Gov’t set to rebid Calax in mid-2015

Cavite-Laguna Expressway Route Map https://www.dpwh.gov.ph

Big companies will have a fresh chance to bag the Cavite Laguna Expressway (Calax) project in the middle of 2015 after President Aquino ordered a controversial rebid of the public private partnership (PPP) deal.

The decision and new timeline came from the Department of Public Works and Highways, which is implementing the P35.4-billion, 45-kilometer toll road that aims to spur development in provinces south of Metro Manila.

The President’s decision came as no surprise. In recent weeks, he has been signaling his inclination for a rebid, citing the P8.4-billion gap between a disqualified bidder and the qualified frontrunner, saying the government was obligated “to get the best deal for our people.”

The decision to rebid also carries the risk of investors losing faith in the administration’s cornerstone PPP program, according to a number of influential business groups. But Mr. Aquino said he would rather bear that criticism rather than explain to the broader public how his administration forfeited potential revenues, which he said could finance thousands of socialized housing units.

“We got the order to rebid after a thorough review by the Office of the President,” Rafael Yabut, chair of the DPWH special bids and awards committee, said in an interview last week.

“We still have to review the bidding procedure, discuss the parameters but definitely at the maximum we can rebid by mid-2015,” Yabut said.

The awarding of Calax, initially expected to then frontrunner Team Orion (a joint venture between Ayala Corp. and a unit of Aboitiz Equity Ventures) shortly after bids were opened last June 13, has been held back after San Miguel Corp., which was disqualified, sought President Aquino’s intervention.

SMC, through Optimal Infrastructure Development, argued that it was disqualified on a mere technicality—the date on its bid security was four days short of the required 180 days. Australia’s ANZ Bank, prior to the disqualification, clarified the matter with the DPWH but to no avail.

Matters became complicated on bid opening day when SMC’s offer, which was announced to the media since the company was barred from opening its bid within the DPWH premises, turned out to be the highest at P20.1 billion. This was P8.4 billion more than the highest complying bid, the P11.66 billion of Team Orion, and, as noted, was the primary reason behind President Aquino’s decision to order another auction.

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

The President’s decision, which came months after SMC’s appeal, effectively reversed the decision of the DPWH-BAC to disqualify the conglomerate.

The Office of the President specifically noted that SMC’s appeal was “partially granted” and the DPWH-BAC’s decision to disqualify Optimal Infrastructure “is hereby set aside and the DPWH/SBAC is directed to conduct a rebidding.”

The term “partially” was used because President Aquino denied the other major aspect of SMC’s appeal, which was to accept its offer of P20.1 billion and name it the winner of Calax.

Team Orion members did not immediately respond to a request for comment over the weekend but it signaled in a previous statement that it was unlikely to join in case of a rebid. SMC president Ramon Ang said his group would participate if the Calax project is auctioned off anew.