METRO Pacific Tollways Development Corp. (MPTDC) offered the highest bid of P27.3 billion for the P55.52-billion Cavite Laguna Expressway (CALAx) project, besting by about P5 billion the rival bid of San Miguel Holdings Corp. (SMHC).
San Miguel submitted a premium bid of P22.2 billion.
The Department of Public Works and Highways (DPWH) will award the toll road project —one of the government’s public-private partnership (PPP) projects —on June 4.
“The winner here is the Filipino people. The bid floor price is P20.1 billion to P27.3 billion, so it’s worth waiting for it,” Department of Public Works and Highways (DPWH) Undersecretary Rafael Yabut told reporters after the opening of the financial documents for the bidding.
“It’s one big revenue for the government,” he said. “Proceeds will go to the national treasury. The initial toll rate was based on the study. Base is P4.65 per kilometer. It is at par with other toll roads. It seems everything worked perfectly well.”
“This is the biggest single revenue premium that a government agency has generated. Any road development always spurs development, entire community development. By June 4, we will try to finish it. We will be issuing notice of award,” Yabut said.
“I don’t see any more delays,” he added.
“We have been observing the population growth in both Cavite and Laguna and we believe it is higher than the national average, about 50 percent higher than the average. There are about 3 million people in Cavite and 2 million in Laguna,” Jose Ma. K. Lim, president and chief executive officer of MPIC, told reporters on the sidelines of the opening of the financial documents for the project.
“So we did expect that because of the delay, the traffic would probably start off at a higher level because of the population growth. There have also been commercial establishments and developments that helped traffic start off at a higher rate,” he added.
Lim further said that “In the meantime we were able to do a more intense review of the cost estimates, which we believed went down, particularly steel and the petroleum-related components. That, plus our intense desire to build more roads, caused us to accept a slightly lower yield than what we assumed in the previous bid.”
“So, all of these factors will show a more aggressive bid. Well, as you know, the 20 percent bid premium is payable at the start and therefore, the impact on overall profitability is somewhat muted by your aggressiveness of the bidding because it is spread out over 10 years basically,” Lim said.
Last week, MPTDC and SMHC submitted their pre-qualification documents, technical proposals and financial bids for CALAx.
MPCALA Holdings Inc., which is led by MPTDC; MTD Capital Bhd. and Optimal Infrastructure Development Corp. of San Miguel Corp. submitted pre-qualification bids documents for the CALAx project. MPCALA Holdings, Inc. is a subsidiary of Metro Pacific Investments Corp.
The CALAx project is a 45-kilometer toll road project connecting the provinces of Cavite and Laguna. Private investors will finance, design, construct, operate and maintain the expressway project, which has an estimated investment value of P35.42 billion with a premium of P20.10 billion.
The project starts from the Cavite Expressway (Cavitex) in Kawit, Cavite and ends at the Mamplasan interchange of the South Luzon Expressway (SLEX) in Binan, Laguna. It will connect Cavite and Laguna directly, greatly reducing travel time between the two provinces.
The two highly industrialized and urbanized provinces are home to hundreds of international and multinational electronic, semiconductor, automotive and manufacturing companies in addition to residential developments.
Faster than industry growth
Meanwhile, Ramoncito Fernandez, MPTDC president, said that in line with this project the company is hoping they will grow a little faster than the industry.
“Right now the industry is 330 km and we have about 61 percent of the industry. The industry will grow [and]our hope is we will grow a little faster than the industry. That’s our hope,” he said.
“Today, I think Don Muang is a 21-km elevated expressway, then we have Vietnam today, only about less than 10 km. Hopefully we want to double the size in Vietnam,” Fernandez said.
MPIC has stakes in Thailand’s Don Muang Tollway Public Company Ltd. (DMT) and in Vietnam’s Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII).
DPWH said that the issuance of the notice of award (NOA) is on June 4 while compliance of all requirements in the NOA by the winning bidder is June 5 to 23, 2015.
They will notify the winning bidder of its compliance with the requirements of NOA on June 30 and the contract signing is anywhere from July 1 to 6, 2015.
The preparation of detailed engineering design is from July 2015 to July 2016 and the construction period is from July 2016 to July 2020 while the O&M [operation and maintenance]period from July 2020-July 2050.
Sought for comment, SMC president Ramon S. Ang said he was okay with the result of the CALAx bid “because there was no cheating.”
He added that SMC’s participation in the bid was “good for everybody and good for the country” because competition made the bidders bid higher.
Ang said SMC will continue to participate in other infrastructure projects that the government will be bidding out.
“There is no regret about losing the bid. I rarely regret making a losing bid,” he said.