SLEX foreign investor will be paid, says Aquino

ABS-CBN News

Posted at Aug 18 2010 05:27 PM | Updated as of Aug 19 2010 02:25 AM

 

MANILA, Philippines - President Benigno Aquino III said the government will ask Congress to appropriate a fund to pay the government's obligations to the Malaysian partner of the South Luzon Tollways Corp. (SLTC), the operator of the South Luzon Expressway (SLEX).

Aquino said this proposal will lessen the load that will be passed on to motorists utilizing the SLEX.

"We will ask Congress to use the proceeds from the PNCC (Philippine National Construction Co.) portion to pay for obligations to the Malaysian investor," Aquino said on Wednesday in a press conference in Malacanang.

PNCC and MTD Capital Berhad are the SLTC partners in SLEX. The toll road's operations should have been taken over by the Malaysian firm, which won the concession contract for the road in 2006.

However, MTD Capital Berhad which owns 80% of SLTC, was not prepared at the time, forcing the government to assign the PNCC as interim operator.

PNCC held a 25-year franchise but Congress failed to renew it because it was not prioritized by the legislature. 

Previously, the Department of Finance said that with an expired franchise, PNCC was acting as an agent of the government and should have been remitting shares in the toll revenues.

The government had wanted to impose a value added tax on toll fees to shore up its cash-strapped coffers, including SLEX, but the Supreme Court issued a temporary restraining order on Tuesday, halting the implementation of increases in toll fees for both the North and South expressways. For SLEX, the court also stopped the the 277% hike in toll rates.

"The PNCC franchise is under question, but the money that went into the partnership and which is due to PNCC is still government money," said Aquino.

Aquino said that the amount due PNCC which is still undertermined, can be used to pay for the government's obligations to the Malaysian investor. He said that previous remittances by PNCC went directly to the national treasury, and it is only Congress that can appropriate it.

Aquino said the government will respect the terms of the PNCC-SLTC contract, adding that attempting to change the rules at this point would be sending the wrong signals to foreign investors.

"We cannot change the rules, parang sinabi mo na rin na huwag na kayong pumunta dito."