SMC finds ally in PCCI on Calax rebidding

Screengrab from www.sanmiguel.com.ph

MANILA, Philippines–Contrary to the views of other business groups, the Philippine Chamber of Commerce and Industry (PCCI) favors the proposed rebidding of the P35.4-billion Cavite Laguna Expressway (Calax) deal as the government stands to gain at least P8.45 billion from this exercise.

In a statement, the PCCI explained that the minor technicality that barred the government from accepting the P20.1-billion bid of San Miguel Corp.’s Optimal Infrastructure Development should not have led to a disqualification.

“(It) should be the government’s own lookout to determine if it was to the country’s best interest to consider a technicality as not material to the financial bid,” PCCI stressed.

The government had disqualified the offer of the San Miguel unit despite its substantial compliance with bidding rules. San Miguel’s issuing bank, ANZ Bank, had issued a bid security check short by four days of the required 180 days.

The PCCI noted that this technicality would deprive the government of the P8.45-billion difference between the bid of San Miguel and the P11.65-billion offer of the consortium of the Ayala and Aboitiz groups that was accepted by the government.

The country’s largest business organization also pointed out that in contrast with the minor technical disqualification, the bidding rules of the Calax project had been changed four days before to allow two more competitors to join the bidding. There were also instances wherein the government had allowed changes in procedures as in the case of the Daang Hari-South Luzon Expressway project and the Ninoy Aquino International Expressway project.

According to the PCCI, the government should review and reform the bidding processes for the government’s Public-Private Partnership (PPP) program to finally remove “technical disqualifications that tend to favor one bidder over the other.” These reformed rules must also apply to the Calax rebidding, the group added.

The PCCI further pointed out that the government might be able to set a higher price at the Calax rebidding, which could start from a floor price of P20.1 billion based on the offer of San Miguel’s unit.

Last week, eight business groups had slammed the proposed Calax rebidding, stressing that such a move was an “inopportune” and ill-advised decision that would put again to question the credibility of the government’s PPP program.

At the same time, a rebidding would have a negative impact on the country’s improving standing in the investor community, the business groups said in a statement. It was signed by the Makati Business Club (MBC), the American Chamber of Commerce of the Philippines (AmCham), the Australian-New Zealand Chamber of Commerce Philippines (ANZCham), the Canadian Chamber of Commerce of the Philippines (CanCham), the Employers Confederation of the Philippines (Ecop), the European Chamber of Commerce of the Philippines (ECCP), the Japanese Chamber of Commerce of the Philippines Inc. (JCCIPI), and the Management Association of the Philippines (MAP).

Last week, the consortium backed by Ayala and Aboitiz urged President Aquino to just choose a winner.

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 PPP deal, which involves the construction and operation of a 45-kilometer tollroad south of Metro Manila, where Ayala owns wide swaths of land.