Biz Buzz: Long road to (fee) recovery
After what seemed like ages, Maynilad Water Services Inc.—the water utility of Manuel Pangilinan-led Metro Pacific Investments Corp.—is finally on its way to getting the rate increase it wanted to implement as early as 2013.
Recall that, in 2015, Maynilad took the Philippine government to court (OK, arbitration court, to be sure) overseas because the state-run Metropolitan Waterworks and Sewerage System refused to grant it a rate rebasing adjustment, which the utility said it needed in order to recover its investments for improving the water infrastructure of Metro Manila’s west zone.
Maynilad won its case, but the MWSS would have nothing of it, apparently. They didn’t allow the utility to implement the rate hike, prompting Pangilinan’s camp to file another complaint with international arbiters. This time, Maynilad wanted the government to pay it P3.4 billion for delays in the implementation of the rate hike ordered by the international arbitration group.
As expected, Maynilad won that case.
This bodes well for Maynilad which, just yesterday, announced that the Quezon City Regional Trial Court has ordered the immediate implementation of the final award ordered by that international arbiter in Singapore.
It will mean higher water charges for residents living in the Maynilad concession area but, hopefully, it will also mean better service.
Apart from this, Metro Pacific is bracing for another fight to be allowed to raise rates in another of its regulated businesses. We’re talking about the North Luzon Expressway which has a pending petition for a rate hike that the Toll Regulatory Board has been sitting on for several years now.
Just like in the Maynilad issue, Metro North Tollways Corp. is allowed to increase rates periodically (with the approval of the TRB) to allow the firm to recover its investments in the capital-intensive business of maintaining the key roadway north of Metro Manila.
Don’t be surprised if MPIC will once more take the Philippine government to court, and don’t be surprised if the latter loses again. Do you see a pattern here?
Thankfully, unlike the stubborn officials of the previous administration, Finance Secretary Carlos Dominguez III has made several pronouncements in various fora that the government under the Duterte presidency has no problem honoring commitments and obligations to private parties—even obligations that arose due to previous administrations’ bad business decisions. —DAXIM L. LUCAS
When the rubber hits the tarmac…
Flag carrier Philippine Airlines has lofty dreams for Manila’s Ninoy Aquino International Airport. Its president, Jaime Bautista, revealed in a recent business forum a proposal to build a new passenger terminal, dubbed the Terminal 2 annex building, to help ease congestion and spur action on cutting runway bottlenecks.
This was presumably under the premise that a Naia replacement was not coming anytime soon. But even the best of plans get grounded by a tough dose of reality.
In PAL’s case, it needs additional land from Philippine Amusement and Gaming Corp., which apparently controls the old Nayong Pilipino site beside Naia. This is where PAL wants to build its terminal.
We said a tough dose of reality because apart from legal issues on that parcel of land, it seems Pagcor has some issues with a separate lease deal with PAL, sealed under the previous administration in 2014 and while PAL was owned by San Miguel Corp.
Apparently, the new board bristles at the idea that PAL is paying P40-a-square-meter for the 10-hectare property. PAL insists it was a perfectly legal and binding transaction. Of course, Pagcor says that lease is now under review, which would likely translate to delays to any other transaction with PAL for its planned terminal.
Surely there is a way forward.
We heard PAL is open to renegotiating the old rent, despite it being valid, but it hopes Pagcor would also come to the table and discuss solutions with PAL as it seeks to ease congestion. It goes without saying that issues in Naia, a new international airport serving Manila and a multitude of other projects can move forward with the right amount of political will.
This is but one of the major reasons that brought President Duterte to power. We’re seeing this political will play out in a big way in other aspects of government. Perhaps the aviation/airport sector could use this same level of attention. —MIGUEL R. CAMUS
ALP ‘gallery’
In what’s touted to be the first-of-its-kind in the country or even in the region, upscale residential property brand Ayala Land Premier (ALP) recently unveiled a high-tech real estate showroom at the fifth floor of Greenbelt 5.
The new ALP showroom, which takes up 500 square meters (sqm) of space, is designed to be more like a modern gallery than the usual condominium showroom. At the centerpiece is a huge (15-sqm) scale model of Metro Manila (excluding Alabang) which can illuminate (in sparkling gold) which towers are developed by ALP and likewise point out (in less glorious colors) other Ayala Land brands.
This showroom is barely a month old, ALP managing director Mike Jugo said yesterday. This is also the first showroom in the region to employ “visual mapping” — integrating multimedia tools to offer a visual feast. “We want it to be an extension of the ALP experience. More than selling real estate, what we’re selling are lifestyle and experiences.”
Many people who visit the showroom liken the new showroom to a museum or an art gallery, Jugo said, citing the air of “refinement and sophistication” befitting the ALP brand.
The ALP showroom also offers a sample interior layout of ALP’s hottest residential project, which at this time is Arbor Lanes at Arca South. But what other showrooms don’t have is a projection room that’s like a mini-theater offering potential buyers a clearer vision what to expect from the upcoming residential community. Through a lights-and-sounds play, the key features of the project are highlighted.
At any given time, Jugo said visitors would find about six ALP people in the showroom to assist them. This is how shopping for upscale real estate is these days. —DORIS DUMLAO-ABADILLA
