SMC weighing viability of P35.4-B CALAX project

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) is carefully studying the viability of the proposed P35.4-billion Cavite-Laguna Expressway scheduled to be auctioned by the Aquino administration on Monday.

SMC president and chief operating officer Ramon S. Ang said the company, through Optimal Infrastructure Development Inc., is still running the numbers to ensure the viability of the Public-Private Partnership (PPP) project.

 â€œIf the project is viable we will submit. If not, we might again back out in the last minute. Most likely we will try our best to make it work,” he stressed.

SMC, through SMC Infra Resources Inc., backed out in the last minute during Wednesday’s bidding for the P65-billion Light Rail Transit Line 1 (LRT 1) Cavite extension project.

Ang said earlier SMC was all set to submit a bid for the Aquino administration’s largest PPP project last Wednesday but decided on the last minute to back out.

 â€œWe were really serious in joining. In the last minute, while running the computation, the figures did not pass our hurdle rate,” he pointed out.

Aside from  SMC, other companies that did not submit their bids last Wednesday to the Department of Transportation and Communications (DOTC) included Filipino-owned Megawide Construction Corp., Spanish-owned Globalvia Inversiones SAU, Eco Rail Services Inc. of businessman Reghis Romero II, and Malaysian-owned MTD Philippines Inc.

The DOTC pushed through with the bidding Wednesday despite receiving a lone bid from the tandem of infrastructure giant Metro Pacific Investments Corp. (MPIC) and conglomerate Ayala Corp. - Light Rail Manila Consortium.

The lead member of the group is MPIC Light Rail Corp. with 55 percent while other members include Ayala’s AC Infrastructure Holdings Corp. with 35 percent and Macquaire Infrastructure Holdings ( Philippines ) Pte Ltd. with 10 percent.

The Department of Public Works and Highways (DPWH) has given four prequalified bidders until Monday to submit their bids for the 47-kilometer closed-system tolled expressway that would connect the South Luzon Expressway (SLEX) and the Manila Cavite Tollroad Expressway (Cavitex).

Aside from SMC, other prequalified bidders include the Ayala-led Team “Orion”, MPCALA Holdings Inc. of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC), and Malaysia ‘s Alloy MTD Philippines.

Major revision to the guidelines requires bidders to submit a bid in the form of the viability gap funding (VGP) or subsidy not to exceed P5 billion or the bid that would be paid to the government as concession payment.

This was in sharp contrast to the original guidelines wherein the basis of the bid was the toll fee per kilometer for Class 1 vehicles in 2018.

 â€œThe amount the bidder requires from the VGP, which shall be from 0 to a maximum amount of P5 billion; or the amount which the bidder shall pay the DPWH as concession payment, if the bidder does not require any amount from the VGF,” the DPWH stated in the revised provision.

In case of bids in the form of concession payments, the agency said it would not impose a ceiling to the amount to be submitted by the bidders.

Under the revised guidelines of the DPWH, bidders who would offer a premium instead of asking for a subsidy would likely win the PPP project.

The four-lane expressway starting from the Cavitex in Kawit, Cavite and end at the SLEX-Mamplasan Interchange in Biñan, Laguna would have a concession period of 35 years, including design and construction of four years.

This is the third PPP expressway project of the DPWH bid out under the Aquino Administration. The first was the P2-billion Daang Hari-SLEX link project scheduled for completion by June next year while the second is the ongoing P15.5-billion Ninoy Aquino International Airport (NAIA) expressway project.