SMC-DMCI consortium secures P11.5-billion credit facility

A consortium led by San Miguel Corp. and the Consunji group has obtained a term credit facility worth P11.5 billion for the construction of the Tarlac-Pangasinan-La Union Expressway (TPLEX), an infrastructure project which is deemed crucial in improving the road network to Northern Luzon.

The 10-year loan for this 88.58-kilometer toll road project came from a syndicate of banks led by the country’s biggest lender, Banco de Oro Unibank. Other participating banks are the state-owned Development Bank of the Philippines and Land Bank of the Philippines.

“TPLEX is a momentous project because it has many firsts to its credit. It is the first all-Filipino owned public-private partnership (PPP) project; the first PPP (public-private partnership) project funded by all-Filipino banks, and the first toll road project under the PPP that completed its financial close,” BDO president Nestor Tan said in a statement on Thursday.

The proponent of TPLEX is Private Infra Dev Corp., an all-Filipino consortium led by SMC subsidiary Rapid Thoroughfares Inc., DMCI Group and D.M. Wenceslao & Associates Inc.

The TPLEX project, which was estimated to cost P19 billion, is being undertaken under a build-operate-transfer contract between the government—through the Department of Public Works and Highways and Toll Regulatory Board—and PIDC.

It is a two-lane highway, with provisions for widening.

Once completed, it is seen to reduce by half the travel time from Manila to Baguio.

The construction of the two-lane travel way, the first phase, is expected to be completed in five years.

SMC and DMCI earlier completed a joint takeover of a controlling 67-percent stake in PIDC.

SMC, through Rapid Thoroughfares, acquired a 35-percent stake in PIDC while DMCI obtained 32.22 percent.

The 88-kilometer expressway project will extend from La Paz, Tarlac—at the end of the Subic-Clark-Tarlac Expressway (SCTEx)—to Rosario, La Union.

SMC has announced its intention to increase its interest in PIDC to at least 51 percent by next year.

SMC and DMCI are expected to provide the equity component of the total project cost of P19 billion.

Aside from earning from the operations of the tollway, SMC sees the completion of the expressway crucial in speeding up the distribution of its goods to Northern Luzon.