Archive for the ‘News’ Category

Swiss challenge set for connector road

Malaya Business Insight, 04 August 2014


The Department of Transportation and Communications (DOTC) will subject to a Swiss challenge the P18-billion North and South connector road project submitted by unsolicited proponent Metro Pacific Investment Corp.

DOTC Secretary Joseph Emilio Abaya said the Department of Justice (DOJ) has issued an opinion recommending that the unsolicited proposal   go through the Swiss challenge process.

The unsolicited proponent, MPIC unit Metro Pacific Tollways Development Corp. and Philippine National Construction Corp. (PNCC) have entered into joint venture agreement for the project but is flexible to subjecting the proposal to a Swiss challenge, Abaya said. The proponent has the right to match the challenger’s offer.

The Department of Public Works and Highway (DPWH) will undertake the bidding.

The National Economic Development Authority (NEDA) board headed by President Aquino earlier gave the go-signal to the MPIC-PNCC JV and for the revision the supplemental toll operations agreement (STOA) that would allow the construction of the NLEX-SLEX connector road and subject to the approval of the Toll Regulatory Board (TRB).

However, the TRB sought the DOJ opinion after a private lawyer filed an opposition questioning the JV.

The DOJ opposed the decision of the NEDA saying it was beyond its authority.

“Especially under the circumstances prevailing in this case, it would be highly unwise and even contrary to the tenets of good governance to suddenly convert an unsolicited proposal, which is about to be subjected to Swiss Challenge, into another mode of implementation, i.e., entering a JV between the Unsolicited Proponent and the PNCC at the behest.” DOJ said

Under the amended STOA, the so-called Segment 10 project would be redefined to cover the NLEX-SLEX connector road to be known as segment 10.2. This involves the construction of 8 kilometers of road from C5 to PUP in Sta. Mesa.

Without the amendment of the STOA, government rules require that a Swiss challenge be undertaken since the NLEX-SLEX Connector Road project is an unsolicited proposal.

Based on the original target, once the TRB approves the revised STOA, MPIC will begin groundwork on the project in the third quarter of this year. The project is set for completion in 2016.

The NLEX-SLEX Connector Road starts at C3 where segment 10.1 ends and will go towards PUP in Sta. Mesa.

Beyond that, a common alignment will traverse PUP, crossing the Pasig River towards Plaza Dilao, turning left on Osmeña Avenue connecting to Buendia.

The connector road project is part of the NLEX Metro Expressway Link which is seen to  significantly reduce travel time between NLEX and SLEX from about 2 hours to 20 minutes,  decongest Metro Manila’s main arterial roads, eradicate the truck ban and thus allow the unhampered transport of goods from Luzon’s northern and southern provinces to the metropolis.

The other NLEX-SLEX connector road project   being undertaken by the Citra Central Expressway Corp., (CCEC) started construction last April.

Called Skyway Stage 3, the P 26.7-billion project involves the construction of a 14.8-km road targeted for completion in 36 months.

The six-lane elevated expressway   will connect the end of the Skyway in Buendia, Makati City to Balintawak, Quezon City.


‘Swiss challenge’ weighs on MPIC road deal

Philippine Daily Inquirer, 04 August 2014

By Miguel R. Camus


The 8-kilometer Metro Manila connector road of Metro Pacific Tollways Corp. will be subjected to a “Swiss” or a competitive challenge, as the administration shifts gears following legal questions raised on a project structure it was previously seeking to implement, senior government officials said last week.

Public Works Secretary Rogelio Singson said in a text message that the project’s mode of implementation would revert back to an unsolicited proposal and “will need to go through a Swiss challenge.”

He added that a minimum of 90 days was needed for competing proposals to be submitted.

A Swiss challenge in this case means other groups would be allowed to offer to build the P18-billion connector road that would link Metro Pacific Tollways’ North Luzon Expressway with the South Luzon Expressway. But under the rules, Metro Pacific Tollways has the right to match rival offers to win the project.

“It’s going to be a smoother and quicker route, if we go back to the unsolicited structure,” Transportation Secretary Joseph Abaya told reporters in an interview Friday.

The decision for the elevated expressway to be implemented under a joint venture with Philippine National Construction Corp.—which was backed by the National Economic and Development Authority—was struck down by the justice department last month, causing further delays to the project.

