MPIC unit says sanctity of gov’t contracts vital in attracting investments

MANILA, Philippines - Metro Pacific Tollways Corp., a unit of infrastructure conglomerate Metro Pacific Investments Corp., said certainty,  predictability and sanctity of government contracts are vital to attracting investments and facilitating growth.

At the Euromoney-sponsored Philippine Investment Forum yesterday, MPTC president Ramoncito Fernandez said the government’s flip-flopping sends the wrong signal about doing business in the country.

“Changing the rules midstream sows confusion and sends mixed signals to investors,” Fernandez said.

Fernandez said sanctity of contracts must be upheld. “We hope that the incoming government will honor contracts.”

Fernandez said predictability is also a concern among investors following the government’s decision to subject the Subic-Clark-Tarlac Expressway (SCTEX) to a Swiss challenge, effectively setting aside the Arroyo administration’s award of the project to the Metro Pacific group.

The SCTEX contract had been the subject of negotiations between the Bases Conversion Development Authority and Manila North Tollways Corp. as the government sought to boost its revenue share from the project,which earns more than P1 billion in revenue yearly.

MNTC, a unit of MPIC, revised and improved its offer since 2011.

It first offered to raise the government’s revenue share to P90 billion from the original proposal of P64 billion.  It also offered a longer period within which it would subsidize payment of BCDA’s debt to Japan International Cooperation Agency from 2016 to 2019.

With the Swiss challenge, rival bidders must top MNTC’s upfront cash offer of P3.5 billion, inclusive of the 12 percent value added tax, to bag the contract.