Tuesday, 7 April 2009

Philippine project: Metro Pac close to acquiring Skyway firm

Daxim Lucas
Philippine Daily Inquirer
http://business.inquirer.net/money/topstories/view/20090406-198232/Metro-Pac-close-to-acquiring-Skyway-firm

MANILA, Philippines--The local infrastructure unit of Hong Kong-based First Pacific Co. Ltd. may soon acquire a majority stake in the company that operates the Skyway elevated toll road in southern Metro Manila.

According to Metro Pacific Tollways Corp. (MPTC) president and CEO Ramoncito Fernandez, the group is in discussion with Citra Metro Manila Tollways Corp. (CMMTC) for possible equity infusion by the Manuel Pangilinan-led group into the latter.

He said discussions with the Indonesian-led firm shifted to high gear with the start of construction of the so-called “Skyway 2” project, which involved the extension of an existing 10-kilometer stretch from Makati City to Bicutan by another seven kilometers to Alabang.

Speaking to reporters, Fernandez said an estimated $192 million would be needed for the second phase of the Skyway project—an amount the Metro Pacific group would help fund should it successfully gain an additional stake in CMMTC.

Currently, Metro Pacific’s stake in CMMTC amounts to 10 percent.

Separately, Pangilinan, who chairs Metro Pacific Investments Corp. (MPIC), parent firm of MPTC, said talks with CMMTC were at an advanced stage and that a deal may be forthcoming.

“It is almost done,” he told reporters, adding that his firm was interested in gaining a majority stake in the Skyway operator.

He said Metro Pacific would help the firm raise funds for the expansion of the Skyway, the development of which was cut short by the effects of the 1997 East Asian financial crisis and the downfall of Indonesian strongman Suharto, whose daughter owned the firm that built the roadway.

Apart from constructing the elevated roadway, Pangilinan said funds would also be devoted to rehabilitating the toll plazas of the Skyway, to give them a uniform design with those of the North Luzon Expressway, which the group also owns and operates.

Funds will also be allocated for the continuing rehabilitation of the existing at-grade section of the Skyway from Magallanes to Alabang.

The entry of the Metro Pacific group into the company will dilute the stake of its Indonesian owners to a minority stake, company officials said.

Officials also said this project would generate an estimated 30,000 jobs over its two-year life span.

For its part, the government is expected to contribute about P200 million, which will come in the form of right-of-way acquisitions in and around the project site.

Skyway 2 is the fourth component of Metro Pacific’s P38.1–billion road construction package designed to decongest major roadways in and around Metro Manila.

Other projects in the pipeline consist of Segment 8.1 from Mindanao Ave. to Valenzuela City; Segments 9 and 10, covering a distance of 8 kilometers from NLEx to MacArthur Highway in Valenzuela and Port Area in Manila; and the NLEx-SLEx Connector Road Expressway from C3 in Caloocan City to Buendia Avenue in Makati.

CMMTC is the joint venture corporation of Indonesia’s P. T. Citra Lamtoro Gung Persada (CLGP) and the Philippine National Construction Corp. (PNCC).

CMMTC’s owners are CLGP, Citra Marga Nusaphala Persada, Bhaskara Dunlajaya, and Matra Sarana Aristama; Avenue Asia Special Situations Funds III; and local firms Strategic Development Corporation, Metro Strategic Infrastructure Holdings, Inc., as well as the PNCC.

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