Calax tax burden worries bidders
The 47-kilometer Cavite-Laguna Expressway (Calax) has yet to be auctioned off but potential bidders have already raised concerns about the burdensome real property tax (RPT) they would be required to shoulder.
The tax was partly blamed for the bidding failure of the Light Rail Transit Line 1 extension last August.
This time around, the government seems to be keen on hearing out the bidders and is reviewing the requirement for the potentially contentious tax ahead of the auction, likely to be held in early 2014, Public Works and Highways secretary Rogelio Singson told Inquirer on Monday.
The concerns were raised after a portion of a Sept. 24 bid bulletin issued by the Department of Public Works and Highways showed that the RPT on the P35.4-billion toll road and its improvements “shall be shouldered by the concessionaire.”
The response, made to written queries gathered from bidders earlier last month, did not sit well with some of the 15 companies that have so far aired their interest in the project.
“It will be an issue. It’s a substantial expense if you take RPTs into consideration,” said Isaac David, who heads the local unit of Malaysia’s Alloy-MTD Group, which is vying for the project.
Article continues after this advertisement“We hope the government will take care of that, otherwise people will suffer having to pay added costs,” he said, noting that this would translate to higher toll fees.
Article continues after this advertisement“Every extra cost that is added in the process means more for the motorist to pay,” David Nicol, chief financial officer at Metro Pacific Investments Corp., said separately.
“The traffic on this road is forecast to be quite low in the early years and loading extra costs on will not improve this,” he added.
Eric Francia, managing director at Ayala Corp., took a more cautious view, noting that it was still “very early” and financial models have yet to be fully mapped out. But he said that government support was needed for a greenfield project like the Cavite-Laguna Expressway.
“It will be good for government to contemplate some potential form of support in the inner years in order to increase likelihood of bid success,” Francia said in an emailed response.
