Failed bidding: No takers for Laguna Lakeshore Expressway Dike
MANILA, Philippines (3rd UPDATE) – The government on Monday, March 28, tried to look for an investor that would build an expressway between Taguig City and Los Baños, Laguna, plus a flood-control dike, but it did not find any takers.
The Department of Public Works and Highways (DPWH) was forced to terminate the auction for the P123-billion ($2.65-billion) Laguna Lakeshore Expressway Dike, after all 3 qualified bidders did not submit offers.
The 3 groups that had been expected to submit their bid documents by 2 pm of Monday were:
- Trident Infrastructure and Development Corporation, or "Team Trident," composed of Ayala Land, Incorporated; Megaworld Corporation; Aboitiz Equity Ventures, Incorporated; and SM Prime Holdings, Incorporated;
- San Miguel Holdings Corporation; and
- Alloy Pavi Hanshin LLEDP Consortium, composed of Malaysia's Alloy MTD Capital BHD; Prime Asset Ventures, Incorporated; and South Korea's Hanshin Engineering Construction Company Limited.
"They did not have any specific issues except for one which still requested for some government document from NEDA [National Economic and Development Authority] and PRA [Philippine Reclamation Authority]. We already had [tackled] all issues and concerns prior to today," DPWH Secretary Rogelio Singson told Rappler.
For Roman Azanza III, spokesperson of Team Trident, his group opted to back out from the bidding as project risks have not been resolved at this point.
"Faced with the decision to bid on the country's largest and most complex PPP to date, Team Trident believes that key risks have not been resolved at this time; consequently, Team Trident made the prudent decision to not submit a bid," he said in a statement.
Azanza said Team Trident "acknowledges the extensive efforts that the DPWH, LLDA, our partners and advisers have put into this landmark project and regrets that no satisfactory solutions could be arrived at in time for today's bid deadline."
Interested bidders previously requested for extra time to prepare their bids, citing the need to resolve some "road connectivity" issues.
But Singson did not grant an extension for the bid submission, as the DPWH planned to award the deal before the May 9 elections, to ensure its continuity. (READ: Postponing 7 PPP deals means delaying public service - PPP chief)
A notice published on the DPWH website showed that the agency pushed through with the bid submission deadline on Monday even if the agreement on the connectivity of C6 and the Laguna Lakeshore Expressway Dike has not been finalized yet.
"Connectivity is crucial. 700 kms – twice bigger than BGC (Bonifacio Global City). It's all about connectivity. You have to have a guaranteed access to other central business districts in order to ensure the economic viability of the project," Azanza said.
"The other one is the fact that this is a very complex deal -- consequently, the technical solutions for this deal were so challenging that the project costs almost doubled from the government's initial estimates," he added.
The Team Trident spokesperson added that the time frame is "very tight to roll out the project."
For San Miguel Holdings' Ramon Ang, the Laguna Lakeshore Expressway Dike project is not feasible.
"The government will have to re-examine its assumptions and re-design a mutually beneficial contractual structure best suited for a deal as large and complex as this one, given its potential to create opportunities that will generate the greatest benefit to a lot of people," Ang said in a statement.
Most complex to date
Although the road dike deal is attractive for most business groups, they also labeled it as the "most complicated" public-private partnership (PPP) project to date. (READ: Why same firms are vying for PH infra projects)
The deal entails a 37-year contract to build a 47-kilometer (km) expressway between Taguig City and Los Baños, Laguna and a 45-km flood-control dike for P64.91 billion ($1.40 billion), as well as reclaim around 700 hectares of land in Taguig and Muntinlupa cities adjacent to the road-dike for some P57.90 billion ($1.25 billion).
The reclaimed land is supposed to be separated from the shoreline by a 100- to 150-meter-wide channel, the PPP Center website said.
The project is seen to provide a "high-standard highway" with a dike that will ease traffic flow and mitigate flooding in western coastal communities along Laguna Lake.
In its notice, the DPWH cited the following benefits of building an expressway and a dike:
- Reduce travel time from Bicutan to Los Baños from 90 to 35 minutes.
- Create 700 hectares of land asset.
- P8.1-billion ($174.64-million) average annual flood damage will be avoided.
- An average of 800,000 people will no longer be affected by flooding.
- Flood-prone structures will be protected.
- Travel speed will increase from 30-45 kilometers per hour (kph) to 80 kph.
Poor to bear the brunt
But for Kelvin Rodolfo, senior research fellow at the Manila Observatory, "people living elsewhere along the lake will suffer, simply because the flood water will have to go somewhere." (READ: The dangerous Laguna Lakeshore Expressway Dike)
Rodolfo added that besides the worsened flooding along the unprotected lakeshore, reclamation would displace poor people from their lands, homes, and livelihood.
"Real estate interests will profit greatly from the reclaimed land," he said.
For Rodolfo, the project's only benefit for the poor would be shortened bus and jeepney travel time.
The Laguna Lakeshore Expressway Dike is the most expensive PPP deal to date under the DPWH. – Rappler.com
$1 = P46.38