Biz Buzz: Stradcom conundrum
Stradcom conundrum
First the good news: As has been reported earlier, President Aquino had his driver’s license renewed last week like “mere mortals” around their birthdays. True to form, the President insisted on not receiving any special treatment, arriving at the Land Transportation Office’s Tayuman office on board a Toyota Innova vehicle, without his usual 12-vehicle security convoy, and without any media people in tow.
Refusing to be treated like a VIP, he lined up along with other applicants and was number 84 in the queue. This impressive display of humility was met with an impressive display of efficiency by the LTO system. President Aquino received his new driver’s license ID in under 30 minutes (26 minutes, to be exact). The President even commended Transportation Secretary Jun Abaya for the speedy service.
Now the bad news: The private corporation that has made this kind of efficiency possible at the LTO’s licensing offices—Stradcom Corp. of businessman Cezar Quiambao—has yet to experience the same level of efficiency from the government in terms of getting paid for its services.
To recall, the Department of Transportation and Communications suspended payment to Stradcom after a farcical “ownership dispute” erupted in late 2010, where some alleged Stradcom shareholders tried to take control of the company’s facilities with the help of then Transportation Assistant Secretary Virginia Torres. Payment was suspended supposedly pending the court’s determination of who really owned the firm.
Well, the Supreme Court ruled with finality last year that Quiambao was the rightful owner of Stradcom. You’d think the company would now get paid, right? Despite repeated requests, however, Stradcom has yet to be paid and DOTC has been dragging its feet on the issue. How much does the government owe Stradcom, to date? About P4 billion in fees, we’re told.
Incidentally, DOTC keeps insisting that Stradcom’s system is obsolete and needs to be replaced, preferably by another service provider. Obsolete? Hmmm. The President sounded mighty pleased with the speedy service he received under the “obsolete” system. Daxim L. Lucas
MPIC: ‘Oppressive challenge’
To renegotiate and agree on much better terms for the government in the concession for the Subic-Clark-Tarlac Expressway (SCTEx) concession for three tedious rounds—only to have the final output subjected to a Swiss challenge—is becoming extremely frustrating for private sector proponent Manila North Tollways Corp. (MNTC).
An official from MNTC said that subjecting the radically improved terms and concessions the government has defined and extracted from the company was “not only without legal basis but is also unjust and oppressive.”
The SCTEx contract was won by MNTC, which is part of the Metro Pacific group, during the Macapagal-Arroyo administration, but this contract had been affirmed by the new Bases Conversion Development Authority (BCDA) board under this administration.
As proof of good faith but without prejudice to its rights under the concession agreement, the MNTC official said the tollway company had agreed to renegotiate and three times conceded to improvements introduced by the government on the commercial terms in favor of the BCDA.
Malacañang has indicated its preference to subject the contract to a Swiss challenge, which means rival offers will be entertained but as original proponent, MNTC has the right to match the best counter-offer.
In any case, a Swiss challenge can jack up the cost of MNTC or in the worst scenario, lose the contract if there’s an aggressive rival (say, Manuel Pangilinan’s “frenemy”) that is willing to accept a much lower internal rate of return (IRR) than what it can tolerate.
In claiming lack of legal basis for this SCTEx framework to be subjected to a Swiss challenge, the MNTC official noted that the contract was awarded to MNTC after a public bidding exercise and that a Swiss challenge process was nowhere in the terms of the bidding.
On the other hand, government sources said that while a provision for Swiss challenge was indeed not part of the original equation, the need to secure final approval from the Office of the President was. Doris C. Dumlao
Extended relief
Gaming firm Bloomberry Resorts Corp. of business magnate Ricky Razon has obtained a court order to extend for 10 more days the injunction that prevents the P7.42-billion unloading of shares by Global Gaming Philippines LLC (GGAM), the Las Vegas-based management firm earlier booted out of the former’s Solaire Resort and Casino.
After the Makati regional trial court granted a 20-day relief that lapsed on Feb. 9, the protection order was extended by the court for another 10 days.
The order stops GGAM or any of its directors, officers, placement agents, stockbroker agent Deutsche Regis Partners Inc., John Does and the Philippine Stock Exchange itself as market operator to cross the 921.184 million shares in Bloomberry that are beneficially owned by GGAM equivalent to an 8.7-percent stake.
Of course, while this shareholder dispute continues to weigh down Bloomberry prices, a new player in Pagcor City is preparing to open its doors in the middle of the year, in a dramatic way, that is. Doris C. Dumlao
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