MANILA, Philippines - Metro Pacific Tollways Corp. (MPTC) may be charged a “right-to-use” fee for utilizing government-acquired rights-of-way for its road project that will connect North Luzon Expressway (NLEX) to South Luzon Expressway (SLEX).
MPTC chairman Manuel V. Pangilinan told The STAR that the Department of Justice (DOJ) has reversed its earlier ruling that government’s acquisition of rights-of-way for the multi-billion peso connector road project is in the form of a subsidy to the private sector.
Pangilinan said according to the DOJ, MPTC will have to pay for the right to use the rights-of-way.
“We don’t have any problem with that so long as they will allow us to recover these additional costs from the toll fees,” he said, as he sought “flexibility” in the determination of tariff rates for the connector road project.
In an interview with The STAR yesterday, MPTC president Ramoncito Fernandez explained that according to the DOJ, ownership of the connector road and improvements will not only be returned to government after the concession period, but MPTC will have to pay “right-to-use” fee or lease to use the rights-of-way acquired by government for the project.
The DOJ, in an earlier legal opinion, said government’s assumption of the costs for securing the right-of-way for the connector road project is a form of subsidy to the private sector which should not be allowed.
Pangilinan said the right-of-way cost for the connector road project from McArthur Highway in Valenzuela in the north to Buendia Avenue in Makati in the south runs to about P7 billion.
But the Department of Public Works and Highways (DPWH), which accepted MPTC’s unsolicited proposal to undertake the connector road project linking NLEX to SLEX, asked the DOJ to reconsider its ruling.
Pangilinan said if MPTC will absorb the cost for securing the right-of-way, that would mean an increase in the project cost for Segments 9, 10 and 11 from P27 billion to P34 billion (of which P17 billion is for the connector road and P7 billion for the right-of-way).
The connector road is a 13.5-kilometer project that was granted original proponent status by the DPWH based on MPTC’s unsolicited bid. It will connect NLEX to SLEX via an elevated road over the tracks of the Philippine National Railways (PNR).
MPTC expects the Swiss auction for the connector road to be launched in the second half of the year.
Fernandez said the right-to-use fee will not apply to the existing PNR right of way, but rather to the additional ones that will have to be acquired by government such as those for the ramps.
“We will have to negotiate with DPWH on the amount of this right-to-use fees but it will definitely not be equivalent to the value of the expropriated property since we will in effect just lease them,” he said.
Fernandez said that the right-to-use concept may apply only to the connector road project since it is an unsolicited proposal.
In an earlier interview, Pangilinan noted that the original DOJ opinion “puts a chill” on railway, tollway, bridges, and even airport projects.
Pangilinan noted that MPTC’s assumption when it submitted the proposal to the DPWH to undertake the connector road project is that the government is the one who secures the right-of-way as its “equity” in the project since the private sector does not have expropriation rights.
“The project cost we offered to absorb is P27 billion which is bulk of the cost and therefore not a bad share,” Pangilinan said.
He emphasized that they just need clearer ground rules. “If the thrust of the DOJ ruling is that government cannor subsidize the right-of-way costs and that it is the private sector who should pay for it, then government should allow us to have more flexibility in the tariffs and to input that in the tariff calculation,” Pangilinan added.