Metro Pacific eyes P5B NLEX expansion

MANILA, Philippines – Infrastructure giant Metro Pacific Investments Corporation (MPIC) has submitted to the Toll Regulatory Board (TRB) its proposed expansion plan of the 86.7-kilometer (km) North Luzon expressway (NLEX).

The investment plan submitted to the TRB in October would is from P4 billion ($89.07 million) to P5 billion ($111.36 million).

“The TRB has already called our attention on service level potential deterioration in the north of NLEX because utilization is already reaching the capacity, ergo the need to expand. We have submitted an investment proposal to the TRB,” Ramoncito Fernandez, president of MPIC’s Metro Pacific Tollways Corporation (MPTC) said.

Fernandez pointed out that the proposed expansion would require the construction of an additional lane, pending TRB approval, for both the North and South bounds of the expressway from the San Fernando exit up to the Dau exit.

In early November 2013, TRB executive director Edmundo Reyes Jr. directed operators of major expressways including NLEX, South Luzon expressway (SLEX), and the Manila-Cavite Toll Expressway (Cavitex) to prepare their expansion programs due to high traffic volume expected by 2018.

“If we don’t do anything, by 2018 certain stretches of NLEX and SLEX will be like EDSA. Cars keep adding every year and we will need additional lanes, also space at the exits, toll plazas and tellers, structures, road widening,” Reyes previously said.

The average daily vehicle entries in NLEX rose 6% to 181,448 for the first 8 months of the year while that of Cavitex increased 8% percent to 109,141.

MPTC owns 71% of Manila North Tollways Corporation (MNTC) that operates NLEX and the 94-km Subic-Clark-Tarlac expressway; 100% of Cavitex Infrastructure Corporation that operates the 14-km Cavitex; 46% of Tollways Management Corporation (TMC); and 29.45% of Thailand’s Don Muang Tollway Public Company Ltd, (DMT) via FPM Infrastructure Holdings Ltd.

Toll rate hike overdue

For the third quarter of 2014, MNTC reported an increase in earnings despite delays in the approval of toll rate adjustment.

MNTC president and chief executive officer Rodrigo Franco said in a report to the Securities and Exchange Commission (SEC) that the earnings of MNTC reached P1.82 billion ($40.55 million) from July to September or about P110 million ($2.45 million) higher compared to the P1.71 billion ($38.06 million) in the same period last year.

Franco noted an increase in the traffic volume this year at NLEX; strong vehicle sales; stable fuel prices; and the rapid development around the NLEX service area.

This pushed up MNTC’s net toll revenues by 4% to P5.47 billion ($121.87 million) from January to September while core income grew 6% percent to P1.84 billion ($40.99 million).

“The company is poised to set new record-high annual traffic volume for the third straight year after ending the lean season within the range of the expected slowdown in traffic growth during the third quarter,” Franco said.

Apart from the lean season in the third quarter, the failure of the TRB to implement a toll rate increase is affecting the company’s bottom line.

Rodrigo said MNTC filed a petition with the TRB on September 30 for the bi-annual toll rate adjustment scheduled on January 1 as provided in its concession agreement.

This despite the fact, that the TRB has failed to act on the petition it filed in 2012 for the toll rate adjustment scheduled in January 2013.

“The current petition would bring the cumulative toll rate adjustment to 15%, of which 12% is long overdue,” Franco said in the report. – Rappler.com

*($1 = P44.89)