BCDA says it will honor SCTEx deal
The Bases Conversion and Development Authority (BCDA) said its review of the Subic-Clark-Tarlac Expressway (SCTEx) concession contract was being made to ensure the government would get the best terms from the road’s privatization.
In a statement, BCDA said it would honor its contract with Manila North Tollways Corp. (MNTC), which is chaired by businessman Manuel V. Pangilinan.
“But due to certain supervening events, the need to continue the negotiation was sought by the previous BCDA board members to improve the benefits from the contract and ensure that the BCDA can meet its loan obligations for the construction of the SCTEx,” BCDA said.
“Both the present BCDA board of directors and MNTC acknowledge this,” the state-run firm said.
“The contract is currently being reviewed as matter of due diligence by the new BCDA Board to ensure that the government gets the best deal and maximize returns,” BCDA president and CEO Arnel Paciano D. Casanova said.
He said a review to seek better terms did not violate any provision of its contract with MNTC, which last year won the 25-year deal to operate SCTEx.
“We definitely believe in protecting the sanctity of contracts and this is part of that commitment,” said Casanova.
He said that getting better terms would ensure that the BCDA would receive enough money from concession fees to service the government’s loan from the Japan International Cooperation Agency (Jica).
Under the original deal, MNTC would pay semi-annual concession fees in the first five years that the government would use to pay the loans used to build the road.
If these payments are not enough to cover loan payments, the BCDA said it would have to ask for funds from the government.
For the remainder of the contract, the BCDA would have a 20-percent share in revenues from the toll road.
MNTC earlier said it would not accept any significant changes in the contract’s provisions that would affect the project’s financial viability. The company said any additional cost it would be forced to bear would eventually be passed on to motorists in the form of higher toll rates.
