Tuesday, 15 June 2010

Metro Pacific eyes Star Tollways, still keen on PNCC stake in Slex

Written by Miguel R. Camus
Business Mirror

THE toll road unit of infrastructure firm Metro Pacific Investments Corp. is training its massive financial resources to Southern Luzon after securing last week the multibillion-peso contract to operate and maintain Subic-Clark-Tarlac Expressway (Sctex), which links the three major economic zones north of Metro Manila.

Metro Pacific Tollways Corp. (MPTC) president Ramoncito Fernandez said the company is “hoping” to acquire the 42-kilometer (km) Southern Tagalog Arterial Road (STAR), which connects Santo Tomas, Batangas to Batangas City.

He added that MPTC, which also controls the concession to operate the 84-km. North Luzon Expressway (Nlex), remains keen on the Philippine National Construction Corp.’s (PNCC) stake in the 37-km. South Luzon Expressway (Slex).

Just as MPTC is creating a seamless toll road network north of the capital through Sctex and Nlex, the firm is replicating this model in the south. Slex inaugurates today an 8-km extension ending in Santo Tomas, Batangas which will serve as its link to Star.

Slex and Nlex will then be connected via a new P17-billion 13-km. elevated road cutting through Metro Manila to be built by MPTC. The government formally accepted the company’s unsolicited proposal on June 6.

“We are looking for [new] opportunities. In the southern portion [of Luzon],” Fernandez said last week.

The company executive clarified that discussions with Star Tollway Corp., operator of Star, have yet to commence.

Star Tollway president and chief executive officer Mark Dumol told the BusinessMirror: “There has been interest from Metro Pacific and from other parties. There has been no offer so far.”

Diversified conglomerate San Miguel Corp. (SMC), which was a one-time partner of Star Tollway in its unsuccessful bid for the Sctex contract, has also “informally” expressed its interest in Star, Dumol said.

SMC officials could not be reached for comment.

The management of Star is projecting at least double-digit traffic growth in the coming years from the current 26,000 vehicles per day due to its new connection to Slex and the booming Batangas economy.

“We expect above average traffic growth for the next five to 10 years mainly from the impact from Batangas port. We are already growing 10 percent year on year and, we expect another 10-percent spread over [several years] because of the impact of [traffic from Slex],” he said.

Fernandez said MPTC also plans to bid for the Slex stake of government-held Philippine National Construction Corp., which involves 20 percent in Malaysian-backed South Luzon Tollways Corp., which rehabilitated the toll road, and 40 percent of its operations and maintenance firm Manila Toll Expressway Systems Inc.

“We will wait for the new administration [to bid it out]. We made an unsolicited bid [previously],” Fernandez said.

An individual privy to the deal said MPTC offered P2.6 billion for the government’s stake in Slex.

With new projects and potential acquisitions in the pipeline, Fernandez said the company expects to decide on its financing requirements, which he estimated at between $200 million to $300 million, before the end of 2010.

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