Bidders for Laguna dike project win more time

Bidders for the P123-billion Laguna Lakeshore Expressway Dike project have been given their final extension to prepare offers for one of the last big-ticket public-private partnership deals the government hopes to auction off before President Aquino steps down in mid-2016.

Public Works and Highways Secretary Rogelio Singson said on Friday that the bid submission deadline had been moved another two months to March 14, 2016 from the previous deadline of Jan. 7 next year.

The bid deadline has been moved several times over the last few months, mainly as interested parties raised concerns over the project’s viability and uncertain government assurances, given that a new administration will take over in less than a year.

They also cited the complexity of the project, which combines a 47-kilometer toll road from Taguig in Metro Manila through the towns of Calamba to the Los Baños-Bay boundary in Laguna, a flood control and its main feature, a 700-hectare land reclamation project to rise on Laguna Lake.

The most vocal are Team Trident, comprised of Ayala Land Inc., SM Prime Holdings, Aboitiz Equity Ventures and Megaworld Corp. as well as Alloy Pavi Hanshin LLEDP Consortium, comprised of Malaysia’s MTD Group, South Korea’s Hanshin and the family of former Senator Manuel Villar Jr.

The third bidder, San Miguel Corp.’s San Miguel Holdings, said it would abide by the government’s deadline, but added that a decision to bid would depend on the results of its final due diligence.

Apart from viability issues, the groups sought more time and raised worries over a crucial presidential proclamation that would allow the winning bidder to develop and sell reclaimed land on Laguna Bay.

Isaac David, who heads MTD Philippines, said in a text message that the government hopes to award the project by April 1, 2016 and sign the concession agreement by April 29 next year.

“They want the signing two months before the entry of the new administration. Signing of the contract will mean paying already 20 percent of the premium. The big risk is if the next admin will not support the project,” David said.

David said his group would need about four to five months after the issuance of the final concession agreement, which is expected in February next year, to finalize its bid offer.

Román Azanza III, Team Trident spokesperson and Aboitiz first vice president for business development, also said in an earlier statement that more time was needed.

“Under normal circumstances, a deal of this complexity would take over a year to prepare for,” Azanza said.

“Assuming all structural issues and risks were addressed … and all relevant engineering and environmental studies provided to bidders, then the minimum it would take to evaluate and prepare for a bid of this magnitude would be at least six months from receipt of a viable concession agreement,” he added.

The timing suggested by both groups rules out an award within President Aquino’s term.

Singson said in an interview with ANC’s Business Nightly last month that while the government would like to maximize competition and get the best deal for the government, the auction would proceed even if some groups will back out.

The law allows for the evaluation of a single bid, but that process requires a fresh approval from the board of the National Economic and Development Authority.