Megaworld joins P123-B PPP project

Leading property developer Megaworld Corp. of tycoon Andrew Tan has joined the “super consortium” called Team Trident in bidding for the P123-billion Laguna Lakeshore Expressway Dike project, the biggest public private partnership (PPP) deal rolled out by the Aquino administration thus far.

Team Trident includes some of the biggest names in Philippine business: The Ayala group’s Ayala Land Inc., the Aboitiz family’s Aboitiz Equity Ventures Inc. and retail giant Henry Sy’s SM Prime Holdings Inc.

Other conglomerates and international players also disclosed their ambitious partnerships yesterday and formally signified their interest to participate in the flagship government project.

The Department of Public Works and Highways (DPWH) announced that four groups submitted qualification documents by the 2 p.m. deadline.

San Miguel Holdings Corp., Malaysia’s Alloy MTD Group, Hanshin Engineering Corp. of South Korea and a company controlled by the family of former Sen. Manuel Villar Jr. also submitted qualification documents, as did the Indonesian, Filipino and Korean group called Rainbow Consortium.

The MTD group is formally called Alloy Pavi Hanshin LLEDP Consortium. Rainbow Consortium includes Rainbow Holdings Inc., PT Nusa Konstruksi Enjiniring, Korea Expressway Corp. and local property builder Sta. Lucia Land Inc., documents submitted to the DPWH showed.

The DPWH expects to decide which groups are qualified in seven to 20 days, Public Works Undersecretary Rafael Yabut told reporters yesterday. He said the department was so far maintaining its bid submission deadline of early July 2015, although some participants said this was an “aggressive” target given the scale of the Laguna Lakeshore deal.

At stake is among the more complex PPP deals rolled out since President Aquino launched his cornerstone infrastructure program in 2010.

The Laguna Lakeshore deal is tagged to have a development cost of P122.8 billion—about double the amount for the last biggest PPP project, the P65-billion Light Rail Transit Line 1 Cavite extension, won last year by an Ayala Corp. and Metro Pacific Investments Corp.-backed partnership.

The huge capital spending requirement is due to the massive requirements for the deal, which combines a 47-kilometer tollroad, a flood control dike and a 700-hectare land reclamation project in Laguna Lake near Taguig and Muntinlupa.

The private-sector winner would be allowed to develop most of the reclaimed land into mixed-use projects, which several of the bidders such as Ayala, SM and Megaworld have specialized in for various projects across the Philippines.

For Megaworld founder Andrew Tan, the reason behind Team Trident’s partnership was as much about maximizing opportunity   while minimizing risk.

Tan said: “Yes, we are competing against one another in the same industry, but it is healthy competition all the time. In this project, we are very much united in our commitment to make it successful. The project is so big that it requires large financial resources and masterful execution. If successfully implemented, the project will bring enormous benefits to our country, particularly flood reduction and transport efficiency.”

Among the challenges is ensuring how the private sector could earn a decent return on the project’s components, noted Ramon Azanza III, Aboitiz Equity Ventures first vice president for business development.