DPWH to revive crucial Laguna dike PPP

The Department of Public Works and Highways (DPWH) is seeking new consultants to restructure the failed Laguna Expressway Dike public private partnership project (PPP) and ensure that a crucial flood control dike gets built.

Ariel Angeles, DPWH head of PPP service, said in an interview the agency was seeking the help of the Asian Development Bank in procuring a new transaction adviser.

The original Laguna Expressway Dike PPP, valued at P123 billion, failed after bidders snubbed the project last March, citing a slew of reasons from the project’s complexity to legal and political uncertainties.

Angeles said the agency planned to break up the project, which involved a flood control component, overhead tollroad and a massive and likely lucrative land reclamation project on Laguna Lake.

For the flood control dike, Angeles said the government was eyeing unbundling this from the PPP project and building it by itself. He said the DPWH may tap official development assistance loans overseas to help finance the project.

“We hope the next administration would prioritize this,” Angeles said.

The flood control dike was deemed crucial since it would protect about 800,000 people in Laguna and parts of Metro Manila from rising waters. The DPWH estimated the government would also save an average of P8.1 billion in flood-related damage every year.

Angeles said the DPWH still planned to bid out the tollroad, which would be a 47-kilometer expressway linking Taguig in Metro Manila to Los Baños in Laguna.

More uncertain, he said, was the fate of the reclamation of 700 hectares of land on Laguna Lake. The land reclamation aspect was the original PPP project’s main sweetener, since traffic estimates for tollroad were considered “low” and the flood control dike would not make any money.

The final structure would depend on the results of a new feasibility study. Angeles said the project was returning to the drawing board, and any bidding would occur in 2017 at the earliest.

The original Laguna Lakeshore Expressway Dike PPP was among the Aquino administration’s more ambitious projects. It also lured a healthy amount of interest from the private sector, before feasibility issues ultimately prompted bidders to back out.

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 Aquino administration, which ends in June 2016,  had successfully auctioned off 12 PPP deals valued at over P200 billion.