Subic road redesign favors Lopez group

THE LOPEZ-CONTROLLED Manila North Tollways Corp. (MNTC) stands to gain from a proposal by the National Economic and Development Authority to interconnect the Subic-Clark-Tarlac-Expressway (SCTE) project with the existing North Luzon Expressway (NLE), according to the head of the Bases Conversion Development Authority (BCDA).

The BCDA is the proponent of the SCTE project. "By forcing us to connect the SCTE with the NLE, the government would be coerced to yield operations to MNTC," BCDA president Rufo Colayco said. "This could put us in a position of granting undue benefits and advantage to the private sector from a major infrastructure project whose investments were shouldered solely by the government," Colayco said.

Socioeconomic Planning Secretary Romulo Neri acknowledged that MNTC would automatically take control of the toll operations of the 94-km SCTE if it was redesigned and linked up with the 84-km NLE based on the terms of MNTC's toll operations deal with Philippine National Construction Corp. (PNCC). The deal runs through 2030.

MNTC spent $371 million (mostly in government-guaranteed foreign loans) to rehabilitate the NLE, which runs from Balintawak, Quezon City, to Sta. Ines, Pampanga. The tollway group is 64.3-percent owned by First Philippine Infrastructure Development Corp. of the Lopez family, 20 percent by PNCC and 15 percent by Egis Projects. In an interview with the Inquirer, Neri said he had already discussed the linkage of the yet to be built SCTE and the NLE with MNTC president Jose de Jesus, who expressed full support for the proposal.

De Jesus said in a statement that connecting the NLE with the SCTE made a lot of sense "because it would mean seamless travel." Formal negotiations for the link-up, however, had yet to start, according to MNTC spokesperson Marlene Ochoa.

Neri suggested linking the NLE and the SCTE in a letter to the BCDA on Aug. 16. He reiterated his call for a redesign and rebidding of the superhighway that would link Clark and Subic, the two former American military bases in Central Luzon.

In his letter to Colayco, Neri said the BCDA should "explore anew the possibility of connecting the project to the existing North Luzon Tollway." Neri said the redesign of the project should be made with "the end view of reducing the total project cost without sacrificing the intended benefits of the project." He explained that a connection would cut the SCTE's length by 5 km to 89 km as originally designed for the project.

While Neri cited cost-savings for the link-up, the assumption by MNTC of the new superhighway's toll operations is likely to have a dire impact on the BCDA's ability to recover the money it spent on building the SCTE.

The BCDA was planning to bid out the toll contract to get the money up-front and defray the cost of construction, which was being financed by a soft loan from the Japan Bank for

International Cooperation.

But in his reply to Neri, Colayco said that reverting to the original design "would not produce any cost reductions" because the revised plan the BCDA was implementing "essentially has the same construction scope and content approved in the 2001 feasibility study."

Colayco explained that the revised alignment, which eliminated the direct connection to the NLE, "provides superior access to the proposed logistical hub in the airport and sub-zones."
"It is this reason which motivated our adopting the revised alignment more than concern over potential conflict with MNTC," Colayco said.

Aside from the link-up with the NLE, Neri proposed that the BCDA overhaul certain sections of the SCTE "to make the alignment more straight from Subic to Clark in order to shorten the roadway length and reduce the earthworks, thereby reducing project costs."
He said a more direct route would cut travel time by 15 minutes.


Bataan mountains

But Colayco argued that Neri's suggestion would make the SCTE cut through the Bataan mountains, specifically Mount Malasimbo (one of the range's tallest peaks), and that this would entail greater earthwork and require the use of very expensive elevated spans to run through deep gorges.

Also, Colayco said that a rerouting through the mountains instead of the foothills would force the SCTE to miss out on the ridership traffic from the Roman-Olongapo-Gapan highways at the Dinalupihan interchange.

Colayco said it would be incorrect to state that there would be no connection between the SCTE and the NLE because there would be a super road interchange to link both.
"But when we studied the project, we came to the conclusion that the original plan did not adequately exploit the potential benefits that Clark would obtain from the expressway," he said.

White elephant

Colayco said the SCTE's revised design provided the "most efficient possible access to the planned logistics hub to be developed in Clark." It would also provide the economic spark to erstwhile white elephant projects such as the "bridge to nowhere" in the Sacobia valley and the idle Centennial Expo.

Neri and Colayco had been at loggerheads over the SCTE project after the National Economic Development Authority (Neda) chief called for a rebidding nearly five months after the BCDA started negotiations with a Japanese contractor (which gave the lowest bid price for the project) to trim its offer further.

Colayco said the BCDA had successfully haggled with the Japanese proponent to slash the project cost from its initial offer of P27 billion to P22 billion. Continuing negotiations could further whittle down the project cost to P20.08 billion, the budget contract for the project approved by Neda.
The project is being funded by soft loans from the Japan Bank for International Cooperation.

Procedural lapses

Neri is insistent on rebidding the SCTE project because of alleged "procedural lapses" on the part of the BCDA, including changing the design and bidding out the project way above the P18.7-billion budget that Neda approved in 2000.
The project was only bid out in late 2003. Colayco said this was the reason for the cost increases and not the major changes claimed by Neri.

On Colayco's warning that a rebidding could rankle the Japanese government and its investors, Neri said he "can't blame them" for feeling bad about this.
"We have to do this the proper way. I don't want another Piatco in our hands," said Neri, referring to the Supreme Court's nullification of the $650-million contract involving the German airport operator Fraport for passenger terminal 3 at the Ninoy Aquino International Airport. Neri also quashed allegations that he was pushing for a rebidding of the SCTE project because another local construction company had been coveting the contract.

Neri has come under fire for allegedly having double standards in approving major infrastructure projects.

In contrast to his stance on the SCTE project, Neda has been relatively lenient in approving the North Rail project, which would be built at nearly P1 billion per kilometer even before the Chinese contractor had submitted a detailed engineering design on the 32.1-km project that would run from Caloocan City to Malolos, Bulacan.

By Gil C. Cabacungan Jr.Inquirer News Service Editor's Note:

Published in the Philippine Daily Inquirer