San Miguel eyes majority stake in 42-km STAR

San Miguel Corp. is beefing up its toll road portfolio with a plan to acquire a majority stake in the 42-kilometer Southern Tagalog Arterial Road (STAR) in Batangas.

SMC and its partner in tollway projects, the Citra group of Indonesia, are now finalizing a plan to invest in the toll road concession operated by STAR Tollway Corp. and finance the multibillion-peso upgrading of the tollway that runs from Santo Tomas, Batangas, to the Batangas Port.

“Yes, (SMC) will invest in STAR,” SMC president Ramon S. Ang told the Inquirer, adding that the conglomerate would get a “majority” stake in the tollway south of Luzon.

The concession for this project is held by STAR Infrastructure Development Corp. while the operator is STAR Tollway. The STAR Tollway group is led by Hong Kong-based Cypress Tree Ltd. The concession started in 2002 and will end in 2029.

STAR Tollway is seen taking in new investors to be able to finance the next phase of the STAR tollroad, which is slated to begin next year. According to estimates, it will cost P2.5 billion to widen and repave the portion of the tollroad that has only two lanes and to upgrade the rest.

This development is in line with SMC’s plan to form a three-way partnership with Citra and STAR Tollway to create a strong entity that will go into big-ticket infrastructure projects under the public-private partnership infrastructure-building framework.

In a statement, Citra president Shadik Wahono said Citra and San Miguel were invited by STAR and were now studying the possibility of investing in Phase 2 of the STAR Tollway project.

He said they would complete the evaluation within 30 to 45 days.

“The widening to four lanes will definitely minimize accidents, which are prevalent with the current two lanes,” Wahono said.

The three groups would also look into the extent of investments needed to improve road conditions.

“We are currently evaluating the cost of putting in additional lay bays, adding more lights especially in the major exit points, and installing more reflectors in between exits, together with the planned repaving, widening, and upgrading of the existing road network,” Wahono said.

Recently, SMC announced a deal to take over the company controlling Citra Metro Manila Tollways Corp., the concession holder and operator of the 15-kilometer elevated Skyway tollroad from Makati to Alabang.