San Miguel mulls P3-billion Tarlac-La Union tollway investment

MANILA, Philippines - Food and beverage giant San Miguel Corp. may invest between P2 billion and P3 billion in a project that will build the 88.5-kilometer, four lane expressway from La Paz, Tarlac to Rosario, La Union.

San Miguel president Ramon S. Ang said the investment is dependent on the outcome of negotiations between the food and beverage giant and DMCI Holdings Inc. of the Consunji family.

“Talks are ongoing between the two parties. But should the deal push through, we might need to shell out P2 billion to P3 billion for the project,” Ang said.

San Miguel is eyeing a majority stake of up to 51 percent in the P15-billion Tarlac-La Union Expressway project.The company is conducting a due diligence study on the possible acquisition.

The build-operate-transfer (BOT) project is being undertaken by a consortium of local private contractors called Private Infra Development Corp. (PIDC), in which DMCI owns 34-percent interest.

Tarlac is a critical crossroad for the project as it completes the Subic-Clark-Tarlac Expressway and North Luzon Expressway loops.

Construction of the Tarlac-La Union expressway began in September and is slated for completion in 2012. Once completed, travel time from Manila to Baguio will be reduced from six to three hours with a safe speed of 80 kilometers per hour.

The project’s first phase is set for completion and operation by 2010 while full tollway operations is expected by 2013.

Aside from DMCI, other members of the consortium include First Balfour, EEI Corp., C.M. Pancho Construction, R.D. Policarpio & Co. Inc., D.M. Wenceslao & Associates, J.V. Angeles Construction, J.E. Manalo & Co. Inc., New Kanlaon Construction Inc. and Rockford Development.

First Balfour has a 34-percent stake in the consortium while the rest hold between two-to-six percent interest.

Meanwhile, Ang said San Miguel may exercise early next year an option to acquire up to 100 percent of SEA Refinery Holdings B.V.’s interest in SEA Refinery Corp. which owns 50.1 percent of giant oil refiner Petron Corp. The option is exercisable within a period of two years from Dec. 24, 2008.

At the same time, Ang said San Miguel is looking at bidding for some government-owned power generating assets.

The Power Sector Assets and Liabilities Management Corp. (PSALM) earlier said it was optimistic about privatizing 100 percent of the National Power Corp.’s generating assets this year which include the Calaca plant and the combined cycle power plant in Limay, Bataan.

The Limay plant is composed of two 310-megawatt modules, having three 70-megawatt gas turbines and a 100-megawatt steam turbine each.