SMC, Metro Pacific reach deal on road project

The San Miguel and Metro Pacific groups have struck a compromise on the P7-billion, five-kilometer common alignment for their respective North Luzon-South Luzon Expressway connector road projects, according to Inquirer sources.

The San Miguel and Metro Pacific groups have struck a compromise on the P7-billion, five-kilometer common alignment for their respective North Luzon-South Luzon Expressway connector road projects, allowing their major infrastructure projects to move forward.

Inquirer sources said top representatives from the rival groups, which are building separate road networks, met with Transportation Secretary Joseph Emilio Abaya and Public Works and Highways chief Rogelio Singson last week. Upon the government’s prodding, they were prompted to come up with a consensus framework on the common alignment, which will run from Gil Puyat Ave. (formerly Buendia) in Makati City to the Polytechnic University of the Philippines in Sta. Mesa, Manila.

Under the compromise formula, which will still be subject to final approval from Malacañang, the San Miguel-Citra tandem will build the connector road and shoulder 62.5 percent of the cost. But once Metro Pacific’s connector road is ready to operate, it will reimburse 37.5 percent of the cost to San Miguel-Citra.

Metro Pacific thus ceded to San Miguel’s proposal of a back-ended payment scheme but San Miguel accepted a higher cost component.

San Miguel’s proposal was a 50-50 split with a provision to settle the differential if the vehicular traffic assumptions are not met by the time the toll roads are operational. Metro Pacific’s offer was a 60-40 distribution but had wanted to be part of the project from the start.

“The economics of this is if more vehicular traffic goes to the Metro Pacific connector road by the time both roads are built, San Miguel takes a hit,” said a source privy to the discussions. The source noted that San Miguel, however, was banking on a big volume of passenger traffic seen coming from the Quezon City area where its alignment will cut through.

Also part of the agreement is an “open system” for toll plazas instead of the more complicated inter-operability similar to the flat rate system now used in NLEx. This means that San Miguel and Metro Pacific will both put up their own toll plazas and the motorist pays a flat rate for the common segment in whichever toll plaza he chooses to exit plus the balance for the distance of travel.

Metro Pacific’s P25.55-billion NLEx-SLEx connector road proposal was among the P147-billion infrastructure projects approved last week by the President, who chairs the board of the National Economic and Development Authority. Being an unsolicited proposal, the project will be subject to a Swiss challenge, which means other parties will be invited to submit a better offer but the original proponent will have the right to match the best alternative proposal.

Meanwhile, San Miguel’s connector road, which is part of the concession of the Citra/Philippine National Construction Corp., is only awaiting final approval from the Office of the President.

PNCC and Citra are the original partners in the Skyway project as well as the connector roads and C6 projects before San Miguel joined the venture.