Business groups oppose CALAX rebid

By Coco Alcuaz, ANC

Posted at Oct 22 2014 10:29 PM | Updated as of Oct 23 2014 06:53 PM

MANILA - Business groups opposed a rebidding for the Cavite-Laguna expressway (CALAX), which President Benigno Aquino on Wednesday said he was considering amid a dispute over the June bidding.

The dispute stems from San Miguel being disqualified from the bidding due to a typographical error in its bid, which it said was for P20.1 billion. A partnership between the Ayala and Aboitiz groups submitted the top bid of P11.7 billion. San Miguel appealed to Malacanang.

"I am inclined to think that a re-bid will be the proper course of action on this particular issue," Aquino said at a forum of the Foreign Correspondents Association on Wednesday.

Business leaders said that would send a wrong signal.

"The original bid was conducted properly and although it is within any bidder's right to appeal, any intervention by Malacanan politicizes the matter and distracts investor confidence in the PPP [Public-Private Partnership] program of the government," said Greg Navarro, president of the Management Association of the Philippines.

So far, most of the criticism about the PPP program is about bidding delays, though the government says many of these delays are requested by potential bidders. The biggest disputes so far, over the Mactan-Cebu airport and LRT-1 projects resulted in delayed awardings.

"I share the view that there is no legal basis for a CALAX rebid as the original DPWH process was conducted above board, transparently and in full compliance with the BOT law," said Makati Business Club head Ramon del Rosario, who is a director of Ayala Corp. "I also share the concern that a rebid will have a severe negative impact on investor confidence and the PPP Program and the entire bidding process. The government should uphold its own rules."

Peter Wallace, an adviser to foreign investors, said a rebid would raise questions.

"How can they do a new bid now that everyone knows everyone else's pricing?" Wallace said. "Won't this lead to a higher price for the project so we'll have to pay higher tolls for the winner to recover his investment? Will others even want to bid when SMC's bid is so much higher? What precedent does it set for future projects."

Not all business group leaders oppose a possible rebidding, though.

"San Miguel was excluded from the bidding process technically and the government was shortchanged of a very substantial amount. If President Aquino decides to rebid it, I will go with him," said Fred Yao, head of the Philippine Chamber of Commerce and Industry.