Long-delayed? NLEx-SLEx road link construction to begin in 2013

MANILA, Philippines - The government's plan to free up Metro Manila thoroughfares by building new tollways that will connect the north and south Luzon expressways will happen in 2013 as it has yet to finalize the terms of the projects that were proposed by two rival companies.

Metro Pacific Tollways Development Corp (MPTDC), led by its chairman Manuel V. Pangilinan, and San Miguel Corp-backed Citra Metro Manila Tollways Corp (CMMTC), headed by San Miguel President Ramon Ang, have presented their proposals to President Aquino on Wednesday, May 23, on their respective NLEx-SLEx connector road projects.

The road projects will link Makati City to Caloocan and Balintawak.

"Both of the projects can be given formal awarding, final approval before the end of the year, so that by the end of this year or early next year, they can begin," said Communications Secretary Ricky Carandang in a press briefing in Malacanang.

The projects, worth a combined P45 billion, must be approved by the National Economic and Development Authority-Investment Coordination Committee first before they can be awarded to the proponents.

Linking NLEx and SLEx has been in the pipeline since 2010, when MPTDC submitted an unsolicited proposal for it. It was supposed to be just one project until CMMTC submitted its own proposal, claiming it has the right to develop the project as an extension of its Skyway. The two proposals covered different routes for the proposed link.

TWO ROADS. Metro Pacific and San Miguel-Citra propose to build separate roads connecting NLEx and SLEx. MPIC's proposal is the pink line, while San Miguel-Citra's is the shorter, dark blue line. Illustration from the SMC-Citra group

TWO ROADS. Metro Pacific and San Miguel-Citra propose to build separate roads connecting NLEx and SLEx. MPIC's proposal is the pink line, while San Miguel-Citra's is the shorter, dark blue line.

Illustration from the SMC-Citra group

This sparked a debate on which of the two should be approved by the government, which later on decided they can co-exist.

In the Malacanang briefing, Transportation Secretary Manuel "Mar" Roxas said the projects will be "undertaken independently and simultaneously."

However, unlike CMMTC's, which will be "undertaken as a continuation of its existing franchise (for Skyway)," MPTDC's proposal will be subjected to a Swiss challenge.

President Aquino said: "The Swiss challenge is mandated being an unsolicited proposal. That's a necessary process."

Long-delayed

The plan to link NLEx and SLEx has been delayed several times.

MPTDC had proposed as early as 2010 to build a 13.4-kilometer, 4-lane elevated road connecting the two over the railway from Makati to Caloocan.

It said the road was important for a number of factors:

 
The Department of Public Works and Highways (DPWH) had accepted MPTDC's proposal that same year. But the project was hit by delays when: first, the government included the project as one of those that will be bid out under its public-private partnership program (PPP), then San Miguel-CMMTC submitted what was initially perceived as a competing proposal.

MPTDC is an affiliate of Manila North Tollways Corp (MNTC), which operates the 83.7-kilometer NLEx. MPTDC and MNTC are owned by Metro Pacific Investments Corp (MPIC), a unit of Hong Kong-based First Pacific Co. Ltd. The companies are headed by Pangilinan.

MPIC owns a small indirect stake of 2% in CMMTC.

BUSINESS RIVALS. San Miguel president Ramon Ang and Metro Pacific Investments Chair Manuel Pangilinan exchange views on the NLEx-SLEx connector roads they proposed to the government in a presentation at Malacanang. Photo taken by Malacanang Photo Bureau

BUSINESS RIVALS. San Miguel president Ramon Ang and Metro Pacific Investments Chair Manuel Pangilinan exchange views on the NLEx-SLEx connector roads they proposed to the government in a presentation at Malacanang.

Photo taken by Malacanang Photo Bureau

San Miguel's entry

MPIC rival San Miguel entered the picture when it bought a 46% stake in Atlantic Aurum Inc., the majority shareholder of CMMTC, which operates the Skyway projects from Alabang, Muntinlupa to Buendia, Makati.

San Miguel and the Citra Group also acquired a controlling stake in South Luzon Tollway Corp, which holds the concession to operate the 35.9-kilometer SLEx from Sto. Tomas, Batangas to Alabang. 

Shortly after the deals, San Miguel-backed CMMTC proposed a 14-kilometer, 6-lane NLEx-SLEx connector from Makati to Balintawak. But unlike MPTDC's proposal, CMMTC's road will have exits to 6 major areas in Metro Manila.

This prompted a discussion on which proposal must be accepted by the government. The DPWH however decided to push through with both projects, saying they are different and will be servicing "different corridors."

Prior to San Miguel's entry in CMMTC, MPIC was in talks with the Skyway operator to increase its stake. No deal materialized.

PPP over unsolicited deals

The NLEx-SLEx connector road was one of the PPP projects the government was eyeing to bid out when it first announced the infrastructure building program in 2010.

The PPP was adopted by the Aquino government as part of its good governance campaign to do away with unsolicited proposals from private investors that are highly susceptible to corruption.

Ironically, the NLEx-SLEx connector road came about because of an unsolicited proposal.

Roxas said to maintain transparency in the project, since it was a good one, the government will open it for a Swiss challenge where offers of other interested groups will be entertained. If uncontested, the project will be awarded to the original proponent.

"I therefore urge those who want to compete in the Swiss challenge to start preparing because MPTDC has already done all the work, the detailed engineering, the financing and the environmental side," he said.

MPIC - San Miguel rivalry

Aside from the NLEx-SLEx connector road, San Miguel and MPIC groups have chased after the same businesses -- both have interests in power distribution and generation, telecommunications and toll roads.

They were in a battle for control of then Lopez-owned Manila Electric Co. and bid out for the Sublic-Clark-Tarlac Expressway (SCTEx), which MPIC later bagged.

Prior to these, they went head to head to acquire another Lopez asset, NLEx-operator MPTC. MPIC again sealed the toll business deal.

In telecommunications, San Miguel's entry, through Liberty Telecommunications Holdings Inc., was seen to give competition to MPIC affiliate Philippine Long Distance Telephone Co, the country's largest telecommunications firm. - Rappler.com

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