SMC disqualified from Cavite-Laguna toll road project

Cavite-Laguna Expressway Route Map SCREENGRAB from www.dpwh.gov.ph

MANILA, Philippines—The Department of Public Works and Highways has disqualified San Miguel Corp. in the bidding for a P35.4-billion tollroad deal south of Metro Manila due to a technicality and will proceed with the opening of financial offers of three other groups on Friday (June 13) despite a possible appeal to be filed by the diversified conglomerate.

The decision was separately confirmed by Public Works and Highways Secretary Rogelio Singson and SMC on Wednesday.

The DPWH bids and awards committee had to decide on which of the four pre-qualified groups would proceed with the bidding and gain the chance to build and operate the 47-kilometer Cavite Laguna Expressway, the Aquino administration’s next big-ticket public private partnership project.

At the center of the issue is a deficiency in SMC-backed Optimal Infrastructure Development Inc.’s offer showing that its bid security, a financial bond that protects the government, expires on Nov. 25 or short of the 180-day requirement by four days.

SMC said in a statement Thursday that it disagreed with the DPWH-BAC’s decision “in the strongest terms”, adding that its issuing bank, Australia’s ANZ, had already clarified the matter with the government.

“The decision to throw out the bid of our subsidiary Optimal Infrastructure Development Inc. is prejudicial, unfair, and disregards both legal and all common-sense considerations that should be given to projects of this scale and importance,” SMC said.

It also cited how its removal from the process “severely limits government’s options on how it can maximize benefits from this project”. SMC last year won the P15.5-billion NAIA Expressway Project PPP after offering to pay the government P11 billion for the right to build the toll road.

“We reject this decision and will explore all legal remedies available to us in order to ensure fair play and give the Filipino people the best possible deal for this vital infrastructure project,” SMC added in the statement.

But with the matter settled, as far as DPWH is concerned, the department will proceed with the opening of financial proposals on Friday despite any appeal that SMC would file, Singson said in a text message.

The financial proposal opening would give stakeholders a good idea of which group would likely win the project.

Optimal Infrastructure’s deficiency was first pointed out when technical proposals were opened last June 2. At least one bidder, MPCALA Holdings of the group of businessman Manuel V. Pangilinan, called for the automatic disqualification of Optimal Infrastructure, but all groups were asked by DPWH to weigh in on the matter.

The action underscored the intense competition among bidders for crucial and potentially lucrative PPP projects like Cavite-Laguna Expressway, which calls for the construction of a new toll road that would help spur development in provinces south of Metro Manila.

Apart from Optimal Infrastructure and MPCALA, the two other bidders are Malaysia’s MTD Capital Bhd. and Team Orion, comprised of Ayala Corp. and Aboitiz Land Inc. All four submitted offers last week,
citing the toll road’s attractive prospects.

SMC said in a statement June 5 that its bid was compliant and its issuing bank, ANZ, certified to the DPWH that Optimal Infrastructure’s bid security is indeed valid and effective for 180 days from June 2 until Nov. 29 instead of Nov. 25. SMC said ANZ’s certification corrects the Nov. 25 date that was indicated in its bid package.

The Calax project involves the financing, design and construction, as well as operation and maintenance of the four-lane expressway that will connect the Manila-Cavite Expressway (Cavitex) and the South Luzon Expressway (SLEx).

It will start at the Cavitex toll gate in Kawit, Cavite, and end at the South Luzon Expressway (SLEx)-Mamplasan Interchange in Biñan, Laguna.

It calls for the construction of 12,207 meters of concrete bridges, 4,618 meters of viaducts, toll gates and interchanges in Kawit, Daang-Hari, Governor’s Drive, Aguinaldo Highway, Silang, Sta. Rosa, Tagaytay-Sta. Rosa Road, Laguna Boulevard and the  Laguna Technopark.

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