HONG KONG—Over “money points,” the government has informed the Metro Pacific group that it was revoking its contract for a 25-year operations and management concession to operate the 94-kilometer Subic-Clark-Tarlac Expressway (SCTEx).
Metro Pacific Investments Corp. (MPIC) chairman Manuel V. Pangilinan, revealing this, said while his group does not want to sue the government, obviously for breach of contract, it also could not walk away from enforcing that contract.
According to Pangilinan, just before the entire management of the Bases Conversion and Development Authority retired to give way to the new management, the state firm wrote MPIC, saying, “We would like to terminate the contract because we would like you to concede on the following points.” The reasons BCDA cited for wanting to revoke the contract concerned “money points,” Pangilinan said but refused to elaborate.
“We can understand if these are new points but these are points that we already discussed, negotiated and agreed on. We can’t guess their motivation. If they are favoring another, then why don’t they tell us? If we are not welcome, then, fine, just tell us,” said Pangilinan.
As the SCTEx concessionaire, the Metro North Tollways Corp. (MNTC) is responsible for, among other things, the overall management and supervision of the tollway; management of the toll operations center, toll plazas, and all other related ancillary facilities and equipment.
MNTC is a subsidiary of listed firm Metro Pacific Tollways Corp., which, in turn, is the infrastructure arm of MPIC.
“You don’t want to sue the government because the contract is a perfected contract, one that has been approved by the TRB [Toll Regulatory Board] and by the Office of Government Counsel, and we have received certificates saying that the negotiations between MNTC and the BCDA have concluded already,” Pangilinan said.
“On the other hand, if we decide to walk away from the contract, we will be asked why and we would then have to tell the truth that these guys are reneging on the contract. I don’t think the country will look good; nor will its Public-Private Partnership Program. Contracts are sacred, especially if the fulcrum of your economic program is the PPP. We don’t want to sue the government but we also have to honor the perfected contracts. That’s our dilemma,” he added.
For now, Pangilinan’s group is in discussions with the new BCDA management rather than bringing the matter directly to Malacañang, “We are leaving it up to the BCDA; it is the appropriate agency. We have to give a chance to the new management to understand what the old management did,” Pangilinan said.
Under the agreement, MNTC will operate and manage about 200 km of tollway that starts from the 89-km North Luzon Expressway (Nlex) in Balintawak, Quezon City, to Santa Ines in Tarlac; and the 94-km SCTEx from Subic Bay Freeport to Tarlac Techno Park in Hacienda Luisita. MNTC built and currently operates the Nlex to which the SCTEx is now seamlessly connected.
Built at the cost of P34.106 billion, the SCTEx was funded by the Japan International Cooperation Agency (Jica) and the government, which contributed a subsidy amounting to P3.949 billion.
The contract states that the BCDA shall assign to MNTC its toll operations rights under the Toll Operation Agreement, which the BCDA signed with the TRB on June 13, 2007, including the right to collect toll revenues.
In return the MNTC shall pay the BCDA a semiannual lease/concession fee amounting to the peso equivalent of the yen-denominated debt-service requirement for the years 2010 to 2016.
From 2017 to 2043, MNTC will pay, as lease concession fee, 20 percent of the gross revenues from the SCTEx, with the provision that if the lease concession fee falls short of the Jica debt-service requirement, MNTC will advance the shortfall to the BCDA without interest and recover the amount from the BCDA’s future 20-percent share in gross revenues if it exceeds the debt-service requirement.
Based on MNTC’s estimates, it will pay a total of P64.4 billion in lease concession fees for the concession period.
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