The Philippine National Construction Corp. (PNCC) and Metro Pacific Investments Corp. (MPIC) have gone into signing an agreement to build the P22.95-billion Connector Road under the existing concession of the North Luzon Expressway (NLEX).
“It will be an amendment of the existing STOA [Supplemental Toll Operations Agreement],” said Christopher Lizo, Metro Pacific Tollways Corp. chief financial officer.
On November 29, PNCC and MPIC signed an agreement that the connector road project will be done under Manila North Tollways Corp., which means that MNTC signed an agreement with PNCC and the terms of the agreement are substantially the same as the terms of the existing concession of NLEX.
Metro Pacific had proposed a 13.4-kilometer four-lane expressway that will run over Philippine National Railway lines from Caloocan City to Makati City, that will link the north and south of Luzon with a total cost of P22.95 billion.
Under the agreement, the companies will have a 6-percent share in gross revenue and will maintain their 2.5-percent equity in the connector road project.
Earlier, Rodrigo Franco, MNTC president and chief executive officer, said that the amendment of the STOA is much easier and faster compared to formulating a new contract.
“For the connector road, I think we have to look at our financing strategy first in consultation with MPIC,” Lizo said.
He also said that the concessionaire is still firming up its funding plans which it has to consult first with its parent company.
“The last obstacle in the agreement is the TRB approval. On December 17, TRB will have its board meeting so hopefully . . . the proposal submitted to TRB is a joint investment proposal by PNCC and MNTC so from the point of view of TRB, PNCC and MNTC should have agreed already on commercial agreement and the structure of the implementation of the connector road,” Lizo said. TRB is the Toll Regulatory Board.
The final joint venture structure is also subject to government approval. MPTC is also a toll road subsidiary of MPIC.
“The company is still abiding to its June 2016 target,” Lizo said.