit sought an audience with BCDA president Arnel Casanova to discuss the Terms of Reference (TOR) for the price challenge.

“If the price challenge proceeds without an agreement on the provisions of the Terms of Reference and without a common understanding that the BOA will be the basis of the contract for the price challenge, the validity of the exercise may be questioned and MNTC will be compelled to exercise its legal options,” Franco earlier said.

According to Franco, the price challenge is necessarily connected to the BOA following the bidding for BCDA’s selection of a private sector partner for the privatization of the SCTEX in 2009.

MNTC has also asked the BCDA to immediately convene to discuss the necessary amendments to the BOA as well as the terms, conditions, procedure and timetable for the price challenge.