MVP group submitting new offer for SCTex
Manuel V. Pangilinan’s Metro Pacific Tollways Corp. (MPTC) is scheduled to submit its revised proposal for the Subic-Clark-Tarlac Expressway (SCTEx) concession deal by the end of this month, with company officials hopeful of finally striking a deal with the government after a three-year delay.
MPTC chief financial officer Chris Lizo on Thursday said the firm’s new proposal, which would give the government a higher share in toll revenues, would be sent to the Bases Conversion and Development Authority (BCDA) next week.
Lizo said the company was also working on starting talks with the Department of Finance (DOF) to discuss other refinements that would make the proposal acceptable to the government.
Lizo said that while it had no official “personality” in approving MPTC’s SCTEx offer, gaining the DOF’s support would bolster the chances of getting the proposal approved.
If and when MPTC’s offer is approved by the BCDA, the proposal would be forwarded to the Office of the President for the final approval.
This is the third time MPTC is revising its offer for the SCTEx contract.
Under the new proposal, the BCDA would get a share of 50 percent in the total revenue versus the 70 percent that the agency was entitled to before.
However, if the BCDA’s share in revenue falls short of the amount needed for debt payments to the Japanese International Cooperation Agency (Jica), which funded the construction of SCTEx, MPTC said it would provide cash advances to cover the deficit.
MPTC had pledged to provide cash advances until 2016, but later extended the period covered to 2019 as it sought to sweeten its offer.
The cash advances, however, would be deducted from the BCDA’s future share in the profits from the SCTEx operations.
Yearly payments to Jica for the SCTEx amounts to about P1.4 billion. However, current traffic at the highway generates P900 million a year, the BCDA’s estimates showed.
The BCDA stands to earn more if traffic at SCTEx meets or exceeds targets. But if vehicle traffic falls short of targets, the government’s share may not be enough to meet debt payment requirements. This means the BCDA would have to tap other revenue streams to meet obligations.