NLEX operator sees 8.5% hike in revenues

MANILA, Philippines - A unit of infrastructure giant Metro Pacific Investments Corp. (MPIC) sees its toll road business growing its revenues 8.5 percent this year after failing to meet its target last year due to the absence of the much-delayed toll increase.

Rodrigo Franco, president and chief executive officer of MPIC’s Manila North Tollways Corp. (MNTC), said toll revenues this year is expected to hit P8.1 billion or P600 million higher than the P7.5 billion booked last year.

Franco said this year’s revenue target has factored a six percent traffic increase along the 86.7-kilometer North Luzon expressway (NLEX).

“Target traffic growth is five percent to bring MNTC revenues to P8.1 billion,” he added.

According to him, toll revenues last year was five to six percent higher compared to end-2013 as volume of traffic grew 6.9 percent to over 185,000 vehicles per day from 173,067 vehicles per day in 2013.

However, he pointed out that last year’s toll revenues was P500 million lower than the projected P8 billion revenues due to the failure of the government to approve its petition for toll increase.

The toll road operator is seeking an average 15.2 percent hike in toll for the NLEX starting Jan. 1 this year from the Toll Regulatory Board (TRB) as allowed under the Supplemental Toll Operation Agreement (STOA) signed in April of 1998.

The company argued that Clause 11.4.1 of the STOA and Sec. 9 of Presidential Decree 1894 allows toll rate adjustments every two years.

However, the TRB has yet to act on the petition of MNTC to adjust toll rates last January 2013.

“We are eternal optimists and we hope a rate hike will be implemented this year,” Franco said.

He cited the continued decline in the pump prices of petroleum products would result to higher volume growth as motorists would be encouraged to use their vehicles often.

“The impact of the declining fuel prices will be reflected in the higher traffic. If fuel prices are low people are encouraged to travel,” he said.

Metro Pacific Tollways Corp. president Ramoncito Fernandez earlier said the toll road arms of MPIC lost P2 billion in potential revenues as the TRB has yet to act on the petition for toll increase over the past three years.

Both MNTC, that operates NLEX, and the Cavite Infrastructure Corp. that operates the 13.5-kilometer Manila-Cavite toll expressway (Cavitex) have pending petitions before the TRB.

In total, MNTC and CIC lost P2.26 billion in potential revenues since 2012 due to the failure of TRB to act on their toll hike petitions. Both operators lost P147 million in 2012, P990 million in 2013, and about P1.1 billion last year.