Business World, 11 January 2015
By Chrisee J.V. Dela Paz
THE GOVERNMENT will begin seeking bids for a contract to build an eight-kilometer elevated toll road that will link the North Luzon Expressway (NLEx) and the South Luzon Expressway (SLEx) within the first quarter of the year, a Public Works official said over the weekend.
The move means other companies would have the chance to beat out the P18-billion offer of the Manila North Tollways Corp. (MNTC), the tollways unit of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) that currently operates NLEx and had long been seeking to connect that expressway to the south corridor.
Ariel C. Angeles, officer-in-charge and director of Public-Private Partnership Service of the Department of Public Works and Highways (DPWH), said in a phone interview on Saturday that his office is set to âpublish the invitation to match MNTCâs Connector Road offer within the first quarter this year.â
The DPWH is just awaiting final approval from the National Economic and Development Authority (NEDA) Board, which is scheduled to meet on Jan. 22, according to Mr. Angeles.
Last month, the NEDAâs Investment Coordination Committee-Cabinet Committee ruled that the contract should be bid out via Swiss challenge — the route the government takes when dealing with unsolicited proposals, by accepting competing offers and giving the original proponent the right to match them.
MNTC first submitted an unsolicited proposal in 2010 for the connector road, and on Jan. 21 last year, signed a joint venture agreement with state-run Philippine National Construction Corp. (PNCC) — the holder of the NLEx franchise — to build that road together.
But seven months later, on July 7, the Department of Justice (DoJ) issued an opinion on the joint venture proposal, saying that the NEDA Board approval of the agreement between MNTC and PNCC is âwithout factual basis or justification.â
The DoJ opinion also stated that the DPWH, under Section 3 of the Build-Operate-Transfer Law, could proceed with the consideration of the unsolicited proposal.
The MNTC proposal was then again subjected to NEDA review.
âOnce it gets NEDA Board approval on Jan. 22, we have 80 days to settle the technical terms of MNTCâs proposal with them, such as the length of the connector road,â Mr. Angeles said over the weekend.
The original unsolicited proposal of MNTC involved a 13.5-kilometer elevated road that will connect North and South Luzon expressways, including a five-kilometer common alignment from the Polytechnic University of the Philippines (PUP) to Buendia Avenue in Makati City.
Citra Metro Manila Tollways Corp., which is also pursuing its own proposed connector road project with San Miguel Corp., has already obtained financing for the common alignment portion of the road. The San Miguel groupâs P26.5-billion Metro Manila Skyway Stage 3 project is a six-lane 14.8-kilometer expressway, from Buendia Avenue in Makati City to Balintawak in Quezon City, connecting the SLEx to NLEx.
MalacaĂ±ang approved the contract for the Skyway Stage 3 project in September 2013.
âThis would leave MNTC with an eight-kilometer connector road,â Mr. Angeles said.
Sought for comment, MNTC President Rodrigo E. Franco said via text message on Saturday: âIf thatâs the only way to do the project, we have no choice. Our concern is the project will take longer. We lost two years because of the governmentâs order for us to shift to JV (joint venture) mode. Now, weâre going to restart the unsolicited project with a Swiss challenge.â
SEGMENT 9 OPENS IN MARCH
Under the Supplemental Toll Operations Agreement, the NLEx-SLEx connector road or Segment 10.2 was to be integrated to Segment 10.1, a 5.65-kilometer road that starts where Segment 9 ends on MacArthur Highway and stretches all the way to C-3 Road.
Segment 9 is a 2.4-kilometer portion linking the NLEx to MacArthur Highway. In a statement released yesterday, MNTC said it has âstarted the construction of the NLEx Karuhatan Valenzuela Interchange, the last major infrastructure needed to complete the Segment 9.â
âIt [Segment 9] is expected to be completed in March this year,â the statement read.
The NLEx connector road would link from C-3 in Caloocan City to the PUP campus in Sta. Mesa, Manila. Parts of the segment will be elevated above the rail lines of the Philippine National Railways.
The three projects would be called the NLEx Metro Expressway Link Project.
MPIC is one of three major Philippine units of Hong Kongâs First Pacific Co. Ltd., the others being Philippine Long Distance Telephone Co. (PLDT) and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld.
Philippine Daily Inquirer, 08 December 2014
By Miguel R. Camus
âUNSOLICITED PROPOSALâ TO REQUIRE SWISS CHALLENGE
MANILA, PhilippinesâThe Department of Public Works and Highways (DPWH) is closing off a joint-venture option with Manuel V. Pangilinan-led Metro Pacific Tollways Corp. for the latterâs proposed P18-billion Metro Manila âconnector roadâ in a move that will further delay the project that is already a year behind schedule.