Justice Secretary Leila de Lima specifically noted in the decision on July 7 that the Neda board approval on the new structure “appears to have been issued beyond its powers, and without factual basis or justification.”

Metro Pacific Tollways president Ramoncito Fernandez said they have always been open to a Swiss challenge, but because of the disagreements within the government on its implementation, the connector road would not start construction before 2015.

He said the estimated completion would then be moved to 2017 instead of the original plan to finish the road by the time President Aquino steps down in 2016. Metro Pacific Tollways is a subsidiary of Metro Pacific Investments Corp., a listed infrastructure company led by businessman Manuel V. Pangilinan.

San Miguel Corp. and Indonesia’s Citra Group, which jointly operate the SLEx, are currently building another elevated connector road that would link SLEx with NLEx. The completion of this project is expected as early as 2016, their officials said in a previous interview.


NLEX-SLEX connector road faces further delay

The Philippine Star, 04 August 2014

By Lawrence Agcaoili


MANILA, Philippines – The government has decided to revert back to the Swiss challenge scheme for the proposed P18-billion toll road connecting the North Luzon and South Luzon expressways originally proposed by infrastructure giant Metro Pacific Investments Corp.

Transportation Secretary Joseph Emilio Abaya said the ball is now in the hands of the Department of Public Works and Highways (DPWH) that is tasked to bid out the road project as the Department of Justice (DOJ) deemed the joint venture between MPIC’s Metro Pacific Tollways Development Corp. (MPTDC) and state-run Philippine National Construction Corp. (PNCC) illegal.

“We received the DOJ opinion, and essentially, the direction is to go back to the unsolicited proposal and Swiss challenge,” Abaya said.

Public Works Secretary Rogelio Singson said the Swiss challenge could take at least three months.

“If it goes back to DPWH, we need to go through a Swiss challenge with a minimum of 90 days for competing proposal,” Singson said in a text message.

The head of the Department of Transportation and Communications (DOTC) said President Aquino wants the NLEX-SLEX connector road constructed.

The Swiss challenge is expected to take anywhere from three months to 10 months from the publication of the Invitation to Bid to the awarding of the project. Under the process, the original proponent of the unsolicited proposal would have the right to match the highest bid.

As early as August 2012, the government was supposed to undertake the Swiss challenge process. However, the DOTC recommended that MPIC’s Metro Pacific Tollways Development Corp. (MPTDC) enter into a joint venture agreement with state-run Philippine National Construction Corp. (PNCC) to expedite the connector road project.

Justice Secretary Leila de Lima has issued an opinion dated July 7 that the National Economic and Development Authority (NEDA) Board chaired by President Aquino erred when it approved the joint venture agreement for the connector road project.

The NEDA Board approved the amendment or extension of existing joint venture between MPTDC and PNCC as well as the supplemental toll operations agreement (STOA) to cover the extension of the franchise of NLEX under Presidential Decree No. 1894.

De Lima said in the 68-page letter sent to Transportation Undersecretary Jose Perpetuo Lotilla that “the NEDA Board approval appears to have been issued beyond its powers, and without factual basis or justification.”

Even if the proposal is to proceed, instead, in accordance with the scheme described in the NEDA Board’s amended approval, De Lima said all government agencies, bodies and officials are constitutionally and statutorily required to ensure that such proposals do not merely offer advantageous terms from a business perspective.

She added that it would be highly unwise, and even contrary to the tenets of good governance, to suddenly convert an unsolicited proposal, which is about to be subjected to Swiss Challenge, into another mode of implementation by entering a joint between the unsolicited proponent and the PNCC.

“Thus, any perception that piggybacking on the franchise of PNCC would, in any way, allow the unsolicited proposal of MPTDC to evade or circumvent the Swiss Challenge requirement or would allow it to obtain the contract without competitive challenge, is erroneous,” she stressed.

MPIC is amenable to subjecting its unsolicited connector road project proposal to a “Swiss Challenge.”

The NLEX SLEX connector project was originally submitted to the DPWH in May 2010 under the Build-Operate-Transfer (BOT) Law.

The project would connect NLEX and SLEX via Segment 9 worth P1.9 billion. Connecting NLEX to MacArthur Highway in Valenzuela would be completed in August and Segment 10, worth P10 billion, starts from the Mindanao Avenue exit of NLEX to North Harbor in August next year.

