Auction set for biggest PPP deal to date

BID SUBMISSION for the country’s most expensive public-private partnership (PPP) deal rolled out so far has been set on July 6, after the government cleared three of four parties that sought to qualify for the auction, a key official of Department of Public Works and Highways (DPWH) said on Sunday.

DPWH PPP Service Director and Officer-in-Charge Ariel C. Angeles said in a telephone interview that the agency’s Pre-qualification Bids and Awards Committee (PBAC) has qualified three of the four groups that submitted pre-qualification documents for the P122.8-billion Laguna Lakeshore Expressway Dike Project (LLEDP) last Feb. 27.

The three qualified groups are:

• Trident Infrastructure and Development Corp., or “Team Trident,” composed of Ayala Land, Inc.; Megaworld Corp.; Aboitiz Equity Ventures, Inc.; and SM Prime Holdings, Inc.;

• San Miguel Holdings Corp.; and

• Alloy Pavi Hanshin LLEDP Consortium, composed of Malaysia’s Alloy MTD Capital BHD; Prime Asset Ventures, Inc.; and South Korea’s Hanshin Engineering Construction Company Ltd.

“Submission of technical and financial bids will be on July 6. Only Team Trident, San Miguel and Alloy-PAVI Hanshin Group can participate in the actual bidding, because it was only the three of them that have been qualified,” Mr. Angeles said.

The Rainbow Consortium — which is composed of Rainbow Holdings, Inc.; Pt Nusa Konstrukti Enjiniring TbK (NKE); the No. 4 Metallurgical Construction Company of China Ltd. (4MCC); Shindong-Ah Construction Company Ltd. (SCC); Korea Expressway Corp. (KEC); Santa Lucia Land, Inc.; Dong Myeong Engineering Consultants and Architecture Company Ltd., and Kunhwa Engineering and Consulting Company Ltd. — failed to make the cut.

“There were too many and major deficiencies in their qualification documents, such as the group wasn’t able to submit the operations and maintenance part, also its English translation is incomplete,” the head of DPWH PPP Service replied when asked why Rainbow Consortium was disqualified.

Should the Rainbow Consortium appeal its disqualification, Mr. Angeles said the group has to pay to DPWH a protest fee amounting to 0.5% of project cost, or about P6.14 billion.

Sought for comment, Sta. Lucia Chief Financial Officer David M. Dela Cruz said in a telephone interview yesterday: “It’s sad that we’re disqualified, but the consortium is led by Rainbow Holdings, so whether the group will appeal or not, we’ll leave that decision to Rainbow.”

The official notice of pre-qualification, according to Mr. Angeles, should be released by March 24.

“The ITPB (instructions to prospective bidders) and draft of concession agreement will be released next week, and then after that, one-on-one meetings with the three qualified groups will be conducted,” Mr. Angeles added yesterday.

The P122.8-billion PPP deal is targeted to be awarded on Aug. 21, the DPWH last month said, adding that signing of concession agreement is set on Sept. 20.

Of 24 groups that bought pre-qualification documents since the project’s rollout in December last year, only four submitted prequalification documents for the 37-year contract to build:

• a 47-kilometer (km) expressway between Taguig City and Los Baños, Laguna and a 45-km flood-control dike for P64.914 billion under a build-transfer-operate arrangement, as well as

• reclaim around 700 hectares of land in Taguig and Muntinlupa cities abutting the road-dike for some P57.897 billion under a build-transfer scheme.

Other parties that bought documents but no longer sought to be qualified for the auction were Mega Express Road and Development Corp.; Metro Pacific Tollways Corp. (MPTC); Muhibbah Engineering Bhd of Malaysia; JV Power and Wealth Corp.; Minerales Industrias Corp.; GT Capital Holdings, Inc.; Leighton Contractors of Australia; Egis Projects SA of France; LT Group, Inc.; the D.M. Wenceslao Group’s Laguna Lakeshore Consortium; Filinvest Land, Inc.; Macquarie Securities (Phil), Inc.; Megawide Construction Corp.; JG Summit Holdings, Inc.; PT Star Line of Indonesia; State Properties Corp.; VINCI Concessions of France; and IL & FS Transportation Networks Ltd. of India.

The Joint Foreign Chambers of the Philippines, in its fourth annual assessment released last March 3 on government progress in addressing key business constraints, noted of the PPP that “[a]fter a slow start, the Aquino administration is making significant progress.” Nine PPP deals have been awarded since the flagship infrastructure program was launched in 2010: P3.15-billion Integrated Transport System-Southwest Terminal project; P34.44-billion Mactan-Cebu International Airport Passenger Terminal Building; P44.65-billion LRT Line 1 Cavite Extension and Operations and Maintenance; P2.24-billion Automatic Fare Collection System; P2.24-billion Daang Hari-South Luzon Expressway Link Road; P23.90-billion Ninoy Aquino International Airport Expressway (Phase II); P16.28-billion first phase of the PPP for School Infrastructure Project (PSIP); PSIP’s P3.86-billion second phase; and P5.62-billion Philippine Orthopedic Center modernization.