PPP: DPWH sets Swiss challenge for NLEX-SLEX link road project this year

The government will start seeking bids for the North Luzon Expressway (NLEX)-South Luzon Expressway (SLEX) connector road project within the first quarter of this year, said the Department of Public Works and Highways (DPWH).
The auction means that other companies will have the chance to beat out the P18-billion offer of the Manila North Tollways Corp. (MNTC), the tollways unit of Metro Pacific Investments Corp. (MPIC) that currently operates NLEX and had long been seeking to connect the expressway to the south corridor.
DPWH Public-Private Partnership (PPP) Service officer-in-charge Ariel C. Angeles said on Saturday that his office is set to publish the invitation to match MNTC’s connector road offer within the first quarter of this year.
According to him, the DPWH is just awaiting the final approval of the National Economic and Development Authority (NEDA) Board, which is scheduled to meet on January 22.
Last December, NEDA’s Investment Coordination Committee-Cabinet Committee (ICC-CabCom) ruled that the contract should be bid out via Swiss challenge—the route the government takes when dealing with unsolicited proposals, by accepting competing offers and giving the original proponent the right to match them.
In 2010, the MNTC submitted an unsolicited proposal for the connector road, and on January 21 last year, signed a joint venture agreement with the Philippine National Construction Corp. (PNCC)—the holder of the NLEX franchise—to build the road together.
Last July 7, however, the Department of Justice (DOJ) issued an opinion on the joint venture proposal, saying that the NEDA Board approval of the agreement between MNTC and PNCC was “without factual basis or justification.”
The DOJ also stated that under Section 3 of the Build-Operate-Transfer (BOT) Law, the DPWH could proceed with the consideration of the unsolicited proposal.
The MNTC proposal was then again subjected to NEDA review.
In a statement, Mr. Angeles said: “Once it gets NEDA Board approval on January 22, we have 80 days to settle the technical terms of MNTC’s proposal with them, such as the length of the connector road.”
MNTC’s original unsolicited proposal involved a 13.5-kilometer elevated road that will link North and South Luzon Expressways, including a five-kilometer common alignment from the Polytechnic University of the Philippines (PUP) to Buendia Avenue in Makati City.
Citra Metro Manila Tollways Corp., also pursuing its own proposed connector road project with San Miguel Corp., has already obtained financing for the common alignment portion of the road. The San Miguel group’s P26.5-billion Metro Manila Skyway Stage 3 project is a six-lane 14.8-kilometer expressway from Buendia Avenue in Makati City to Balintawak in Quezon City.
The contract for the Skyway Stage 3 project was approved by Malacañang in September 2013.
“This would leave MNTC with an eight-kilometer connector road,” said Mr. Angeles.
Asked about his opinion on the Swiss challenge, MNTC president Rodrigo E. Franco said: “If that’s the only way to do the project, we have no choice. Our concern is the project will take longer. We lost two years because of the government’s order for us to shift to JV (joint venture) mode. Now, we’re going to restart the unsolicited project with a Swiss challenge.”