The group of businessman Manuel V. Pangilinan will abide by the government’s plan to subject the privatization of Subic-Clark-Tarlac Expressway (SCTEx) to a price challenge.
“That’s their (Malacañang) decision, so we will follow. What can we do? We just take it as is,” Pangilinan said in a chance interview on the sidelines of the launch of the ADR Institute for Strategic and International Studies on Friday night.
Pangilinan chairs Metro Pacific Investments Corp., whose toll road unit Manila North Tollways Corp. bagged the right to lease, manage, operate and maintain SCTEx in 2010.
But last week, the Inquirer reported that the Office of the President had ordered state-run Bases Conversion Development Authority (BCDA) to conduct a price challenge for the 31-year concession of the country’s longest toll road, which connected two former United States military bases-turned-economic zones.
The minimum upfront cash bid is P3.5 billion, which was the amount offered by MNTC to BCDA last February—the third time it had to revise its bid in order to improve the terms and keep its claim on this contract.
“The terms they are referencing are those in the latest letter we sent to BCDA in February this year. Those were the best terms we can offer to the government,” Pangilinan explained.
As the original project proponent, MNTC holds the right to match the highest cash value offer of the other bidders.
As far as competition from other prospective bidders is concerned, Pangilinan said: “We’ll be logical about it. We submitted the terms that we thought were the best.”
Pangilinan admitted that MNTC had been incurring losses from the delays in securing the concession. “But we kept the O&M [operations and maintenance] of SCTEx so we made some modest profit while maintaining it,” he said.
Besides the upfront cash, the SCTEx concession requires the winning bidder to remit to the government a 50-percent share in gross proceeds from the toll road.
SCTEx, which has a daily traffic of 30,000 vehicles, has a cash flow of around P1 billion a year.
Upon transfer of the concession, the private sector would take care of the O&M expenses, while BCDA would be in charge of debt-servicing.