MPIC losing over P2B potential revenues

MANILA, Philippines – Infrastructure company Metro Pacific Investments Corporation (MPIC) said it is foregoing over P2 billion ($44.47 million)* in potential revenues since the government has not acted yet on its tollway operators’ petitions for a toll rate hike.

Metro Pacific Tollways Corporation (MPTC) president Ramoncito Fernandez told reporters on Tuesday, November 25, that their tollway operators continue to lose potential revenues because over the past 3 years the Toll Regulatory Board (TRB) has not decided on their petition.

Both the Manila North Tollways Corporation (MNTC) that operates the 86.7-kilometer North Luzon expressway (NLEX) and the Cavite Infrastructure Corporation (CIC) that operates the 13.5-kilometer Manila-Cavite toll expressway (CAVITEX) have pending petitions before the TRB.

“It is over P2 billion ($44.48 million) for the 3 years in CAVITEX and two years in NLEX,” Fernandez said.

To date, MNTC and CIC have lost P2.26 billion ($50.26 billion) in potential revenues since 2012.

Both operators lost P147 million ($3.27 million) in 2012; P990 million ($22.01 million) in 2013; and would lose about P1.1 billion ($24.46 million) this year.

MNTC President Rodrigo Franco said the increase is long overdue as the tollway is charging customers lower tolls compared to when it started operating the NLEX in 2005.

Back then, the company charged P42 ($0.93) per entry for the open system and P2.48 ($0.055)/km for the closed system.

Currently, the company is charging motorists P45 ($1) per entry. Excluding the value added tax (VAT), the toll is only P41 ($0.91) per entry for the open system and P2.38 ($0.053)/km for the closed system.

“We hope people are going to understand why we have a petition for toll rate hike. Over the years, we even reduced our toll rates,” Franco said.

Operators and concessionaires of the NLEX, CAVITEX, South Luzon Expressway, and the Southern Tagalog Arterial Road (STAR) want to increase toll rates effective January 2015.

MNTC is asking for an average 15% toll increase for NLEX. CIC petitioned for a 25% hike for CAVITEX.

South Luzon Tollway Corporation-Manila Toll Expressway Systems Inc. petitioned for a 33% increase. STAR Infrastructure Development Corporation, meanwhile, is asking for a 16% toll hike.

Toll rate regime in review

The tollways arms of MPIC are also seeking clarification from the Aquino administration on the current toll rate regime for the country’s major expressways.

Specifically, the company is closely studying the viability of ongoing projects, including the proposed P10-billion ($22.37 million) Segment 10 project.

“We would like to have clarity on the toll rate regime of Segments 9 and 10 so we can continue to defend to our shareholders our continuous investments on both roads,” Fernandez said.

To date, MNTC is in the final stages of Segment 9 construction of the NLEX-Harbor Link project, slated to open by the 1^st quarter of 2015. This segment features a 2.4-km, 4-lane, at-grade expressway stretching from the Smart Connect Interchange to MacArthur Highway in Valenzuela City.

Also, pre-construction activities for the Segment 10 portion of the NLEX-arbor Link project are progressing after the notice to proceed was issued last May 2014. The 5.6-km, 4-lane, elevated expressway will run from the terminal of Segment 9 in Valenzuela City and head south to Circumferential 3 (C3) Road/5th Avenue in Caloocan City, above the alignment of the Philippine National Railways (PNR) tracks. – Rappler.com

*$1 = P44.97