Biz Buzz: Is toll rate hike coming?
With just a few months left, and with the election season entering full swing, it’s hard to say if a tollroad rate increase will be implemented before President Aquino’s term ends.
What’s certain, though, is that the bill in terms of forgone revenues continues to swell.
Delays on the part of the regulator meant multiyear forgone revenues at the North Luzon Expressway and Manila Cavite Expressway now amounted to P4 billion, Metro Pacific Tollways Corp. CEO Rodrigo Franco told Biz Buzz. That compares to almost P3.2 billion last year.
Broken down, that running balance translated to P3.2 billion for NLEx and P800 million for Cavitex, Franco pointed out.
Those figures are no joke since motorists are going to have to pay for it one way or another. Also, it goes without saying that the balance rises with every passing vehicle, every day.
This time around, however, the Toll Regulatory Board (TRB) seems to be taking some action, if only to stop Metro Pacific from initiating legal proceedings via arbitration.
We’re told the regulator has requested more time, or until next month, as they’re still clearing certain procedures relating to the toll rate adjustment, which is also being sought by other expressway operators. These procedures include a review by the Commission on Audit.
This is, of course, a far cry from previous instances where operators said they were practically being ignored by the TRB.
Again, depending on how things play out, Metro Pacific signaled that it was ready to pull the trigger on arbitration proceedings.
“We are preparing for arbitration but at the same time listening to the government’s request to give them time to clarify the issues,” Franco said. Miguel R. Camus
Summer convention blues
FOR MANY bankers—and most especially high-flying traders and sales people in the bond, money and foreign exchange markets (and the occasional trust officer)—summer means only one thing: The much-awaited banking “convention” held in some swanky beach resort.
We said “convention” (in quotation marks) because these events are often, according to the very same bankers who attend them, thinly veiled summer parties where the booze starts flowing just after lunch and extends into the wee hours of the morning.
Of course, with tipsy (ok, maybe “drunk” is more appropriate on some occasions) bankers and sales people—many of them young and attractive ladies—get together, all sorts of exciting and Biz Buzz-worthy events unfold.
The first of these financial market organizations, which will have its summer convention, is ACI Philippines, which is the local chapter of an international group of bankers, traders, treasurers and the like.
The organization is an active and influential one as far as moving the Philippine financial markets and its president this year is lawyer Arlene Agustin of Maybank Philippines. Under her stewardship, ACI has decided to hold its convention next month on the swanky resort island of Balesin.
And therein lies the problem, apparently. Unlike previous convention venues of Boracay or Mactan Island, Balesin is an exclusive enclave that requires a pricey 30-minute private airplane ride to reach, and a pricier rental for a villa for accommodations.
We hear that a number of bankers—though rich they may be—are thinking twice about attending the event because of the prohibitive costs. So prohibitive is it, in fact, that guests will have to bunk four to a villa to make it a little more affordable.
More importantly, the usually rowdy bankers are worried that the banking conventions nowadays are becoming “corny” because of the increased scrutiny brought about by complaints of rowdy partying behavior by the participants in recent years (so much so that suspicious spouses joined the convention of a similar organization en masse last year).
Biz Buzz has learned that Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. was unable to accept ACI’s invitation to be its guest speaker this year (and a replacement has yet to be found). Perhaps even the governor was put off by the prospect of an uneventful convention where everyone will behave. Daxim L. Lucas
Manila North Harbor takeover
DESPITE the unnerving father-son Romero feud, conglomerate San Miguel Corp. has obtained a dominant stake in Manila North Harbor Port Inc.
“I think we just completely increased the capitalization and also acquired additional shares of Manila North Harbor. We are now about 80 percent of the company,” SMC president Ramon S. Ang a.k.a RSA told investors during a recent briefing in relation to the conglomerate’s P30-billion preferred shares offering.
Previously, the Manila North Harbor Port was 65-percent owned by Michael Romero’s Harbor Center Port Terminal Inc. and 35 percent by SMC unit Petron Corp. Manila North Harbor has a 25-year contract to operate and expand this harbor beginning 2010. Around P14.5 billion in investments had been committed during the concession period.
To recall, Romero’s old man Reghis had opposed the deal with SMC/Petron and in general, challenged major management moves.
For its part, this Manila port project is among the many infrastructure projects that SMC is banking on to build a $20-billion infrastructure business in terms of market cap by 2020.
This means that feuding father and son will now take the backseat and let SMC/Petron run the show. Doris Dumlao-Abadilla
Disruptor
ON THE power business, SMC’s big boss RSA seeks to be the disruptor in the power generation industry in a way that will benefit consumers.
After taking over the San Roque, Sual and Ilijan independent power producer administrator (IPPA) contracts, which give its power business $700 million in annual cash flow, SMC Global Power has finished putting up its first 300-megawatt power plan in Davao to supply the Mindanao grid. RSA said the group had practically sold out power contracts at only P3.20 a kilowatt-hour.
“All Mindanao utility companies used to buy at an average P7 a kWh. So San Miguel is making lots of money, yet we are able to bring down the cost of power in Mindanao by close to P4 a kwh and now we are doing the same in Bataan. We sold power contract at that price or P3.20 a kwh and we will be able to help the utility company bring down cost by almost P4/kwh,” RSA said.
“We hope to be able to help our consumer by building more plants, maybe in Visayas and also in Luzon, hopefully to influence everybody to bring down the prices of electricity—to make it more affordable to the manufacturing sector and help our industry to be more competitive,” he said.
RSA seeks to do the same disruption in the telecommunication sector, although it remains unclear whether Australian telecom giant Telstra will take the plunge.
“We are putting up mobile broadband and within the next few months, we will be lighting it up. The reason why we’re not officially lighting it up is we’re waiting to have the perfect signal from Pampanga to Batangas. Later, we will expand to all major cities in Visayas and Mindanao and rest assured, we will provide you with good service,” he said. Doris Dumlao-Abadilla
‘Frenemies’ unite
VALENTINE’S day just ended but that doesn’t mean we all can’t show a little love, maybe to a spouse, a friend or even a business “frenemy.”
Take for instance Globe Telecom and Philippine Long Distance Telephone Co., which seem to have recently made it a top public relations priority to get a piece of San Miguel Corp.’s 700 mhz spectrum.
We know both players to be fierce rivals in a contest for leadership that at times get a tad personal. It wasn’t too long ago when PLDT ran an ad campaign portraying Globe’s CEO in a less than flattering manner that prompted Globe to raise the issue with advertising authorities.
But nothing unites competitors more than a common goal.
Just how friendly these two have become on this issue? Take a press statement Globe released this week, quoting PLDT public affairs head Ramon Isberto, who wrote a local publication to correct the impression that both telcos had not sought the 700mhz before.
Isberto also said that allowing San Miguel to continue holding almost all of the spectrum, valued for its wide coverage and wall-penetrating abilities, was “anti-competitive.”
While it’s true that Globe and PLDT have long-standing applications, any casual observation of their public statements shows that both have ramped up the PR game after San Miguel said it might partner with Australia’s Telstra Corp. Ltd. to launch a mobile broadband service.
With that partnership still up in the air, San Miguel president Ramon Ang told the Inquirer his group would proceed with a cheaper and more powerful Internet service this year and that testing was already ongoing.
In any case, this only seems to be a temporary informal PR alliance between PLDT and Globe. It’s not every day we have our two telecom players referencing each other in such a friendly manner. Then again, it’s not every day we have a potentially game-changing rival set to shake things up.Miguel R. Camus
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