Friday, 6 March 2009

San Miguel Corp, DMCI to meet on Philippine toll road project

Written by Honey Madrilejos-Reyes
Business Mirror

INFRASTRUCTURE may soon be added in the growing list of San Miguel Corp.’s (SMC) investment interests.

The food and beverage giant is meeting with the Consunji-led DMCI Holdings Inc. (DMCI) to explore potential participation in the Tarlac-La Union Expressway Project (TLUTE).

“We are set to meet with the Consunji group next week. As I’ve said before, any opportunity for our company, we will take a look,” said SMC vice chairman and president Ramon S. Ang at the sidelines of Liberty Telecom’s special stockholders’ meeting on Thursday.

SMC has been very aggressive in widening its investment portfolio. It is now into power through investments in the Manila Electric Co., telecommunications via Liberty Telecoms, and oil refining and retail through Petron Corp. It has, likewise, signified interest to enter the water sector via the development of the Laiban Dam.

TLUTE is a P15.2-billion project led by a consortium of local private contractors called the Private Infra Development Corp. (PIDC). DMCI owns a 34-percent economic interest in the consortium.

Also part of the consortium are First Balfour Inc., DM Wenceslao and Associates Inc., CM Pancho Construction Inc., RD Policarpio and Co. Inc., JV Angeles Construction Corp., JE Manalo and Co. Inc., New Kanlaon Construction Inc., EEI Corp. and Rockford Development Corp.

TLUTE, to be undertaken via the build-transfer-operate scheme with the Philippine government, involves the construction in two phases of the 88.5-kilometer, four-lane expressway from La Paz, Tarlac, to Rosario, La Union.

Construction started in September and is targeted for completion in 2012. Once completed, travel time from Manila to Baguio will be reduced from six to three hours with a safe speed of 80 kph.

Following the TLUTE’s completion, the land title will be transferred to the Department of Public Works and Highways (DPWH). A toll operating agreement will then be signed for a 35-year concession that can be extended for another 15 years.

Of the total project cost, 57 percent or P8.59 billion will be financed through loans and 24 percent or P3.68 billion from equity. The remaining 19 percent, amounting to about P2.91 billion, will be provided by the government in the form of subsidy.

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