San Miguel confirms interest in SCTEX

MANILA, Philippines – Conglomerate San Miguel Corp. (SMC) has confirmed its interest in acquiring government’s stake in the Subic-Clark-Tarlac Expressway (SCTEX), sources from the state-run Bases Conversion Development Authority (BCDA) said.

SMC, which has diversified its business interests to include a stake in power retailer Manila Electric Co. (Meralco), oil refiner Petron and Liberty Telecom, earlier revealed it was also in talks with local consortium DMCI Holdings for a possible participation in the Tarlac-La Union Toll Expressway (TLUTEX) project.

SMC has likewise signified interest to enter the water sector via the development of the Laiban Dam in Tanay, Rizal.

Aside from SMC, Metro Pacific Tollways Corp. (MPTC), which has a stake in the North Luzon Expressway (NLEX), has also indicated interest in the 93.77-kilometer SCTEX that runs through the provinces of Bataan, Pampanga, Tarlac, and Zambales.

Sources from the BCDA told The STAR that SMC wants to enter into a joint venture with the agency. BCDA, which owns the project, financed the construction of the tollroad through a P22-billion loan from the Japan Bank for International Cooperation (JICA).

A problem, however, could likely arise since the JICA loan provided for very concessional terms being a government project. “We are open to the possibility of selling a stake in SCTEX but we do not know how this would impact on the JICA loan,” a BCDA official said.

The Tollways Management Corp. (TMC), partly owned by MPTC, currently operates SCTEX as well as the North Luzon Expressway (NLEX). The Manila North Tollways Corp. (MNTC), another Metro Pacific subsidiary, holds the concession for NLEX.

Meanwhile, the 10-member consortium, composed of big players in the local construction industry led by DMCI, will oversee the design, construction, financing and operations of the 88.5-kilometer, P15 billion TLUTEX project.

The expressing  will extend from La Paz, Tarlac to Rosario, La Union, and is expected to lessen the travel time between Central and Northern Luzon. It will have eight interchanges, nine toll plazas, two operating buildings, 20 bridges, two viaducts, 26 overpasses and three farm crossings.

Partial operations will start in January 2010 for the Tarlac-Carmen section, in January 2011 for the Carmen-Urdaneta stretch, and in March 2013 for the Urdaneta-Rosario segment.

According to DMCI Holdings president Isidro Consunji, SMC is eyeing majority stake of up to 51 percent in TLUTEX and is conducting due diligence on the project.

“I think SMC is interested in getting 49 percent, with an option to go up to 51 percent,” he said.

Apart from DMCI, also joining the venture are First Balfour Inc., DM Wenceslao and Associates Inc., CM Pancho Construction Inc., RD Policarpio and Co. Inc., JV Angeles Construction Corp., JE Manalo and Co. Inc., New Kanlaon Construction Inc., EEI Corp. and Rockford Development Corp.

Consunji said the possible entry of SMC in TLUTEX will give a financial boost to the project. “We were looking for additional equity and coincidentally, [SMC] were looking for investments,” he said.

TLUTEX—to be undertaken via the build-transfer-operate (BTO) scheme with the Philippine government — is a four-lane toll road project to be built in two phases.