BCDA approves SCTEx price challenge rules

The guidelines for the price challenge on the Subic-Clark-Tarlac Expressway (SCTEx) have been approved, finally allowing the bidding for the long-term contract to operate and maintain the toll road to push through.

According to the Bases Conversion and Development Authority, interested parties must submit a higher price than the P3.5-billion upfront cash offer—on top of the 50-50 sharing of gross revenues—from the Manila North Tollways Corp. (MNTC).

In turn, MNTC has the right to match the highest bid for the management of the 94-kilometer toll road.

The BCDA and MNTC earlier signed a business operating agreement on SCTEX that needs the approval of President Aquino, who had ordered a price challenge proceeding in the interest of transparency.

BCDA president and chief executive officer Arnel Paciano D. Casanova said yesterday foreign and local firms were expected to participate in the bidding process, provided that they pass eligibility requirements.

“They can either be registered corporations or joint ventures and consortia,” Casanova said. “We are confident that the bidding will result in the best deal for government and motorists.”

At stake are the rights, interest and obligations in the management, operation and maintenance of the four-lane divided expressway that passes through the provinces of Bataan, Pampanga and Tarlac, and which is directly linked to the North Luzon Expressway.

The contract will be in the form of a business and operating agreement that covers 28 years until 2043.

From the government’s perspective, conducting a price challenge means unlocking the best value out of the SCTEx project.

The price challenge was prompted by concerns aired by the Department of Finance on the adequacy of the government’s prospective share of revenues from the tollroad.

For its part, MNTC had to revise its offer three times to improve the terms and uphold its claim on the contract.

The SCTEx concession was won by MNTC during the Arroyo administration when the BCDA moved to privatize the operation of the tollroad.

A few months before President Aquino assumed office in 2010, MNTC was considered the sole eligible bidder for SCTEx after rival Northlink Tollway Management—a joint venture between San Miguel Corp. and Star Tollways Corp.—was declared short of the technical requirements.

The contract was affirmed by the BCDA board under the Aquino administration subject to several rounds of renegotiation starting 2011.

The last proposal was submitted in February, during which the group led by executive Manuel V. Pangilinan offered upfront cash—the same premium that the government will now subject to a price challenge.