BCDA, MNTC set to sign contract for SCTEX management

MALOLOS CITY , Philippines  – The Bases Conversion Development Authority (BCDA) is set to sign a lease/concession agreement with the Manila North Tollways Corp. (MNTC) by September for the operation and management of the Subic-Clark-Tarlac Expressway (SCTEX).

“We expect to sign the contract on lease and concession with the MNTC by the end of September,” retired Brig. Gen. Robert Gervacio, spokesman of the SCTEX, said in a media briefing.

If the signing pushes through as scheduled, MNTC will operate and manage about 200 kilometers of toll way beginning from the 89-kilometer North Luzon Expressway (NLEX) in Balintawak, Quezon City to Sta. Ines in Tarlac; and the 94-kilometer SCTEX from Subic Bay Freeport to Tarlac Techno Park in Hacienda Luisita.

A member of the Metro Pacific Group of Companies headed by businessman Manuel V. Pangilinan, MNTC built and currently operates the NLEX to which the SCTEX is now seamlessly connected.

The SCTEX, on the other hand, is a 94-kilometer tollway that interlinks Central Luzon’s three major economic zones – the Clark Freeport Zone, Subic Bay Freeport Zone, and the Central Techno Park in Tarlac.

Built at a cost of P34.106-billion, SCTEX was funded by the Japan International Cooperation Agency (JICA) and the National Government which contributed a subsidy amounting to P3.949 billion.

Bidding for the SCTEX started as early as October last year, but failed by February this year when the BCDA declared MNTC’s financial proposal as “non-complying.”

This was followed by a negotiated bid wherein the MNTC stood as the lone eligible bidder.

Ten days ago, the BCDA awarded the MNTC the right to enter into the contract to lease, manage, operate and maintain the SCTEX.

Under the terms of the contract, BCDA shall lease to MNTC the SCTEX and assign to it the concession to manage, operate and maintain the tollway for a period of 25 years, renewable for another eight years.

BCDA also assigned to MNTC its toll operations rights under the Toll Operation Agreement (TOA) which the BCDA signed with the Toll Regulatory Board (TRB) on June 13, 2007, including the right to collect toll revenues.

In return, MNTC shall pay the BCDA a semi-annual lease/concession fee (SAL-CF) amounting to the peso equivalent of the yen denominated JBIC/JICA debt service requirement for the years 2010 to 2016.

From 2017 to 2043, MNTC will pay, as lease concession fee, 20 percent of the gross revenues from the SCTEX, with the provision that if the lease concession falls shot of the JICA debt service requirement, MNTC will advance the shortfall to BCDA without interest and recover the amount from BCDA’s future 20 percent share kin gross revenues it is exceeds the debt service requirement.

Based on MNTC’s estimates, it will pay a total of P64.4 billion in lease concession fees for the concession period.

This amount is higher than that minimum requirement of P38 billion which the BCDA set under the terms of reference (TOR) for the bidding of the operations and management (O&M) contract for the SCTEX.

According to Gervacio, BCDA and MNTC are now negotiating the details of the draft lease/concession agreement, subject to securing the appropriate approvals of relevant agencies such as the TRB, Office of the Government Corporate Counsel (OGCC), and JICA.