PCCI backs CALAX rebid

MANILA, Philippines - The country’s largest business organization, the Philippine Chamber of Commerce and Industry (PCCI), is supporting a rebidding of the P35.4-billion Cavite-Laguna Expressway (Calax) project which it said is seen to provide economic gains.

In a statement yesterday, the PCCI said it favors the rebidding of the Calax to maximize economic gains from the project.

The proposal is being put forward as Optimal Infrastructure Development Inc. of San Miguel Corp. (SMC), which offered P20.1 billion for the project, was disqualified during the June bidding due to a defect in its bid security.

SMC’s bank ANZ issued a bid security check short of the 180-day requirement, with the security valid only until Nov. 25, 2014 instead of the required Nov. 29, 2014.

PCCI said this was a minor technicality that should not lead to disqualification as it would deprive the government of the P8.45 billion difference between SMC’s offer and the winning bid of Team Orion, the joint venture between Ayala Corp. and Aboitiz Land Inc., amounting to P11.66 billion.

It noted that government stands to gain at least P8.45 billion from the rebidding with offers for the project to begin at a floor price of P20.1 billion or the highest offer given during the previous tender.

The PCCI said the P8.45 billion to be gained from the rebidding of the project “could be used by the government to fund rehabilitation efforts such as those for Leyte.”

The business group is also proposing a review and reform of the bidding process of public-private partnership (PPP) projects to remove technical disqualifications that tend to favor one bidder over the other.

It noted that bidding rules of the Calax were changed four days before the bidding to allow two more competitors to participate.

The group added that there have been changes in procedures in other projects such as in the Daang  Hari – South Luzon Expressway project and the Ninoy Aquino International Expressway project.

SMC has filed an appeal before the Office of the President, while Team Orion has filed a motion urging President Aquino to make a decision.

Aquino has said earlier he favors a rebidding of the project “to get the best deal for the people.”

Other business groups such as the Makati Business Club, American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce Philippines, Canadian Chamber of Commerce of the Philippines, Employers Confederation of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce of the Philippines, Inc., and  Management Association of the Philippines oppose the rebidding of the project citing its negative impact on the country’s effort to attract investments.

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