Another legal review conducted over the last few months by the government resulted in a decision that the 8-kilometer elevated toll road, aimed at easing congestion in the capital district and increasing access to the port area in Manila, should revert again to an unsolicited proposal.
That move, however, would require a Swiss or competitive challenge as well as another approval from the National Economic and Development Authority (Neda), resulting in more time lost before construction can begin.
âWe will propose to Neda to go back to the original unsolicited proposal with Swiss challenge,â Public Works and Highways Secretary Rogelio Singson said in a text message last week. He cited a Department of Justice opinion last July questioning the joint-venture route between Metro Pacific and the state-run Philippine National Construction Corp. (PNCC).
For the tollroad, it could mean at least six months before construction can start late next year, according to Rodrigo Franco, president of Manila North Tollways Corp., the subsidiary of Metro Pacific Tollways that operates North Luzon Expressway.
A Swiss challenge in this case means other groups will be allowed to submit offers to build the connector road that seeks to link NLEx and the South Luzon Expressway, bypassing traffic-choked roads within Metro Manila. Under the rules, Metro Pacific has the right to match rival offers to finally win the project.
âWe have been advised by DPWH that they are headed toward recommending it [connector road] as an unsolicited proposal,â Franco said in a separate interview.
Franco noted that because the process could add another âsix to seven monthsâ before construction could begin, he expected the connector road to be completed in late 2017 to early 2018. Originally, the group was hoping to complete the tollroad before President Aquino steps down in mid-2016.
The delays in this tollroad are mainly because of disagreements within the government on how the project structure should be implemented.
The connector road, which is expected to start at the C-3 road in Caloocan City and end in PUP Sta. Mesa in Manila, was initially submitted as an unsolicited proposal during the previous administration.
Then the transportation department last year pushed for a supposedly faster routeâvia a joint venture with PNCC, which holds the franchise for both NLEx and SLEx.
Metro Pacific agreed since a similar structure was implemented for the 14.8-km Skyway Stage 3 âconnector tollroadâ of San Miguel Corp. and Indonesiaâs Citra Group. Skyway Stage 3 started construction this year and could be finished as early as 2016.
The joint venture proposal with PNCC ran into trouble after the Department of Justice on July 7 said that the Neda Boardâs decision to approve this structure âappears to have been issued beyond its powers and without factual basis or justification.â
It took several more months for the government to confirm that it would not recommend proceeding with the joint-venture option, leading to the present direction of the DPWH.
The Philippine Star, 23 October 2014
MANILA, Philippines – The government said yesterday Metro Pacific Investments Corp. (MPIC) would have the last say on how to undertake the P18-billion toll road connecting the North Luzon expressway and South Luzon expressway.
Public Works Secretary Rogelio Singson said on the sidelines of the Philippine Investment Conference organized by the CFA Society Philippines that MPIC would have the final say on whether to undertake the project under the unsolicited mode or under a joint venture scheme.
âBoth are legally possible. They are the proponent and at the end of the day we have to respect what the proponent is saying,â Singson said.
During the last meeting of the National Economic and Development Authority (NEDA) Board, Singson said that President Aquino has instructed the Department of Public Works and Highways (DPWH) to thresh out the legal hindrances to the connector road.
âIn the last discussion among the Cabinet Cluster, we have been asked to finally sort out the legal aspect. Whether it is best on a joint venture or if it follows the original proposal under the Build Operate Transfer Law,â Singson said.
As early as August 2012, the government was supposed to undertake the Swiss Challenge process as stated under the BOT Law. However, the Department of Transportation and Communications (DOTC) recommended that MPICâs 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.
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 1894.
The NLEX SLEX connector project was originally submitted to the DPWH in May 2010 under the BOT Law.
However, the Department of Justice (DOJ) issued a legal opinion last July stating that the project should be reverted back to the unsolicited proposal and should be subjected to a Swiss Challenge.
Under the unsolicited proposal mode, the project would have to be resubmitted to the NEDA Board for approval and interested proponents would have to be given 90 days to submit counter proposals.
Singson said the DOJ opinion allows both options wherein MPIC could undertake the project through the joint venture agreement or via its unsolicited proposal.
âIt is up to MPIC and we are in discussions with DOTC and DOJ,â he added.
