San Miguel Corp keen on PPP infrastructure projects - Ang

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) plans to participate in all the projects which the government will offer under its Public-Private Partnership (PPP) program for infrastructure.

The much-touted PPP conference opened yesterday at the Marriott Hotel in Pasay, attracting both global and local business heavyweights.

On the sidelines of the conference, SMC president and CEO Ramon Ang said they are keen on participating in the different projects in the pipeline.

“We will participate in all the projects – power projects, infrastructure projects and tourism,” Ang told reporters.

He said the company’s priority would be in infrastructure and energy.

Ang said the PPP scheme would be a successful arrangement for private investors such as SMC.

“I’m very sure that everyone will participate. We are very interested,” he said.

To further its diversification efforts, Ang said SMC plans to invest in the construction of the 100-kilometer Batangas-Manila (Batman 1) natural gas pipeline project.

Batman 1 is targeted to be built next year in time for the planned construction of several liquefied natural gas (LNG) projects in Luzon. This project will also support the conversion of the idle Sucat power plant into a natural gas facility under the government’s natural gas vehicle program.

Specifically, the pipeline project is envisioned to deliver natural gas from the Malampaya gas project in Palawan to power stations, industrial customers and even the transport sector in Metro Manila.

Several investors have earlier expressed interest to join the bidding for Batman 1. These are PTT of Thailand, Japanese power firm Marubeni Corp. and Russian power firm Gazprom.

San Miguel Energy Corp. (SMEC), the group’s vehicle for its energy ventures, is currently one of the biggest power players in the power industry, having the largest power capacity portfolio of 28.1 percent of the Luzon grid and 21.4 percent of the national grid, according to the Energy Department.

Its power portfolio now includes the 620-megawatt Limay combined-cycle power plant, the 1,000-MW Sual coal-fired power plant, 345-MW San Roque multi-purpose hydro plant and the 1,200-MW Ilijan natural gas power plant.

During the conference, the government presented to investors 10 PPP projects.

These include the Metro Rail Transit (MRT)-Light Rail Transit expansion (P70 billion); MRT Line 2 extension (P11.29 billion); the new Bohol airport (P7.54 billion); Puerto Princesa Airport (P4.36 billion); North Luzon Expressway-South Luzon Expressway link (P21 billion); Cavite-Laguna Expressway-Manila side section (P10.5 billion); and Daraga International Airport (P3.07 billion).

The other projects are the City Terminal for the Diosdado Macapagal International Airport, the privatization of the Laguindingan Airport operation and the supply of treated bulk water for Metro Manila. The costs of the three projects are still being finalized.

At least 500 local and global investors attended the conference.

In his speech during the conference, President Aquino said the government would provide guarantees for investors in the different infrastructure projects.

“What we will be doing in so far as solicited projects are concerned is to minimize your risk in a meaningful and fair manner. The government will provide investors with protection against regulatory risk,” he said.

Aquino said that when the government commits to allow investors to earn their return from user fees, it is important that that commitment be reliable and enforceable.

“If private investors are impeded from collecting contractually agreed fees — by regulators, courts, or the legislature - then our government will use its own resources to ensure that they are kept whole,” he stressed.