Beijing, China – President Benigno S. Aquino III announced here the government will proceed with the rebidding of the P34.5 billion 43-kilometer Cavite-Laguna Expressway (CALAX) project.
President Aquino explained he was more concerned about the potential revenue lose should the government accept the winning bid than a backlash from angry investors.
“We are obligated to get the best deal for our people,” Aquino said. “So, for us to provide the equal opportunity to all parties to give their best offer, I think rebidding is the only process where we can be fair.”
He also rejected the proposal to just choose a winner.
Team Orion of Ayala Corp. and Aboitiz Equity Ventures, the highest complying bidder for the CALAX project last June, had expressed concern over President Aquino’s decision, saying it will derail the momentum of the government’s public-private partnership (PPP) program.
President Aquino wants a rebid after San Miguel Corporation (SMC) questioned the outcome of the project’s bidding.
The Department of Public Works and Highways (DPWH) disqualified SMC’s Optimal Infrastructure Development Inc. (OIDI) for submitting a defective bid security.
It can be recalled that San Miguel Corporation’s Optimal Infrastructure Development of San Miguel Corporation submitted a bid for P20.1 billion but it was disqualified despite its “substantial compliance” with bidding rules.
San Miguel’s issuing bank, ANZ, had issued a bid security check short by four days of the required 180 days, i.e, to expire on November 29 instead of November 25, 2014. The bank had admitted it was a typographical error and issued a corrected check immediately in time for the opening of the financial bids.
After it was disqualified, SMC opened its bid to the media and disclosed the contents or its bid. The SMC reportedly offered the highest premium bid for the toll road project to the tune of P20.105 billion while the Ayala-Aboitiz tandem made an “official” best offer at P11.7 billion.
“I cannot disregard the P8.4-billion difference because that amount can build roughly 50,000 socialized housing units. Between companies and the people, maybe it’s much easier for me to answer those companies than the public,” the President said.
Public interest is always more powerful than business groups, he pointed.
“They’re giving us a premium,” Aquino said, referring to OIDI’s alleged bid. “Remember, we have a deficit. Finance Secretary Cesar Purisima will be happier if we get a better premium as it will help us lower our budget deficit.”
Earlier, fund managers and think tanks warned that the planned rebidding of Calax could prove disastrous for the government PPP scheme and turn off investors who would believe that the President is favoring SMC.
Several business groups also said there is no basis for the planned rebidding, warning this action will adversely impact investor confidence in the government.
Team Orion also signified they will not participate in the rebidding of the 47-kilometer, four-lane toll expressway.
Earlier, the Philippine Chamber of Commerce and Industry (PCCI) has proposed that government review and reform the bidding process of Public Private Partnership (PPP) projects to remove technical disqualifications that tend to favor one bidder over the other.
The country’s business chamber issued this statement as it also called for a rebidding of the Cavite-Laguna Expressway Project (CALAEX) to maximize economic benefits of the government from the Public-Private Partnership project.
PCCI said this was a minor technicality that should not lead to disqualification and should be government’s own lookout to determine if it was to the country’s best interest to consider a technicality as not material to the financial bid, PCCI said.
PCCI said this technicality would deprive the government of the P8.45 billion difference between the San Miguel bid and the accepted bid of only P11.65 billion.
The San Miguel bid document was returned unopened due to the technicality. Right after the bidding conference, the company opened its bid document before media.
PCCI said that in contrast with the minor technical disqualification, the bidding rules of the CALAEX project had been changed four days before to allow two more competitors to join the bidding.
The chamber also cited changes in procedures in previous examples such as in the Daang Hari-South Luzon Expressway project and the Ninoy Aquino International Expressway project
The chamber proposed that rebidding of the CALAEX project should be under the reformed rules of PPP project bidding.
PCCI also said the CALAX rebidding could start from a floor price of P20.1 billion because the market value of the CALAEX project has already been established by the San Miguel offer, it said.
Government will, thus, increase benefits from the CALAEX project by least P8.45 billion, the PCCI said.
Source: Manila Bulletin
Source: Manila Bulletin
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