NLEX would be connected through the common alignment at the Polytechnic University of the Philippines (PUP) in Sta. Mesa to the P26.5 billion Metro Manila Skyway Stage 3 project of diversified conglomerate San Miguel Corp. (SMC).


DOTC working on settlement with MRT3 private owner to clinch buyout before yearend

InterAksyon, 03 August 2014

By Darwin G. Amojelar


MANILA – The Department of Transportation and Communications (DOTC) plans to settle with the private owners of the MRT3 so they could be bought out before yearend.

“Currently, we are already in an equity value buyout proceeding. We got a resolution from Land Bank of the Philippines [approving the buyout] and we are awaiting a board resolution from DBP,” Transport Secretary Joseph Emilio Abaya told reporters last Friday.

Both state-owned, Landbank and Development Bank of the Philippines, hold the 80 percent economic interest in MRT3, while the remaining stake is held by creditors of Metro Rail Transit Corp (MRTC).

Abaya said DOTC is awaiting the go-ahead of the Office of the Solicitor General (OSG) for the MRT3 buyout.

“After which, we will sign a compromise agreement between the DOTC and MRTC to buyout their shares. Then we submit that to the arbitration panel. It should be approved by the arbitration committee,” Abaya said, adding that the government expects to submit the deal with MRTC in two months.

In January 2009, MRTC filed an arbitration case in Singapore against the government for failure to pay equity rental payments (ERPs) on time.

In March last year, President Benigno Aquino III issued Executive Order No. 126, directing DOTC and the Department of Finance (DOF) to buy out MRT3 from MRTC pursuant to a build-lease-transfer (BLT) agreement.

Metro Pacific Investments Corp (MPIC) controls 48 percent of MRTC after signing a cooperation agreement with various groups that hold rights and interests in MRT3, including Metro Rail Transit Holdings Inc, Metro Rail Transit 2 Inc and Monumento Rail Transit Corp.

The DOTC had said the buyout of MRT3 would cost $1 billion, but would allow the government to wind down the 15 percent equity rental paid to the private owners. The government pays a P7 billion subsidy for MRT3 each year.

Running from North Avenue in Quezon City to Taft Avenue in Pasay City, MRT3 is operating at nearly 500,000 passengers per day, or way beyond its rated capacity of 350,000.

At present, the rail system has a fleet of 73 Czech-made air-conditioned rail cars, of which up to 60 three-car trains operate daily.

The trains run at a maximum speed of 65 kilometers per hour to cover the rail system’s 13 stations in about 30 minutes, including short dwell times of about 25 to 35 seconds in each station. is the online news portal of TV5, which like MPIC is chaired by Manuel V. Pangilinan.


DFA lobbies Hyundai Engineering to expand Philippine presence

Business World, 01 August 2014

By Ailyn D. Galura


HYUNDAI Engineering & Construction Co. Ltd. (HDEC) is considering new projects outside its current commitments in the Philippines, the Department of Foreign Affairs (DFA) said.

On July 22, Philippine Ambassador to South Korea Raul S. Hernandez met with HDEC officials led by its President and CEO Soo-Hyun Jung, who cited the Philippines as “a competitive location for investors.”

Mr. Hernandez urged HDEC to increase the company‚Äôs presence in the Philippines “for the mutual benefit of both countries.”

He proposed that HDEC look into partcipating in the government’s Public-Private Partnership (PPP) projects, noting that almost US$20 billion worth of infrastructure projects are set to be rolled out in the next years.

HDEC, One of South Korea’s largest construction and civil engineering companies, builds harbors, terminals, bridges, highways, dams, nuclear and other power plants, petrochemical plants, commercial buildings, as well as high-rise apartments.

Among its best-known projects are the Incheon International Airport, the Kyeong-bu (Seoul-Busan) expressway and more recently, the Songdo Suspension Bridge which is one of the longest in Asia.

The DFA said the meeting was set up by the Philippine Trade and Investment Center (PTIC) as part of the Embassy’s economic diplomacy to advance government’s efforts in attracting more South Korean investment.

Court issues TRO on railway station row

Philippine Daily Inquirer, 02 August 2014

By Miguel R. Camus and Tarra Quismundo


No impact seen on awarding of LRT extension PPP

Henry Sy’s SM Group has won a temporary court order preventing the Department of Transportation and Communication from transferring a railway “common station” in Quezon City from SM City North Edsa to a location near Ayala Land Inc.’s TriNoma shopping mall, which SM Group claimed had violated a 2009 agreement.

