Business leaders oppose CALAX rebid favoring San Miguel

Business leaders are opposing the inclination of the Aquino administration to rebid the controversial multi-billion-peso public-private partnership (PPP) toll road project.

 

Management Association of the Philippines Governor Peter Wallace said the rebidding might lead to a higher price of the project and eventually expensive toll fees.

 

"How can they do a new bid now? Everyone knows everyone else's pricing. Won't this lead to a higher price for the project so we all have to pay higher tolls for the winner to recover his investments?"

 

President Benigno Aquino III on Wednesday said he is "inclined to think that a re-bid will be the proper course of action on this particular issue." 

 

However, Communications Secretary Herminio Coloma noted there is no final decision on the matter at hand.

 

"According to the Executive Secretary (Paquito Ochoa), this matter is pending consideration, and whatever the final decision will be, such decision shall definitely have legal and factual basis," Coloma told GMA News Online.

 

On the other hand, Public Works and Highways Secretary Rogelio Singson said, "Wala pa," when asked regarding the department's plans and President Aquino's orders.

Defective bid security

 

The P35.42-billion Cavite-Laguna Expressway (CALAX) project under the Department of Public Works and Highways (DPWH) received a P20.1 billion bid from the San Miguel Corp. subsidiary Optimal Infrastructure Development Inc. and P11.66 from Team Orion, the consortium of Ayala Corp.’s AC Infrastructure Holdings Corp. and Aboitiz Equity Ventures Inc.’s Aboitiz Land Inc.

 

The San Miguel subsidiary, however, was disqualified due to a defective bid security. 

 

For his part, Ramon Del Rosario Jr., president and CEO of property developer Philippine Investment Management Inc., said seeking fresh bids for the project has no legal basis. 

 

"As a director of Ayala Corp. and an advocate of transparency and good governance, I share the view that there is no legal basis for a CALAX rebid as the original DPWH-led process was conducted above board, transparently and in full compliance with the BOT (Build Operate Transfer) Law," he said.

 

Del Rosario said the rebid might have "a severe negative impact on investor confidence in the PPP program and the entire bidding process."

 

Ramifications

John Walker, executive chairman of Macquarie Capital Infrastructure, Utilities and Renewables, said the rebidding might result in a lot of ramifications.

 

"At the moment, the Philippines is the darling of PPP in Asia, but if there is some interruption of the proper process that has not been followed from the perspective of foreign investors, this would be a big setback."

 

A total of eight PPP projects were awarded by the government since it launched the program in 2010, including the extension of Light Rail Transit (LRT) Line 1 to Cavite, two phases of classroom projects, the fare collection system for LRT and Metro Rail Transit, the renovation of the Mactan-Cebu airport, as well as expressways and the modernization of the Philippine Orthopedic hospital.

 

An Oct. 17 report of CLSA noted that "a rebid can be construed as the government favoring San Miguel to give them another chance, despite the fact that their bid was found by DPWH to have been non-compliant with the rules."

 

“While the government would “lose out” on P8 billion worth of San Miguel’s bid premium on the CALAX project, losing investor interest for the other projects in the pipeline would be a bigger loss for the government in the longer term.” – With a report from Andreo C. Calonzo/VS, GMA News