Gov’t eyes minimum bid price for Calax project

MANILA, Philippines—The Department of Public Works and Highways (DPWH) will likely place a minimum offer price when it proceeds with the controversial rebidding of the P35.4-billion Cavite Laguna Expressway in the first half of 2015, an official said.

Rafael Yabut, chair of the DPWH special bids and awards committee, said the floor price could be pegged as high as the P20.1 billion offered by San Miguel Corp., which was disqualified by the DPWH for a deficient bid security although that decision was reversed last Nov. 19 by President Benigno Aquino III.

Yabut clarified that no final decision on the public-private partnership deal has been made as the committee would still hold a formal meeting on Friday.

“We are looking at including that floor price,” he said.

He explained that, because the project has been delayed for a number of times, the government now only wants to expedite the bidding process and get on with the construction of the 45-kilometer tollroad that will spur development in areas south of Metro Manila.

The government, Yabut said, hopes to bid out the project again before May 2015. The DPWH plans to publish the new terms by next month.

Rebidding near the middle of 2015 would push back the Calax project’s timetable by almost a year since bids were submitted last June 2.

The setting of a floor price will allow the government to secure a better deal following its decision to scrap the initial process, which was then expected to be awarded to Team Orion, a consortium backed by Ayala Corp. and Aboitiz Land Inc. The consortium offered about P11.66 billion, considered the “highest qualifying bid,” beating two other groups: Metro Pacific Investments Corp. and Malaysia’s AlloyMTD Group. SMC’s Optimal Infrastructure Development, which was disqualified because of a four-day deficiency on its bid bond, offered P20.1 billion.

In the weeks before making his final decision, President Aquino said he preferred a rebid because of the P8.4-billion gap between the offers of Optimal Infrastructure and Team Orion. He said the money could be used to develop crucial infrastructure or provide socialized housing.

Earlier, several influential business groups declared that a decision to hold another auction would scare away investors. But according to Jose Mari Lacson, head of research at stock brokerage firm Campos Lanuza and Co., this scenario would be unlikely and investors, even foreign ones, will participate in the bidding process for PPP deals as long as the project is viable and money can be made.

“Foreign investors understand these risks and they know we can change the rules,” Lacson said.

Only SMC categorically stated that it would participate in a Calax rebid. Team Orion said it would not likely join again, while Metro Pacific said it would wait for the release of the new terms.