Grim CALAX rebid scenario

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OVER the weekend, the government made the announcement that the Cavite-Laguna Expressway (CALAX) project will undergo a rebidding. The decision had apparently been reached notwithstanding President Aquino’s earlier statement that he, himself, entertained doubts about the authenticity of the claim made by disqualified bidder San Miguel Group regarding the “bid premium” it allegedly offered for the Cavite-Laguna Expressway (CALAX) project.

We recall that while in China for the Asia Pacific Economic Cooperation (APEC) Summit, President Aquino expressed to media the apparent uncertainty he had over the P20-billion bid premium which the Ramon Ang group claimed it made, compared to the P11-billion plus offered by the winning bidder, Ayala-Aboitiz consortium.

According to the President, the losing bidder broke the seal of the bid documents and took it out of the hands of a neutral party – in this case, the Bids and Awards Committee of the DPWH.

It appears President Aquino clearly understands that he cannot whimsically award the project to a disqualified bidder. Yes, the President is correct: the P20 billion premium is a mere say-so that was made outside of the process and venue laid down by law.


There is no way the claim can be legally proven.

So, now the public and the business community are even more confused: If the President doubts the claim of the Ramon Ang group, why has he gone for a rebidding?

The decision to rebid CALAX paints a rather grim scenario. For one, there are fears that no other investors, except for the disqualified Ramon Ang group, would participate in the rebidding.

Now, if there is only one participant in the rebidding, the scenario is that Ramon Ang stands to make the President really beholden to him.

That’s because the fate of the entire rebidding process will depend on the whims of the San Miguel group. No other businessman in the country will have as much leverage on the Palace as what the San Miguel boss would have. We hope President Aquino and his advisers realize this.

So, what if the Ramon Ang group rebids but does not come up with the same P20 billion premium which the government is apparently salivating for?

Since there will be no real competition in the rebidding, what if the San Miguel group puts a premium of, say, just a measly P100 million? Would the President still award the project to them? What happens then to the housing projects, which the President says he can build out of the superior bid premium of Ramon Ang?

The fact is there is no assurance the government will get that P20-billion in a rebidding. Unless it sets a floor price, Ang and whoever would have the gall to participate in the rebidding are not really bound to offer such a premium.

It is also a fact that the San Miguel group would now be in a position to use that promise of a P20-billion bid premium as leverage. The President can now be held hostage if the Ang group says they won’t offer the same premium in the rebidding unless they get more favorable concessions from the Aquino administration.

In fact, nothing would stop the Ang group from backing out from a rebidding, which would then leave the President holding an empty bag.

President Aquino also seems to be clinging to a mistaken notion when he says he cannot defend the award to the winning bidder amid the claim of a superior bid by a disqualified bidder. Just like him, not all Filipinos are buying the claim of a superior bid by that bidder hook, line and sinker.

Not all Filipinos are salivating for that imagined additional P8-billion plus which the disqualified bidder claims he has over the winning bidder. In fact, there is widespread public sentiment that a rebidding would only lead to higher toll fees for Filipino commuters.

That so-called “debate” over the alleged premium offered by a disqualified bidder apparently exists only in the mind of the President.

Moreover, this decision to rebid will embolden disqualified bidders to wreak havoc on the bidding process, particularly for major infrastructure projects that the country urgently needs. This will set a bad precedent whereby disqualified bidders can simply open an envelope – and possibly manufacture – and claim a superior bid.

One word best describes that situation: anarchy. Such a precedent would compel the government to rebid a project each time a bidder makes a similar claim.

With the rebidding, the President is gambling with two things. First, he is gambling with the P11 billion premium from the winning, qualified bidder that is already the government’s for the taking. Second, he is gambling with the established legal processes.

Now that the decision has been made to rebid the CALAX project, he should ask one last question: Is it worth taking all these risks just to appease the tantrums of a disqualified bidder?

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3 Comments

  1. These are all sound observations, but at this point, I don’t see Aquino changing his mind still again and cancel the rebid. We have to assume that it will push through, period. The thing to do now is for the DPWH to draft rules that will prevent the scenarios presented here. Setting a floor price is tempting but may dissuade other bidders that would prevent the SMC sole bidders-ship mentioned, not to mention bring up toll fees. Perhaps Atty. Dulay has some suggestions?

  2. The technicality that disqualified SMC is the kind of technicality that one invokes only if he doesn’t like the face of the bidder. Let me give you a case when the powers that be likes to give someone a favor. The government entered into a contract with Henry Sy’s SM where the terminal for the LRT extension was going to be erected in front of SM North which the government studies showed was the best location. Henry Sy paid the government P200 million for this. Then this BS’s administration dishonored this agreement and unilaterally gave the proposed terminal to the Ayalas by announcing that the new location will be in front of Trinoma where it is inconvenient for train passengers to reach. Not contented with this breach, they said they were not going to return the P200M. You know that if this happened in the more honorable world of the Mafia, the blackguard responsible will now be the object of a professional assassin’s undivided attention. If they can do this to a signed and sealed agreement, why couldn’t they just simply ignore the utterly trivial technicality of SMC? Is it true that the government has now a fourth branch, and that is none other than the Ayala conglomerate?

  3. Good, Atty. Brigido Dulay. PLease contiue to write your enlightening condemnation of ABNOY’s and the Aquino Adninistration’s criminal corruption, ignorance and weird decisions. Thanjk you very much. sir.