Calax re-bidding to lower investors’ confidence in PPP, PH, warn business groups

MANILA, Philippines—Eight business groups slammed on Tuesday the proposed re-bidding of the P35.4-billion Cavite Laguna Expressway (Calax) deal, stressing that such a move would be an “inopportune” and ill-advised decision that would once again put to question the credibility of the government’s Public-Private Partnership (PPP) program.

At the same time, a re-bidding would have a negative impact on the country’s improving standing in the investor community, the business groups said in a statement issued Tuesday.

The statement was issued by Makati Business Club (MBC), American Chamber of Commerce of the Philippines (AmCham), Australian-New Zealand Chamber of Commerce Philippines (ANZCham), Canadian Chamber of Commerce of the Philippines (CanCham), Employers Confederation of the Philippines (ECOP), European Chamber of Commerce of the Philippines (ECCP), Japanese Chamber of Commerce of the Philippines, Inc. (JCCIPI), and the Management Association of the Philippines (MAP).

Cavite-Laguna Expressway Route Map. FROM www.dpwh.gov.ph

“While the PPP Program encountered some difficulties in its initial stages, it has since begun to catch up, with high-impact projects being steadily rolled out, catching the attention of domestic and international investors. It is imperative that this pipeline be clear of any blockages and inconsistencies if we are to protect the credibility of this program and our procurement system as a whole,” the statement read.

The business community pointed out that the Department of Public Works and Highways conducted the bidding of the Cavite-Laguna Expressway with complete transparency and fairness, and in full compliance with the Build-Operate-Transfer Law.

“As such, we believe that there is no legal basis for re-bidding the project. We share the concern of our colleagues in the private sector that a disregard of the present rules through a re-bid will adversely impact investor confidence in the PPP Program and in our bidding procedures, which the DPWH and the PPP Center have been painstakingly reforming for the better, and consequently promoting here and abroad,” the groups explained.

“Thus, we call on government to remain consistent with the provisions of the BOT Law, not just in this particular case but also for the other projects in the pipeline. We also call on government to swiftly enact the amendments to the BOT Law that will institutionalize the PPP Center and its processes, and which we believe will further strengthen our PPP framework and prevent hindrances to the implementation of critical public projects,” they further stressed.

The eight business groups further noted that consistency and predictability in policy and adherence to rules, among other factors, would form the bedrock of investor confidence in any economy.

“In light of the significant attention that the Philippines has been gaining from the international and domestic investing community, it is our firm belief that the country must hold fast to these principles in order to sustain the gains that the country has achieved in the past four years,” they added.

On Monday, the consortium backed by Ayala Corp. and Aboitiz Land Inc. that topped the “qualified” bids last June urged President Benigno Aquino III to just choose a winner.

It was reported that the Ayala-Aboitiz’s Team Orion filed a motion at the Office of the President to restate its view that it should be awarded the public private partnership (PPP) deal, which involves the construction and operation of a 45-kilometer toll road south of Metro Manila, where Ayala owns wide swaths of land.

The move was also aimed at heading off a re-bidding exercise, deemed costly both in time and resources, which Aquino last week said he was “inclined” to do. This was after disqualified San Miguel Corp. unit Optimal Infrastructure Development Inc. sought Malacañang’s intervention to reverse its removal from the competition and also be awarded the PPP deal.

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