Investment recovery still up for negotiation
MANILA North Tollways Corp. (MNTC) said its proposed P5-billion expansion design for the North Luzon Expressway (NLEX) has been approved by the Toll Regulatory Board (TRB), which means construction can immediately commence.
The plan aims to expand certain portions of the 84-kilometer NLEX where there is traffic buildup in order to decongest the expressway, particularly in key toll exits.
“The design was approved at their last board meeting last month, but we still have to negotiate the investment recovery. The target investment is P5 billion, for an additional one lane each direction from Sta. Rita to San Fernando and then in Sta. Inez, one lane will become two lanes,” MNTC president and chief executive officer Rodrigo Franco told reporters.
He said the targeted start of implementation is when the plan is approved. “Immediately after it is approved, we can start the construction because there is no need for a ROW [right of way]acquisition,” he explained.
Last year, MNTC submitted a proposal to the TRB to widen the expressway from Bocaue, Bulacan up to San Fernando City, Pampanga.
The road-widening will help decongest traffic in NLEX toll exits especially during the Easter, Christmas and All Saints’ Day holidays when people travel to their hometowns in northern Luzon.
From Bocaue up to San Fernando, MNTC is expanding the expressway from two lanes to three.
MNTC earlier said two sections will be expanded: the stretch from Dau to Santa Ines and from Santa Rita to San Fernando, all cutting across Pampanga Province. The plan is to add three lanes each direction to the Santa Rita to San Fernando segment.
The Dau to Santa Ines segment currently has two lanes — one lane in each direction.
Franco said that the vehicular flow in that segment is beginning to increase although it has not yet reached critical level.
Citing pronouncements from the TRB, he said that sooner or later, the NLEX would reach its service quality level limit. NLEX is set to hit critical stage by 2018, according to a TRB assessment.
MNTC is a unit of Metro Pacific Tollways Corp. (MPTC), which in turn is a subsidiary of infrastructure conglomerate of Metro Pacific Investments Corp. (MPIC) led by tycoon Manuel V. Pangilinan.
The expansion project will start as soon as MNTC acquires the notice to proceed from the TRB.
“We’ll be assuming there will be a toll hike. Before we implement the project, we have to reach an agreement first on the investment recovery, which is part of the negotiation. There’s the periodic toll rate adjustment, a separate issue from the investment in the NLEX expansion. Investment recovery does not necessarily mean toll adjustment,” Franco said.
“There are several ways of investment recovery, like direct reimbursement from the government, extension of the concession period, or toll hikes,” Franco said.
Misses revenue goal
In February, MNTC said it failed to meet its P8 billion revenue goal because it was not allowed to increase its toll rates.
Franco and MPTC president Ramoncito Fernandez had warned that they might find it difficult to achieve their revenue goal.
MNTC said that on a daily basis, the NLEX has an average traffic volume of “close to 180,000” vehicles, while the Subic-Clark-Tarlac Expressway (SCTEX) has some 28,000 and Cavitex has about 101,000.
In 2014, MNTC said average daily traffic on NLEX reached close to 183,000 vehicles compared to 163,400 vehicles in 2013.
According to its concession agreement, MNTC was supposed to hike its toll by 11 percent effective January 2013. The concession allows for toll adjustments every two years.
In November last year, MNTC said that its failure to hike its toll rates would translate to about P1.8 billion in revenue losses.
It filed a petition with the TRB for the bi-annual adjustment of toll rates in NLEX, which was supposed to fall due on January 1, 2015, under its concession terms. It said this rate adjustment was on top of an earlier petition it submitted in 2012, which was supposed to have taken effect in January 2013.
The latest petition would bring the cumulative toll rate adjustment to 15 percent, of which 12 percent, according to the corporation, is long overdue.
MNTC reported net profit of P681.7 million in the January to March period, up from P666.2 million in the same period last year.
It said core income increased 9 percent to P731.4 million in the first quarter of 2015 from the P670.4 million recorded during the first quarter of 2014. Toll revenues for the quarter grew 7 percent to P1.97 billion, from P1.83 billion a year earlier.
Franco also said that development of the integrated NLEX and SCTEX toll collection system is currently underway.
At present, tolls at NLEX from Mindanao Avenue to Sta. Ines amount to P218 for Class 1 vehicles (cars, jeepneys, pickup trucks and vans), P544 for Class 2 vehicles (two-axle trucks, buses and vans), and P652 for Class 3 vehicles (trucks and trailers with three or more axles).