Metro Pacific sweetens offer for SCTEx contract

The Metro Pacific group has submitted an improved offer for the operation and management of the Subic-Clark-Tarlac Expressway (SCTEx), based on terms recently renegotiated with the state-controlled Bases Conversion and Development Authority.

The improvement was meant to address concerns raised by the Department of Finance (DoF) on revenue-sharing and potentially avert proposals to subject the SCTEx contract to a new round of bidding. This was the second time under the Aquino administration, however, that the BCDA and Metro Pacific renegotiated the SCTEx framework.

“My understanding is that BCDA is recommending it to the Office of the President,” Metro Pacific Investments Corp. president Jose Ma. Lim told reporters on the sidelines of the meeting of the Shareholders Association of the Philippines (SharePHIL), a new group created to protect and promote shareholder rights, duties and responsibilities.

“I think it’s very, very significant compared to where we started,” Lim said.

Asked to comment on the offer, BCDA president Arnel Casanova confirmed that his office would submit to the Office of the President (OP) the renegotiated terms for SCTEx. He said the revised terms would be more favorable to the government.

“But it will all be subject to approval from the OP,” he said.

It was earlier reported that the DoF was seeking a fixed share of the revenue during the life span of the toll-road concession.

The 33-year SCTEx concession is based on certain projections on cash flow and capital spending requirements which, in turn, use certain vehicular traffic assumptions but the risks are borne by the private sector.

The contract was bagged by MPIC group shortly before the Aquino administration took over but was subjected to a renegotiation in 2011. However, the Palace has yet to approve the concession in deference to the concerns raised earlier this year by the DoF.

Asked about the impact of the delay in the SCTEx project on toll-road unit Metro Pacific Tollways Corp., Lim said: “It’s not going to be lower compared to last year. It’s lower versus our expectations but they continue to outperform last year.”

Lim said MPIC was not seeking a lengthening of the concession period in exchange for the improved terms offered to the government.

“We’re not asking to lengthen the concession period but the government keeps wanting to ask for more. They have signed it two times, so what are your options? You can only give so much, right?” Lim said.

As long as the SCTEx contract remains in limbo, Lim said Metro Pacific could not invest further in the tollroad.

“We can’t change toll booths. We can’t integrate operations. If we can integrate everything, it can be more efficient,” he said.

MPTC’s Manila North Tollroad Corp. is supposed to handle the SCTEx concession. MNTC was considered the sole eligible bidder for SCTEx in 2010 after rival Northlink Tollway Management—a joint venture between San Miguel Corp. and Star Tollways Corp.—was declared short of the technical requirements.