SMC to join in P20B Calax rebid

MANILA, Philippines–Conglomerate San Miguel Corp. (SMC) will join the P35.4-billion Cavite Laguna Expressway (Calax) rebid, according to its president, while businessman Manuel V. Pangilinan’s group remains “curious” despite the minimum P20.1-billion premium bid price that will likely discourage other players.

The two other original bidders for the public private partnership deal, the Ayala Corp. and Aboitiz Land tandem and Malaysia’s AlloyMTD Group, have categorically stated they would no longer participate.

The four original Calax bidders weighed in just days before implementing agency Department of Public Works and Highways released the instructions to prospective bidders on March 10.

The agency, which is also opening the rebidding to new players, published the invitation last week while setting the new bid submission deadline for May 19 this year.

But it was only last Tuesday when the government started getting a clearer picture on which groups were serious about participating in the rebid for the 45.5-kilometer tollroad.

Calax, when completed, aims to bolster development in provinces south of Metro Manila while cutting road congestion.

SMC president Ramon S. Ang said in a text message over the weekend that “SMC will join” the Calax rebid.

Also in a text message, Ramoncito Fernandez, president of Pangilinan-led Metro Pacific Tollways Corp., said his company “remain curious” and that the group would “restudy the TOR,” or terms of reference, before announcing its decision.

The two groups remain keen on the project partly because the four-lane tollroad would have links to both the Manila Cavite Expressway of Metro Pacific Tollways and South Luzon Expressway of SMC.

SMC, already several years into a diversification plan away from food and drinks and into higher yielding businesses like infrastructure, has already bagged one PPP (public-private partnership) deal, the P15.5-billion Naia Expressway project, which is scheduled to open before November this year.

The current Calax rebid process was triggered after SMC was disqualified during the first bidding round over a typographical error on its bid security in June 2014.

The matter became complicated because SMC’s bid turned out to be the highest at P20.1 billion (a premium payment that comes on top of the P35.4 billion construction cost). The amount was about P8.4 billion more than the offer of the Ayala-Aboitiz tandem, which was the bid frontrunner after SMC was disqualified.

The wide gap between the two offers was cited as a key factor when President Aquino later that year reversed the conglomerate’s disqualification and ordered a rebid. The government also ordered that a floor price of P20.1 billion be included in the new terms.

As noted, the inclusion of the premium floor price has made it difficult for some of the original bidders to again participate.

“Not anymore interested to bid. We feel that the minimum mid of P20 billion is not viable,” Isaac David, president of MTD Philippines, said in a text message.

Ramon Azanza III, Aboitiz Equity Ventures first vice president for business development, said the Ayala-Aboitiz tandem would not be participating in what he described as the “unprecedented” rebidding exercise.