Tuesday, June 19, 2018
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SMC, MPIC clash on road projects

Conglomerates Metro Pacific Investments Corp.  (MPIC) and San Miguel Corp. are on a collision course again over differing proposals on how to fund and build the shared portion of two north-to-south connector roads.

San Miguel-led Citra Metro Manila Tollways Corp. said it planned to build the shared Metro Manila Skyway extension from Buendia to the Polytechnic University of the Philippines (PUP) on its own and just get a reimbursement from MPIC after construction has been completed.

“I think our proposal is fair and makes the most sense. Everybody wins,” Citra president and CEO Shadik Wahono said at a press conference. “If we pay 50 percent of the cost, but receive less than 50 percent of the traffic, then it will be a negative investment on our part,” he said.


He said both firms would end up splitting the cost of construction of the shared road, with their respective contributions being determined by how much traffic they would separately bring in.

Worth an estimated P7 billion, the 5-kilometer extension will be shared by both Citra and MPIC, which both have approved proposals to construct roads on separate alignments that aim to connect the Skyway with the North Luzon Expressway (NLEx).

Both proposed roads, named the “connector road” for MPIC and Skyway Phase 3 for Citra, will start at the end of the shared portion before veering off in different directions to their respective alignments.

MPIC holds the concession to NLEx while Citra controls the Skyway.

“If more of the cars go to their connector, then they will have to pay a bigger portion of the bill. Conversely, if they have fewer cars, then their share will be smaller,” Wahono said. “The same goes with us.”

As with the cost of construction, Wahono said Citra’s proposal to the government also indicated that revenues from toll to be collected from motorists should be split between the two companies based on the share of traffic.

MPIC, chaired by Manuel V. Pangilinan, disagreed with Citra’s proposal, adding that the shared portion of both connectors should be built under a 50-50 joint venture.

“What we want is to be treated as a co-equal in this project. They want to go solo and just ask for a reimbursement from us [after construction]. We won’t allow that,” said Ramoncito Fernandez, president of MPIC unit Metro Pacific Tollways Corp., the unit handling the group’s road assets.


Fernandez went as far as to accuse Citra of “bad faith” for submitting a proposal to the government while negotiations with the MPIC group were still ongoing.

In a statement, Citra said its officials met with counterparts from MPIC several times to discuss the revenue-sharing scheme. The meetings happened on September 20, October 24 and November 14.

Citra claimed that last November 20, MPIC president and CEO Jose Ma. K. Lim agreed that the new Citra offer was superior to what MPIC had originally proposed.

In the earlier meetings, Citra said MPIC acknowledged the San Miguel group’s prior rights and concession over the so-called common alignment and it accepted that Citra would construct the common segment provided MPIC would be given proper connection at PUP.

MPIC also agreed that both parties would have toll plazas after the common segment and the common segment would charge based on an “open system” or fixed tolls to avoid interoperability issues.

Citra said MPIC agreed to sign an assignable memorandum of understanding (MOU) because whoever would win the Swiss challenge for the connector road would be the proper legal entity that would enjoy the cost and revenue-sharing arrangement with Citra.

Under the original proposal, MPIC wanted to share 50-50 of the cost but get revenues based on traffic that would pass its alignment.

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TAGS: Citra Metro Manila Tollways Corp., connector roads, Infrastructure, Metro Pacific Investments Corp. (MPIC), roads, San Miguel Corp.
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