Gov’t gives up on launching P123-B dike PPP

An ambitious public private partnership (PPP) project aimed at solving heavy flooding in Laguna and parts of Metro Manila would be left to the country’s next president after its auction failed last month, Public Works and Highways Secretary Rogelio Singson had admitted.

The fate of the P123-billion Laguna Lakeshore Expressway Dike was expected, given that several unresolved issues remained, coupled with the looming change in the country’s leadership this coming June.

All three prequalified groups did not submit offers last March 28, prompting the Department of Public Works and Highways (DPWH) to terminate the bidding process.

“It will still take some time to assess the next steps, which will probably be already passed on to the next administration,” Singson said in a text message yesterday.

Ariel Angeles, DPWH head of PPP Service, said Thursday that the DWPH special bids and awards committee has yet to meet to discuss the matter. He said a rebidding process was among the options to be considered.

The PPP project, which has a 37-year concession period, was an innovative solution to flooding and was combined with infrastructure and real estate components to make it attractive to private investors. This also made it one of the most complex and expensive PPPs ever rolled out under the Aquino administration’s flagship infrastructure program.

It combined a 47-kilometer tollroad from Taguig in Metro Manila to Los Baños, Laguna, running on top of a flood control dike, which would have been the longest in the world. Its main business sweetener was a 700-hectare land reclamation project on Laguna Lake that could be developed into mixed-use communities.

The PPP deal was expected to “benefit up to 200,000 households” and protect about a million residents from flooding, PPP Center executive director Andre Palacios said earlier.

The project ultimately sank due to a combination of its “high-risk” and complexity, its lack of viability, missing guarantees on connectivity to major roads and uncertainties relating to the outcome of the upcoming elections.

The three groups that qualified and collectively did not submit bid offers were Team Trident, comprised of Ayala Land Inc., SM Prime Holdings Inc., Aboitiz Equity Ventures Inc. and Megaworld Corp; San Miguel Corp., and Alloy Pavi Hanshin LLEDP Consortium, comprised of Malaysia’s MTD Group, South Korea’s Hanshin and the family of former Sen. Manuel Villar Jr.

The  Laguna Lakeshore Expressway Dike deal, like other PPP projects under procurement, is not covered by the election ban.

So far, 12 PPP deals valued at more than P200 billion have been awarded and four are set to be finished before President Aquino steps down in the middle of this year.

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