Singson explained that the DOTC is looking at using the right-of-way of the Philippine National Railways (PNR) wherein the connector road would be above the proposed P167 billion North South railway project from Manila all the way to Legazpi City in Albay.
The DPWH chief clarified that the affected portion of the proposed connector road is only the eight-km segment from the PNR to the common alignment at the Polytechnic University of the Philippines (PUP) in Sta. Mesa being undertaken by diversified conglomerate San Miguel Corp. (SMC) as part of the P26.5 billion Metro Manila Skyway Stage 3 project.
âThis week we should be able to resolve that as the President feels that this project is a solution to the port congestion. We all agreed that is a solution to the port congestion,â he added.
The Philippine Star, 07 October 2014
By Lawrence Agcaoili
MANILA, Philippines – Infrastructure giant Metro Pacific Investments Corp. (MPIC) said the P18 billion toll road connecting the North Luzon expressway and South Luzon expressway wonât be completed within the term of President Aquino.
MPIC chairman Manuel V. Pangilinan said the decision of the government to subject the connector road to a Swiss Challenge based on the opinion issued by the Department of Justice would delay the project by at least two years.
âNo way we can finish by the time the President steps down. Itâs about a two-year delay,â he said.
Pangilinan said MPIC was looking at finishing the connector road within the term of President Aquino.
âWe had anticipated finishing sometime middle of 2016 by the time the President steps down. Now it may be completed by middle of 2017 onwards,â he added.
The MPIC chairman said the project would have to be resubmitted by the National Economic and Development Authority (NEDA) Board for approval.
The Justice department issued a legal opinion last July stating that the project should be reverted back to the unsolicited proposal and should be subjected to a Swiss challenge after deeming the joint venture between MPICâs Metro Pacific Tollways Development Corp. (MPTDC) and state-run Philippine National Construction Corp. (PNCC) illegal.
Rappler, 07 October 2014
Manuel V. Pangilinan, Metro Pacific Investments Corporation (MPIC) chairman, says the project is likely to be completed in mid-2017 because of the Swiss challenge on their unsolicited project proposal
MANILA, PHILIPPINES â The P18-billion ($402.21-million*) North Luzon and South Luzon expressway (NLEX-SLEX connector road) will not be ready by 2016, as the proposed Swiss Challenge will delay the target completion within the term of President Benigno Aquino III.
The project is likely to be completed in-2017, following the Department of Justice (DOJ) opinion to subject the proposal to a Swiss Challenge, said Manuel V. Pangilinan, chairman of infrastructure giant Metro Pacific Investments Corporation (MPIC).
The DOJ had earlier issued an opinion that the project must go through the process as the joint venture between MPICâs Metro Pacific Tollways Development Corporation (MPTDC) and state-run Philippine National Construction Corporation (PNCC) is illegal.
âWe had anticipated finishing sometime middle of 2016 by the time the President steps down. Now [with the Swiss challenge], it may be completed by middle of 2017 onwards,â Pangilinan said Monday, October 6.
The project will be resubmitted by the National Economic and Development Authority (NEDA) Board for approval.The NEDA Board approved the amendment or extension of the existing joint venture between MPTDC and PNCC, including the supplemental toll operations agreement (STOA) to cover the extension of the franchise of NLEX under Presidential Decree No. 1894.
The NLEX-SLEX connector road project was originally submitted to the Department of Public Works and Highways in May 2010 under the Build-Operate-Transfer (BOT) scheme.
Public Works Secretary Rogelio Singson confirmed that the proposed connector road would have to be resubmitted to the NEDA Board for approval because the common segment in the original unsolicited proposal would no longer be included.
Singson added that the Swiss Challenge process would likely be completed by the first quarter of 2015. âTo be realistic, it might go about 90 days so it might be early first quarter next year,â he said.
The process can take 3 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 has the right to match the highest bid.
MPIC agrees to subjecting its unsolicited connector road project proposal to a Swiss Challenge.
The project will connect NLEX and SLEX via two roads. Segment 9, worth P1.9 billion ($42.5 million), will connect NLEX to MacArthur Highway in Valenzuela and should be completed in August this year. Segment 10, worth P10 billion ($223.50 million) starts from the Mindanao Avenue exit of NLEX to North Harbor and should be complete by August 2015.
