MPIC eyes projects in Thailand, Indonesia

Infrastructure holding firm Metro Pacific Investments Corp. is scouting for fresh overseas investment opportunities related to its core water utility and tollroad businesses in Thailand and Indonesia alongside hopes that infrastructure-building projects will pick up pace in the remaining years of the Aquino administration.

In Thailand, MPIC is keen on raising the stake held in joint venture with Hong Kong-based parent conglomerate First Pacific Co. Ltd. in the Don Muang tollway project. MPIC chief finance officer David Nicol said the group would typically want to gain close to 50-percent control of its key projects.

Late last year, MPIC and First Pacific teamed up to acquire 29.45 percent of Don Muang Tollway Public Co. Ltd. for P5.8 billion. This investment was through a joint venture, FPM Infrastructure Holdings Ltd., which is 75 percent owned by First Pacific and 25 percent by MPIC.

“We’ve only acquired the first stake. We’re building relationships there and see where to take that further,” Nicol said.

Don Muang Tollway has a 27-year concession ending in 2034 to operate a 21.9-kilometer elevated toll road that runs from central Bangkok to the northern part of the city. This road leads to the old airport.

“The hope there is that over time, more developments will go back to Don Muang because it’s very, very expensive to build terminals in the main airport, so the carriers, when they relocate, they will push traffic there,” Nicol said.

At the same time, Nicol said MPIC was looking at more assets in Thailand and Indonesia. “This is in our core areas of tollroads and water,” he said.

On earnings outlook for 2014, Nicol said the company could not give any good guidance for the year given regulatory uncertainties, including the temporary restraining order on Manila Electric Co.’s rate increase, pending petition for increases in tollroad fees and the arbitration case on Maynilad Water Services Inc.’s water tariffs.

With regards to infrastructure projects under the public-private partnership (PPP) framework, Nicol said the group was still looking at projects like the Cavite-Laguna Expressway and the LRT-1 extension project. “But we have to persuade ourselves that the returns will be good enough for our shareholders,” he said.

Asked whether he sees a faster rollout of PPP projects in the remaining years of the Aquino administration, Nicol said: “Clearly, the administration is keen in principle that these things will move quickly but when it comes to details in execution they seem to be struggling there.”

“I hope it will be faster. At the moment, I’m worried about the pace of execution,” he said.