PPP: San Miguel to match offer of MNTC for SCTEX

San Miguel Corp. was one of the two groups that have expressed interest in matching the P3.5-billion offer of Manila North Tollways Corp. (MNTC) to operate and maintain the Subic-Clark-Tarlac Expressway (SCTEX).

Bases Conversion and Development Authority (BCDA) Vice-President for Financial Services Group Nena D. Radoc disclosed that San Miguel had bought bid documents for the SCTEX contract and attended a closed-door pre-bidding conference yesterday, January 6.

The government is currently seeking bids to appoint a new long-term operator for the 94-kilometer toll road.

According to Ms. Radoc, the government already ironed out kinks, including concerns that had been raised earlier by the MNTC.

“There are some concerns raised by the prospective investors and MNTC, such as the legality of the price challenge and the responsibilities of the winning bidder, but we’ve explained everything and we’ve already agreed and clarified things out,” said Ms. Radoc.

Manuel V. Pangilinan-led MNTC earlier submitted proposals for the SCTEX deal, following the suspension of its business and operating agreement (BOA) for the toll road.

The government decided in November 2014 to subject the MNTC’s proposal to a “price challenge,” where qualified groups will match MNTC’s offer by giving “the highest upfront cash value.”

On top of the P3.5-billion upfront payment that will be inclusive of value-added tax, the winner will share half of gross toll revenues with BCDA, assume road operation and maintenance costs of the toll road, as well as continue the integration of SCTEX’s and NLEX’s toll collection systems.

“MNTC has already recognized the price challenge as a part of the process and we clarified that only the upfront payment will be the only aspect to match, not the technical parts,” said Ms. Radoc.

The MNTC said in December 2014 that it had already agreed to subject the SCTEX contract to a price challenged. However, it asked the government to remain faithful to the terms of their 2011 agreement.

In a statement, MNTC President Rodrigo E. Franco said: “We’re satisfied with the outcome. The bidders also raised the same concerns, like the legality of the price challenge. We also made our points heart and we’re glad that things are cleared out.”

According to Mr. Radoc, a consultative meeting with potential bidders is set for January 23, ahead of the bid submission deadline of January 30. The implementing agency plans to award the concession to a long-term operator around March.

The 2011 BCDA-MNTC agreement involves an integration plan aimed at “removing toll barriers along the North Luzon Expressway (NLEX) and SCTEX, so that instead of the current five stops motorists from Manila have to make to get to Subic, it will be reduced to just two.”

Mr. Francos said that early in 2014, the proposal was revised to delink it from the BOA.

In a separate statement, Ms. Radoc said the BCDA has approved in November 2014 a broader plan to reconcile the toll collection in Luzon’s major expressways.

“What we’ve approved is a plan to seamlessly integrate toll collection of SCTEX and NLEX, being a component of the SCTEX contract,” she said, adding that they have yet to discuss if the integration will still be part of the responsibilities.