Ayala-Aboitiz tandem submits highest bid for CALAX

By Rosemarie Francisco and Siegfrid Alegado, Reuters

Posted at Jun 13 2014 04:20 PM | Updated as of Jun 14 2014 07:44 AM

MANILA, Philippines (2nd UPDATE) - A group led by Ayala Corp. has submitted the highest bid for the Philippines' biggest toll road tender, though the project may face delays as a disqualified group led by San Miguel Corp. vows to seek redress with the courts.

Ayala and its partner Aboitiz Land Inc., a unit of Aboitiz Equity Ventures Inc., offered to pay the government P11.66 billion for the contract to build and operate the P35.4-billion ($809 million) project, according to documents disclosed by the government on Friday.

That beats two other bidders. The consortium of Metro Pacific Investments Corp., DMCI Holdings Inc. and Leighton Holdings Inc. submitted a bid of P11.33 billion, while Malaysia's MTD Capital Bhd's bid was P922 million.

Optimal Infrastructure Development Inc, a unit of San Miguel, had submitted a bid of P20.11 billion, way above the amount offered by the Ayala-led group. But its bid was thrown out by the government on Wednesday after a committee decided that a discrepancy in the documents submitted by San Miguel violated rules.

San Miguel will resort "to all possible legal remedies available under the rules and/or law", following its disqualification, Raoul Eduardo Romulo, representative of San Miguel unit Optimal said in a letter on Friday to the Public Works department, reiterating the company's previous statement.

San Miguel is likely to file a case with the Supreme Court to question the decision of the bids and awards committee and stop the award of the toll road project to the Ayala group, a company source said.

Under current rules, the committee will no longer accept appeals after it ruled with finality on San Miguel's bid, said Cosette Canilao, head of the government agency overseeing the tender of PPP projects.

"I'm still hoping that San Miguel will not file a legal case," Canilao told Reuters. "There are a lot of PPP projects not only in Public Works, but also in other implementing agencies."

Canilao said the Public Works department wants to award the toll road project to the highest compliant bidder next week.

The project involves a 35-year state contract to finance, design, construct, and operate a 47-kilometer four-lane toll road connecting two expressways south of the capital.

Prior to the toll road tender, San Miguel had won one out of seven PPP projects tendered by the government - the contract to build a $345-million elevated expressway and feeder road connecting the Manila international airport to two expressways in the south and southwest of the capital.

On the other hand, the Ayala group has won two of the seven PPP contracts. These are the first PPP project involving a $47 million 4-kilometer toll road linking areas southwest of the capital to southern provinces, and the $38 million automatic fare collection system for Manila's elevated railways.