MANILA, Philippines - The Manila North Tollways Corp. is threatening to block the Bases Conversion and Development Authority's move to conduct a 'price challenge' for the privatization of the operations and maintenance of the Subic-Clark-Tarlac expressway.
MNTC president Rodrigo Franco said it may take legal action if the BCDA fails to reach a common understanding on the terms of reference based on the business operating agreement (BOA) of the "price challenge" for the SCTEX.
"If the price challenge proceeds without an agreement on the provisions of the terms of reference and without a common understanding that the BOA will be the basis of the contract for the price challenge, the validity of the exercise may be questioned and MNTC will be compelled to exercise its legal options," he said.
MNTC is a unit of Metro Pacific Investments Corp. (MPIC).
Franco noted the price challenge is linked to the BOA, after the bidding for BCDA's selection of a private sector partner for the SCTEX privatization in 2009.
"MNTC maintains that since the price challenge was not contemplated in the BOA, it cannot be undertaken without the consent or involvement of MNTC," he said.
"The terms of the BOA as may be provided in the TOR are fixed for the purpose of the Price Challenge and therefore, should be completely maintained and may not be the subject of any further negotiation," he added.
At the same time, MNTC asked the BCDA to convene to discuss the amendments to the BOA and the terms, conditions, procedure and timetable for the price challenge.
In 2011, the BCDA and MNTC had signed the BOA for the SCTEX, subject to the President's approval.
Under the agreement, MNTC would operate and manage SCTEX for 33 years, while the BCDA would be relieved of paying the P34-billion debt to the Japan International Cooperation Agency (JICA) for the construction of the tollway.
However, Malacañang has ordered the price challenge for the maintenance and operations management of the SCTEX.
Interested parties are expected to submit bids that would top MNTC's upfront cash offer of P3.5 billion in addition to the 50-50 sharing of gross revenues. However, MNTC would have the right to match the highest bid for the project.
San Miguel Corp. and Malaysia's MTD Alloy Group had earlier expressed interest in the project.