NLEX-SLEX connector road faces further delay

Categories: Business Updates

Date Posted: 04 Aug 2014

The government has decided to revert back to the Swiss challenge scheme for the proposed P18-billion toll road connecting the North Luzon and South Luzon expressways originally proposed by infrastructure giant Metro Pacific Investments Corp.

Transportation Secretary Joseph Emilio Abaya said the ball is now in the hands of the Department of Public Works and Highways (DPWH) that is tasked to bid out the road project as the Department of Justice (DOJ) deemed the joint venture between MPIC’s Metro Pacific Tollways Development Corp. (MPTDC) and state-run Philippine National Construction Corp. (PNCC) illegal.

“We received the DOJ opinion, and essentially, the direction is to go back to the unsolicited proposal and Swiss challenge,” Abaya said.

Public Works Secretary Rogelio Singson said the Swiss challenge could take at least three months.

“If it goes back to DPWH, we need to go through a Swiss challenge with a minimum of 90 days for competing proposal,” Singson said in a text message.

The head of the Department of Transportation and Communications (DOTC) said President Aquino wants the NLEX-SLEX connector road constructed.

The Swiss challenge is expected to take anywhere from three months to 10 months from the publication of the Invitation to Bid to the awarding of the project. Under the process, the original proponent of the unsolicited proposal would have the right to match the highest bid.

As early as August 2012, the government was supposed to undertake the Swiss challenge process. However, the DOTC recommended that MPIC’s Metro Pacific Tollways Development Corp. (MPTDC) enter into a joint venture agreement with state-run Philippine National Construction Corp. (PNCC) to expedite the connector road project.

Justice Secretary Leila de Lima has issued an opinion dated July 7 that the National Economic and Development Authority (NEDA) Board chaired by President Aquino erred when it approved the joint venture agreement for the connector road project.

The NEDA Board approved the amendment or extension of existing joint venture between MPTDC and PNCC as well as the supplemental toll operations agreement (STOA) to cover the extension of the franchise of NLEX under Presidential Decree No. 1894.

De Lima said in the 68-page letter sent to Transportation Undersecretary Jose Perpetuo Lotilla that “the NEDA Board approval appears to have been issued beyond its powers, and without factual basis or justification.”

Even if the proposal is to proceed, instead, in accordance with the scheme described in the NEDA Board’s amended approval, De Lima said all government agencies, bodies and officials are constitutionally and statutorily required to ensure that such proposals do not merely offer advantageous terms from a business perspective.

She added that it would be highly unwise, and even contrary to the tenets of good governance, to suddenly convert an unsolicited proposal, which is about to be subjected to Swiss Challenge, into another mode of implementation by entering a joint between the unsolicited proponent and the PNCC.

“Thus, any perception that piggybacking on the franchise of PNCC would, in any way, allow the unsolicited proposal of MPTDC to evade or circumvent the Swiss Challenge requirement or would allow it to obtain the contract without competitive challenge, is erroneous,” she stressed.

MPIC is amenable to subjecting its unsolicited connector road project proposal to a “Swiss Challenge.”

The NLEX SLEX connector project was originally submitted to the DPWH in May 2010 under the Build-Operate-Transfer (BOT) Law.

The project would connect NLEX and SLEX via Segment 9 worth P1.9 billion. Connecting NLEX to MacArthur Highway in Valenzuela would be completed in August and Segment 10, worth P10 billion, starts from the Mindanao Avenue exit of NLEX to North Harbor in August next year.

NLEX would be connected through the common alignment at the Polytechnic University of the Philippines (PUP) in Sta. Mesa to the P26.5 billion Metro Manila Skyway Stage 3 project of diversified conglomerate San Miguel Corp. (SMC).
Written by: Lawrence Agcaoili


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