In bidding out Calax anew, Palace runs risk of being snubbed

President Benigno Aquino III. INQUIRER FILE PHOTO

MANILA, Philippines–President Aquino is seriously considering a fresh round of bidding for the controversial P35.4-billion Cavite Laguna Expressway—the biggest tollroad project under the public private partnership program thus far—even as the exercise runs the risk of being snubbed by all three qualified bidders but welcomed by disqualified San Miguel Corp. (SMC).

The move is seen to be Malacañang’s middle ground solution to the thorny issue of SMC’s disqualification. San Miguel last June sought the intervention of Malacañang after the conglomerate’s Optimal Infrastructure Development Inc. was disqualified by the Department of Public Works and Highways over a “mere technicality,” or a four-day deficiency in its bid bond.

The appeal halted the then expected awarding to frontrunner Ayala Corp. and a consortium backed by Aboitiz Land Inc. after the bids were opened on June 13.

It also resulted in the project being delayed for so many months, raising concerns among some investors over the administration’s cornerstone PPP program. The investors said a rebid would mean Malacañang would have to declare the current auction a failure.

“I am inclined to think that a re-bid will be the proper course of action on this particular issue,” Aquino told members of the Foreign Correspondents Association of the Philippines on Wednesday.

Government sources said the President’s stance was based less on the bidding rules and more on the wide gulf between the bids of Optimal Infrastructure, which offered P20.1 billion, while Team Orion of Ayala and Aboitiz, which was the “highest complying bidder,” tendered P11.659 billion.

Two other qualified bidders were a unit of Metro Pacific Investments Corp., and Malaysia’s MTD Group, which offered P11.33 billion and P922 million, respectively.

At stake is the chance to develop and operate the Cavite Laguna Expressway, a 45-kilometer tollroad that aims to spur development in provinces south of Metro Manila.

“At the end of the day, we have to protect the people’s interests,” Aquino said, referring to the P8.4-billion difference between Optimal Infrastructure and Team Orion’s offers, while explaining that it was important for the government to get the “best deal.”

Team Orion’s reaction was swift as it issued a statement later in the afternoon, saying it was “very concerned” over the latest development. It added that the move would have a “severe negative impact” on the integrity of the bidding process and the PPP Program.

“We will not participate if the government decides to rebid the project because there is no legal basis for this course of action,” Team Orion said.

The statement was echoed by the two other qualified bidders, their officials said Wednesday, citing potential issues like the existence of a now-perceived floor price, which is SMC’s P20.1-billion offer, and potential add-on costs.

Originally posted at 6:57 pm | Wednesday, October 22, 2014

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