The Supreme Court, in a decision on July 30 but released to the public Friday, issued a temporary restraining order (TRO) enjoining the DOTC and the Light Rail Transit Authority from pushing through with the transfer of the common station’s location. The high court further directed the DOTC and the LRTA to submit their comments within 10 days.

The development was the latest in an ongoing row between SM and the DOTC that has spilled over into other areas, including the P65-billion Light Rail Transit Line 1 Cavite extension public-private partnership (PPP) deal.

This particular common station, which aims to link the LRT-1 and Metro Rail Transit Line 3, and eventually MRT-7, would provide a boost to foot traffic to establishments connecting to it, making it desirable to property developers.

While not part of the LRT-1 PPP project, the TriNoma location for the common station was included in the railway deal, further complicating the issuance of a notice of award to sole bidder Light Rail Manila Consortium—backed by Ayala Corp. and Metro Pacific Investments Corp.—that was previously expected this week.

Transportation Secretary Joseph Abaya admitted this Friday when he told reporters that an award would not happen yet partly because the government needed to further study the legal implications of SM’s suit.

“On the common station, we are getting the legal opinion from the OSG (Office of the Solicitor General),” said Abaya, noting that this opinion “gives us comfort” ahead of any award.

He said the DOTC would still proceed with the award possibly next week, given that the high court’s TRO involved only the common station’s location.

The station itself, estimated to cost about P1.4 billion for the TriNoma location, would be bid out separately and would be financed by the government.

It was also about P1 billion cheaper than the location near SM North Edsa because the original location had provisions for MRT-7, according to former LRTA chair Mel Robles, who signed the 2009 agreement with SM.

Jose Ma. Lim, president of Metro Pacific Investments, told reporters last week that they would still conduct a detailed review  on which location was the cheapest and most efficient for their operations and for railway commuters.

Ayala Corp. managing director John Eric Francia, meanwhile, said in an e-mail yesterday that he did not expect further delays to the award but declined to comment on whether Ayala was open to the SM location.

The SM group, through property arm SM Prime Holdings Inc., welcomed the Supreme Court decision.

“SM Prime is not seeking to delay the LRT1-Cavite Extension project. Rather, we are merely asking that the DOTC/LRTA and/or the winning bidder [to] construct the common station component thereof in front of SM City North Edsa, in faithful compliance with the MOA (memorandum of agreement),” it said in a statement Friday.


SC stops transfer of common rail station

Manila Standard Today, 02 August 2014

By Jenniffer B. Austria


The Supreme Court stopped the government from transferring the proposed P1.4-billion common station that will link the three railway systems in Metro Manila to the TriNoma shopping mall of Ayala Land Inc.

SM Prime Holdings Inc. said in a statement the high tribunal on July 30 issued a temporary restraining order against Transportation Department and Light Rail Transit Authority halting the planned transfer of the LRT 1-MRT3-MRT 7 common station from its original location in front of the SM City North Edsa mall.

“The Supreme Court’s TRO reinforces SM Prime’s position in the case for Specific Performance of SM Prime and LRTA’s Memorandum of Agreement dated 29 September 2009  now pending before the Regional Trial Court of Pasay City,” SM Prime said.

SM Prime raised its case to the SC after the Pasay City regional trial court last month denied the company’s  bid to stop the government from building the common station in front of TriNoma in Quezon City.

SM Prime clarified it was not seeking to delay the P65-billion LRT 1-Cavite Extension project and that it was merely asking the government to honor the agreement it signed with the company.

“SM Prime now hopes that the DoTC and LRTA will respect, honor and abide in good faith with the terms of the MoA and continue the construction  of the Common Station on its original location across the SM City North Edsa Annex building, which was started as early as the beginning of the Aquino administration in 2010,” it added.

Under the agreement, LRTA agreed to build the LRT 1-MRT 3-MRT 7 common station in front of SM City North EDSA, naming the station after the mall, in exchange for a grant of P200 million from SM Prime.

The move to locate the proposed common station in front of SM North Edsa was approved by the National Economic and Development Authority-Inter-agency Coordinating Council and by the Neda board on July 7, 2009.