MPIC eyes higher stake in Thai toll road operator

MANILA, Philippines - Infrastructure giant Metro Pacific Investments Corp. (MPIC) is set to start negotiations to increase its stake in a toll road operator in Thailand to about 50 percent in the first half of the year.

Metro Pacific Tollways Corp. president and chief executive officer Ramoncito Fernandez said FPM Infrastructure Holdings Ltd. is set to start negotiations to increase its 29.45-percent interest in Don Muang Tollway Public Co. Ltd. (DMT) to about 50 percent.

“Hopefully (we can start negotiations) by the first half of next year,” Fernandez said.

He pointed out that the company is just waiting for the new government in Thailand to settle down before they start negotiations.

In November last year, First Pacific Co. Ltd. of Hong Kong and MPIC invested P5.8 billion to acquire a 29.45-percent stake in DMT. FPM Infrastructure Holdings is 75 percent owned by First Pacific and 25 percent owned by MPIC.

First Pacific spent P4.4 billion for a 26.2 percent stake in the tollroad operator while MPIC invested P1.4 billion for a 3.25- percent interest in DMT.

The vendor of the toll road stake is a 50-50 joint venture between Bank of Tokyo-Mitsubishi UFJ and South East Asian Strategic Assets Fund. Other major shareholders of DMT include the Phanichewa Group with 37.1 percent and Thailand’s Ministry of Finance with 25.1 percent.

However, MPIC decided to acquire First Pacific’s 75-percent stake in FPM Infrastructure Holdings for a total consideration of $101.25 million last June.

Aside from the Thai government’s stake in DMT, Fernandez said the company is also interested in acquiring the stake of the Phanichewa Group.

According to him, prospects for the toll road operator appear bright with the planned expansion of the existing toll road as well as the construction of a new budget terminal.

 “It has a very good potential,” he added.

DMT operates a 21.9-kilometer six-lane elevated toll road stretching from Din Daeng in central Bangkok past Don Muang Airport and on to the National Monument in the north of the capital under a 27-year concession ending in 2034.

Traffic on the toll road has risen 10 percent this year since budget airlines began relocating to the airport in October 2012. Traffic averaged 77,000 vehicles per day on the original toll road in the first nine months of last year. 

Further growth is seen as a result of population and economic growth in Bangkok and the full reopening of Don Muang Airport’s Terminal 2 in 2016.

First Pacific and MPIC are also looking at participating in the first public private partnership (PPP) project in Vietnam involving a $750 million Dau Giay-Phan Thiet motorway being undertaken by the Vietnamese government and the World Bank as well as private partner Bitexco Group.

The 100-kilometer four-lane Dau Giay-Phan Thiet motorway connecting the key southern cities of Ho Chi Minh City and Phan Thiet is a critical link in the national north-south transport route. 

However, the project has been put on hold indefinitely due to ownership disputes.