Integration, finally

What should happen has finally happened. And as the saying goes, better late than never.

The Manila North Tollways Corp.  under the Metro Pacific group is finally set to take undertake the take over the operations and maintenance of the 94-km Subic-Clark-Tarlac (SCTEX) expressway within the month, almost four year after it should originally have.

It will be recalled that MNTC and the Bases Conversion and Development Authority (BCDA) signed the business operation agreement in 2011, which should have been followed by the award of the contract to operate and maintain the toll road.

Under the original BOA, MNTC would operate and manage SCTEX for 33 years. On the other hand, BCDA would be relieved of payment of the P34-billion debt to the Japan International Cooperation Agency (JICA) incurred for the construction of the tollway.

Government kept asking the Metro Pacific group to improve its offer, which the group did repeatedly, but Malacanang remained unsatisfied. The government then decided to subject MNTC’s unsolicited proposal to a “Swiss Challenge,” which means that the MNTC proposal will be subject to a price challenge by any party which the former will have the right to match.

Nobody offered a challenge to MNTC’s offer.

So what’s in it for the public?

For starters, MNTC plans to spend an initial P650 million for the seamless integration of SCTEX and the North Luzon Expressway (NLEX) which the Metro Pacific also owns and operates.

According to news reports, BCDA is speeding up the signing of the agreement with MNTC for the integration of the toll payment of NLEX and SCTEX to meet the Feb. 12 deadline set by Senate President Franklin Drilon, who like this writer, had to endure an 11-hour trip to Baguio from Manila last Dec. 26.

Once integrated, motorists will only have to line up once to get a card at the NLEX tollbooth and then exit at the SCTEX tollbooth in Tarlac City to pay. At present, motorists have to enter and exit NLEX after paying the toll, and then enter and exit SCTEX after paying the toll.

But given the various synergies which Metro Pacific’s tollway business has with its others businesses, we can expect more benefits to be realized with the NLEX-SCTEX integration.

Real estate predictions

Global real estate services provider Colliers International believes that infrastructure projects will play a vital role in the real estate sector this year and that across all real estate sub-markets, the eventual completion of critical infrastructure projects will influence the strategies of real estate stakeholders to achieve higher growth.

In its report entitled Top 10 Predictions for 2015, Colliers said that two of the most highly anticipated infrastructure projects und the Public-Private Partnership (PPP) Program, namely the Cavite-Laguna Expressway and the Laguna Lakeshore Expressway Dike, will encourage future urbanization and development within Mega Manila.

Colliers director of research and advisory services Julius Guevara pointed out that this is a great opportunity for developers to pursue land banking opportunities in strategic locations near the projects.

In addition, the completion of four projects within the Bay Area, particularly the NAIA Skyway, will provide the necessary entry points to the Entertainment City and the Pasay-Paranaque Reclamation Area, Colliers noted.

Research analyst Romero Arahan said that with Solaire and City of Dreams already operational, and ongoing developments in Aseana City, the location has great potential to be a fully integrated business and leisure district in the country.

Arahan noted that manufacturing activities have been expanding in the country, as evidenced by an average 8.3 percent growth for the last three quarters, but warned that port congestion issues must also be addressed to sustain high growth in the manufacturing sector.

The Colliers report pointed out that the eventual completion of the North Luzon Expressway Sectors 9 and 10, which will provide ease of access to the Port of Manila, will benefit the industrial sector.  Ieyo de Guzman who is executive director for investment services said that as resurgence in the industrial sector is experienced, it is now vital to locate areas where industrial activity can flourish and the North of Manila can become a prime location.

Meanwhile, the ongoing challenges in the country’s main airport terminal may affect tourism growth this year. Colliers estimates that 2014 international tourist arrivals reached 4.8 million, a three percent growth from the previous 9.6 percent recorded in 2013.

Colliers managing director David Young said that international brands have already included the Philippines in their expansion plans and therefore, it is critical to address the issues in the airport to fully achieve gains from the tourism boom.

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