MPIC tollways unit eyes more projects abroad

MANILA, Philippines — The tollways arm of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) plans to continue expanding its presence abroad in hopes of ramping up revenue contribution of its international operations to a quarter over the medium term.

Metro Pacific Tollways Corp. (MPTC) president and chief executive officer Rodrigo Franco said the group continues to explore potential new projects in markets abroad where the company is currently present, as well as those in which it has yet to establish one, as part of its pan-ASEAN strategy.  

“Right now we are looking at opportunities in-country in terms of investment outside the country. We think there’s still a lot of investments outside the country,” Franco said. 

“We think there’s still a lot of opportunities in Indonesia. A lot of opportunities in Vietnam so we’re looking at opportunities there,” he said. 

In Indonesia, Franco said there are several projects that are either in the pipeline or concessions awarded in the past that have not been constructed which the company is taking a look into. 

“Apart from that, they have these unsolicited proposal scheme that allows developers to think of their projects that they can develop. Indonesia is never lacking in opportunities. Like the Philippines, there is a lot of catching up needed in terms of road infrastructure,” he said.

MPTC, through Indonesian subsidiary PT Metro Pacific Tollways Indonesia, holds a controlling stake of 53.26 percent in Indonesian infrastructure company PT Nusantara Infrastructure Tbk.

For Vietnam, Franco said projects attractive to the group are new expressways to be built and potential expressways that may be privatized. 

“Our affiliate there is already undertaking several projects. These are smaller projects from what we see here and in Indonesia. But then these north-south highways, it could be bidded out as expressways. At some point they may consider privatizing those expressways. Those would also be something to plan for, if and when they decide to privatize those expressways,” he said. 

 “But our focus is really on the south because our partner is based in Ho Chi Minh and there are a lot of opportunities there because it’s a growth area. So we continue to explore those opportunities,” Franco added.

MPTC holds a 45 percent minority equity interest in CII Bridges and Roads Investment Joint Stock Co., a Ho Chi Minh City-based infrastructure developer.

In Thailand, where the group holds a 29.45-percent stake in Don Muang Tollway Public Co. Ltd., Franco said projects being offered under the public-private partnership (PPP) model are being explored. 

“There are new projects that we understand are being developed for PPP bidding, but nothing concrete has come out. There’s preliminary information, but it has not matured yet to an actual request for proposal,” he said.

As far as Malaysia is concerned, Franco said MPTC continues to scout for possible opportunities that could mark its entry into the country. 

“Malaysia we continue to look at, but government has yet make up its mind because of the change in the new government. They’re revisiting the toll road policy. So as of now, it is not yet very clear. No clear signal from the government, although they haven’t stopped those ongoing already,” he said.

According to Franco, MPTC continues to pursue its so-called Pan-ASEAN strategy, but is cautious in undertaking it. 

“We want to be very disciplined in the way we pursue that strategy. We don’t want to be investing just for the sake of investing and having presence in particular countries,” he said.

Franco hopes to see the revenue share of MPTC’s international operations expand to at least 25 percent over the next three to five years from its current share of more than 10 percent.

Achieving the 25 percent level, however, would involve new investments materializing as well as growing existing investments.

“Maybe we can grow it in three to five years primarily because, like the Philippines, of the time it takes to complete a project. If you look at here, the project cycle including government approval takes five years. So practically same problems. Even a Vietnam we still have to deal with right of way issues. It’s the same level of frustration,” Franco said. 

“That’s why when we went outside, we gained a different perspective because the problems that we have here are the same. What we face here are the same with the problems that we face there. That is why it convinced us that we could be successful there as well. If we are able to manage it here, we could also do it overseas,” he said.

In the country, MPTC’s portfolio of projects include the NLEX, SCTEX, CAVITEX, and ongoing construction projects such as that Cavite-Laguna-Expressway, C5-South Link, Connector Road, and the Cebu-Cordova Link Expressway in Cebu.

The company is ramping up its capital spending this year to P45 billion, five times more than 2018’s P9 billion capex.

Last year, MPTC was able to complete more than 20 projects in both NLEX and SCTEX which were aimed at decongesting traffic and enhancing services to motorists.