Favila urges Malaysian firm to start rehab of South Luzon Expressway

Trade and Industry Secretary Peter B. Favila is urging MTD Capital Berhad of Malaysia to finally start work on the long- delayed rehabilitation of the South Luzon Expressway (SLEX).

According to Favila, MTD faces a possible complication in the SLEX project once the Supplemental Toll Operations Agreement (STOA) covering the expressway lapses in June.

Without the STOA, Favila warned, MTD could technically lose its right to operate the SLEX. The STOA was signed in February this year, supposedly paving the way for the start of the long-delayed rehabilitation of the SLEX Alabang viaduct or toll road 1 (TR-1) and its extension from Calamba to Sto. Tomas Batangas.

The signatories to the STOA were the Toll Regulatory Board (TRB) as the grantor, the Philippine National Construction Corp. (PNCC) and the South Luzon Tollways Corp. (SLTC) as the investors and the Manila Toll Expressway Systems, Inc. (MTESI) as the operator.

Unfortunately, MTD, Favila said, had run into some problems over the design of the viaduct which the contractors would not agree to.

The continued problem faces the complication of the effectivity of STOA lapsing which would force MTD to renegotiate a new STOA, thus further delaying the SLEX project.

The rehabilitation and extension of the SLEX has repeatedly been delayed due to financing problems.

Estimates for the cost of the SLEX rehab and extension is now placed at P11 billion.

The SLEX rehab and extension also encountered some problems with regard to the previous partner Hopewell Crown Infrastructure Inc. (HCII).

HCII has since divested its interest in the SLEX project to MTD Capital Berhad of Malaysia.

MTD is now the joint venture partner of PNCC in SLTC and the MTESI.

The National Government had allocated funding for the SLEX rehabilitation and extension as the project is part of the government’s Medium-Term Philippine Investment Plan.

The government agency tapped to provide financing for the SLEX project is the National Development Co. (NDC).

PNCC holds the franchise for SLEX.

PNCC entered into a joint venture agreement with HCII in 1999 for the construction of the expressway from Alabang all the way to Lucena City initially valued at $480 million.

Unfortunately, HCII failed to come up with the necessary funding for the project, thus putting the rehab into limbo for a couple of years.

During the term of Trade and Industry Secretary Cesar V. Purisima, it was decided to go ahead with the SLEX rehab even without the participation of HCII, with the NDC initially funding the project and eventually getting foreign investors to takeover the highway project.

The initial phase of the rehabilitation would involve the repair of the Alabang viaduct.

The second phase would involve the widening of the current two-lane highway to four lanes from Muntinlupa to Calamba.

The third phase would be the extension from Calamba to Sto. Tomas, Batangas.