Ayala still keen on infra projects, looks to next President for direction

Conglomerate Ayala Corp. remains keen on big-ticket public-private partnership deals despite potential risks in any leadership transition.

Ayala will still consider bidding for new projects, including more train PPPs and the potential Ninoy Aquino International Airport development, all valued at over P300 billion, even if these will not be awarded within the current administration, Ayala managing director John Eric Francia told reporters in a briefing on Friday.

President Aquino steps down in the middle of the year.

Infrastructure projects via PPPs have been a key thrust under his administration, which has awarded 12 projects—including expressways, Cebu’s main airport and classroom projects—valued at P217 billion in the last five years.

“You are not starting from scratch,” Francia said, referring to structural reforms made in the current PPP framework. “It’s different now. There is a lot of local participation, a lot of local funding. We’ve built a whole lot of capacity in this space.”

Ayala has won PPP projects including the extension of the LRT-1 elevated train to Cavite province and a tap-and-go fare collection system with partner Metro Pacific Investments Corp.

Additional projects it may bid for include the LRT-2, LRT-6 and the massive P171-billon south line of the North South Railway project, Francia said.
Francia said it was important for the new administration to continue tapping private sector support in this manner.

“The first 100 days [of the new administration] will be more important for us. Because that is really where the momentum is built and the direction is set,” Francia said, “The risk is to not reinvent the wheel. I’m not saying that is going to happen, but that’s a risk.”

Ayala has gotten its feet wet with its first big-ticket deal, the LRT-1 PPP Cavite extension.

The Ayala-Metro Pacific consortium Light Rail Manila Corp. assumed operations of the LRT-1 last Sept. 2015.

Francia said the project’s combined maintenance and rehabilitation would cost about $1 billion, and that the consortium was set to close a deal with lenders to finance this within the first quarter of 2016.

The project falls under AC Infrastructure Holdings Inc., which Francia also heads.