NLEX would be connected to the common alignment at the Polytechnic University of the Philippines (PUP) in Sta Mesa to the P26.5-billion ($592.19 million) Metro Manila Skyway Stage 3 project of diversified conglomerate San Miguel Corp. (SMC). (READ:Â Why same firms are vying for PH infra projects) âÂ Rappler.com
*$1 = P44.75
The Manila Times, 06 October 2014
By Rosalie C. Periabras
METRO Pacific Investment Corp.âs (MPIC) P18-billion North Luzon Expressway (NLEX)-South Luzon Expressway (SLEX) connector road project will be open for bidding after a government decision to subject the proposed four-lane expressway to a Swiss challenge.
Ramon Fernandez, Metro Pacific Tollways Corp. (MPTC) president, told reporters that government is indeed returning the project proposal, which will be open to a Swiss challenge.
A Swiss challenge is a form of public procurement that requires a government agency that has received an unsolicited bid for a public project or services to publish the bid and invite third parties to match or exceed it.
âWe are disappointed,â Fernandez said, explaining that the project would help solve traffic congestion in Metro Manila.
Earlier, Philippine National Construction Corp. (PNCC) and MPIC signed an agreement for the construction of the connector road under similar terms as the existing MPIC concession rights for the operation of NLEX through the Manila North Tollways Corp (MNTC).
MPIC had proposed a 13.4-kilometer, four-lane expressway from Caloocan City to Makati City that will link the North and South Luzon expressways.
Last March 31, MNTC said that it might raise P10 billion in the fourth quarter this year to help finance the project. The company had cited two options: to create a new joint venture (JV), or to pursue the project using the existing franchise and amend the current Supplemental Toll Operations Agreement (STOA).
The MNTC earlier said that the directive from the government is to do a JV with PNCC.
PNCC holds the franchise for North Luzon Expressway and the South Luzon Expressway, while MNTC holds the STOA for Segment 9 and 10 of NLEX.
Segment 9 is a 2.4-kilometer portion linking the NLEX to McArthur Highway, and Segment 10 is a 5.65-kilometer road from Mindanao Avenue in Quezon City going to the North Harbor.
MNTC president Rodrigo Franco, meanwhile, said that the firm is seeking to raise P10 billion after getting the Toll Regulatory Boardâs (TRB) approval of the Supplemental Toll Operations Agreement.
The Department of Justice (DOJ), however, ruled that pursuing the project as a joint venture was âwithout factual basis or jurisdiction,â and called for reinstating the project as an unsolicited proposal subject to a Swiss challenge.
Department of Public Works and Highways Secretary Rogelio Singson said that the DOJ opinion prompted government to bring the proposal back to the proponent and treat it as unsolicited proposal open to a Swiss challenge.
Reuters, 02 October 2014
Oct 2 (Reuters) – Manila’s move to open up bidding for a major toll road means the completion of the project will be delayed by up to two years to 2018, according Metro Pacific Investments Corp, the Philippine conglomerate that first proposed the project.
Comments by Metro Pacific, partly-owned by Hong Kong’s First Pacific Co Ltd, come as an inter-agency body prepares to make a final decision on approving the tender process next week. Bidding is expected to take six months.
Metro Pacific first submitted as early as 2011 an unsolicited proposal for the project, saying the 13.5-kilometre (8.4-mile) toll road would require 22 billion pesos ($490 million) to construct.
“No way we can finish by the time the President steps down,” Metro Pacific’s chairman Manuel Pangilinan told reporters.
“We had anticipated finishing it some time in the middle of 2016,” Pangilinan said, referring to the end of the single six-year term of President Benigno Aquino.
The toll road is now expected to be completed late in 2017 or early in 2018.
The project will connect provinces north and south of the capital, effectively bypassing congested roads of Manila.
Last year the government decided Metro Pacific could partner with state-run Philippine National Construction Corp to forego a bid challenge from other interested companies.
However, the Justice department in July recommended that the government treat Metro Pacific’s offer as an unsolicited proposal open to counter bids because a joint venture with the state firm would also be subject to challenges.
Cosette Canilao, head of the Public-Private Partnership (PPP) Center overseeing the development of major infrastructure under the PPP scheme, said the toll road project will need the approval of an inter-agency body headed by President Aquino that will meet next week.
Bidding for the project is expected to be completed six months after the inter-agency’s approval.
Metro Pacific’s president and chief executive Jose Ma. Lim said the company has attracted offers from foreign groups to partner for this project.
“There is interest from other groups, including foreign funds, for our toll road,” Lim said. Metro Pacific also has interests in water utilities, hospitals and power distribution and generation.
(Reporting by Neil Jerome Morales; Editing by Kenneth Maxwell and Greg Mahlich)