Malacañang orders rebid of Cavite-Laguna expressway project

Rappler.com
Ayala’s AC infrastructure Holdings Inc., which won the bid with Aboitiz Land, reiterates its position that it will not take any legal action upon the rebidding of the P35.4-billion PPP project
REBID. Ayala’s AC infrastructure Holdings Inc., which won the bid with Aboitiz Land, reiterates its position that it will not take any legal action upon the rebidding of the P35.4-billion PPP project. Photo from the PPP Center

MANILA, Philippines – The Office of the President has finally decided to rebid the Cavite-Laguna expressway (CALAX) project.

The CALAX P35.4-billion ($788.08 million*) project – a major public-private partnership (PPP) under the Aquino administration – involves the financing, design, construction, operation, and maintenance of a 4-lane, 47-kilometer closed-system toll expressway connecting the South Luzon Expressway (SLEX) and the Cavite Expressway.

Team Orion, the 50-50 joint venture between Ayala’s AC infrastructure Holdings Inc. and Aboitiz Land’s accepted bid is P11.65 billion ($259.23 million).

San Miguel Corporation’s (SMC) Optimal Infrastructure Development Inc. submitted a P20.1-billion ($447.29 million) bid but was disqualified by the Department of Public Works and Highways (DPWH) due to a non-compliant bid security.

San Miguel, owned by Ramon Ang, brought the case to the Office of the President. In a subsequent statement that shocked the Ayala-Aboitiz partnership and triggered negative reactions from fund managers and think-tanks, President Benigno Aquino III said he was open to rebidding the entire project.

Fund managers said rebidding it could derail the momentum of the Aquino administration’s PPP project.

But President Aquino thinks otherwise, saying this was the “only fair option” to all parties.

Optimal’s arguments

Thus in a 14-page decision on November 19 signed by Executive Secretary Paquito Ochoa Jr, the Office of the President directed DPWH to rebid the CALAX project.

“The Office of the President found appropriate basis to the arguments raised by Optimal, thus, granted its appeal. The Office of the President then directed the Special Bids and Awards Committee of the DPWH to conduct a rebidding of the CALAX project,” Presidential Communications Operations Office Secretary Sonny Coloma said in a statement on Monday, November 24.

The rebidding  is contrary to the BOT law or the Republic Act No. 6957. Under the BOT law, a rebidding may only take place when no complying bids have been received, or a concerned agency or local government unit is unable to execute the contract with any of the complying bidders.

But Ayala Corporation Managing Director John Eric Francia said: “I don’t think we’ll stand in the way.”

Both the Aboitiz and Ayala groups, including the San Miguel unit, have yet to receive copy of the Office of the President’s decision to rebid the CALAX project.

Despite Malacañang’s decision on the CALAX project, the Ayala conglomerate said it would still participate in other PPP projects.

Francia said Ayala Corporation would be putting at least $250 million in equity investment for Muntinlupa-Cavite Expressway (MCX), the renamed Daang Hari-South Luzon Expressway road link.

By 2016, Ayala Corporation would have poured in at least $400 million in equity investments for infrastructure, as part of its $1-billion equity investments for PPP projects.

Ang wins

The winner in the CALAX decision is Ang, who owns San Miguel Corporation and is a longtime associate of business tycoon Eduardo “Danding” Cojuangco, the former boss in San Miguel. Cojuangco is an uncle of President Aquino who was estranged for a long time from the Aquino family, though Cojuangco backed Aquino in the 2010 presidential race. (READ: Billionaire Ramon Ang)

During the inaugural drive through of the Tarlac City-Gerona-Paniqui section of the Tarlac-Pangasinan-La Union expressway (TPLEX) in December 2013, Aquino called Ang “idol” after the businessman announced that the expressway project would be completed by 2015 – 3 years ahead of schedule. – With reports from Mick Basa/Rappler.com

 


(*$1 = P44.94)