Cebu City infrastructure giant Metro Pacific Investments Corp. (MPIC) signed Friday the joint-venture agreement with the local government of Cebu for the country’s first standalone toll bridge, signaling it was still willing to invest even as its toll road business faced fresh regulatory challenges.
The agreement, signed with the government leaders from the city of Cebu and the municipality of Cordova, marks a step forward toward the construction of an 8.25-kilometer, Cebu-Cordova bridge project, which Metro Pacific hopes to finish by 2020.
The P27.9-billion bridge will provide a third link between mainland Cebu and Mactan Island, where its international airport is located, cutting travel time by about 40 minutes.
The signing came the same day that another Metro Pacific unit, Cavitex Infrastructure Corp., sued the Philippine government, via the Toll Regulatory Board, for its “inaction on lawful toll rate adjustments” for the Manila Cavite Expressway or Cavitex.
It filed a notice of Arbitration and Statement of Claim to the tune of P877 million for three rate adjustments on Jan. 1, 2012, Jan. 1, 2014, and Jan. 1, 2015. Metro Pacific made a similar filing early this month against the government for inaction on toll increase petitions for the North Luzon Expressway (NLEx) for the larger sum of P3 billion.
Rodrigo Franco, president of Metro Pacific’s toll road subsidiary, Metro Pacific Tollways Corp., told reporters yesterday that the company was taking a “guarded” approach to new investments.
“We like projects where the economics are really robust and dependence on government action is less,” Franco said.
He was referring to deals like the Cebu Cordova bridge, a project it has explored as early as 2010. It was drawn to this project because of worsening congestion in Cebu City and its two existing bridge: the Marcelo Fernan Bridge and the Mandaue Bridge.
Cebu has also been expanding rapidly both as a business and tourism hub.
Franco said Metro Pacific expected vehicle traffic at the Cebu Cordova bridge to hit about 40,000 daily when it opens in four years. The project, which starts at the Cebu South Coastal Road, would have an opening toll fee of P89 and should generate more than P1 billion in annual revenues when it opens, Franco said.
“It’s a good project, the traffic we expect to ramp up very quickly because there is no additional capacity in the other bridges,” Franco said.
The Cebu Cordova project likewise marks progress in the infrastructure giant’s goal to expand its business outside outside Luzon, where it also operates the Subic-Clark-Tarlac Expressway.
While Cebu City’s residents benefit from greater access and easing of “choke points” in Mandaue, so too will residents of Cordova town.
“We are the smallest municipality in the entire province of Cebu but the population is around 60,000 already,” Cordova Mayor Adelino Sitoy said in an interview during the same event. “This will open up my town.”