DOTC tells MNTC: We honor business contracts

Transportation Secretary Joseph Emilio Abaya defended delays by the Toll Regulatory Board (TRB) in resolving multi-year toll hike petitions, which already drew legal action from operator Manila North Tollways Corp. (MNTC) and raised fresh questions over the administration’s willingness to honor business contracts.

MNTC, a unit of Manuel V. Pangilinan-led Metro Pacific Investments Corp., sued the government for P3 billion for failing to act on its toll hike petitions for the North Luzon Expressway (NLEx) that were already “due” since January 2013. MNTC filed last April 4 a notice of arbitration and statement of claim against the Republic of the Philippines, via the TRB, before a United Nations body.

“The perceived delay was due to our efforts to comply with the SC [Supreme Court] decision and to protect the motoring public from any unjustified rate increase,” Abaya said in a text message on Wednesday. He was referring to a high court decision on the case of Francisco versus TRB, which included a requirement that any toll increase should be just and reasonable.

“DOTC honors government contracts as well as SC decisions,” Abaya said. “The SC decision in Francisco versus TRB provided a mechanism that needed to be strictly followed, and complying with such process does not mean not honoring contracts.”

A delay in deciding on a toll hike, considered a popular decision, comes as the elections for the country’s next leader draws near. President Aquino’s term ends in June 2016.

Metro Pacific, in a stock exchange filing, said the decision to file for arbitration was due to the TRB’s “inaction on lawful toll rate adjustments.”

The company had been mulling over an arbitration case for months now, but held off any action given that the TRB had signaled it was moving closer to a decision. The filing of the arbitration case on Monday meant it was no longer willing to wait.

“Despite compliance with applicable legal requirements and submission of proper petitions, and even acceding to TRB’s requests to extend the amicable settlement period by more than 90 days, MNTC has not received any feasible settlement offer from the TRB,” MNTC added.

“In view of this, MNTC was compelled to deliver the notice to preserve its rights under the STOA (Supplemental Toll Operation  Agreement),” it said.

MNTC is seeking an “overdue” 15-percent tariff increase for NLEx.

It is also planning to file a separate arbitration case for the government’s alleged failure to resolve its tariff increase petitions for the Manila Cavite Expressway. For the Cavitex, it is seeking an increase of 25 percent for the R1 and 16 percent for the R2 extension.

The Metro Pacific Group also operates Subic Clark Tarlac Expressway.

In an interview last month, Alberto Suansing, a consultant for the TRB, said that a chance for a toll rake hike for Metro Pacific was slim.

“So [the responsibility] would probably go to the next administration,” Suansing has said.

The Metro Pacific Group’s toll road interests are consolidated under Metro Pacific Tollways Corp. (MPTC).

MPTC earlier announced that core profit hit P2.6 billion in 2015, up 19 percent year-on-year due to strong traffic growth and its increased shareholdings in the NLEx. Average daily entries rose 9 percent on NLEx and 8 percent on Cavitex.