MPTC offers P2.5 billion to buy out government share in CAVITEX

MANILA, Philippines — Metro Pacific Tollways Corp. (MPTC) is willing to spend as much as P2.5 billion to acquire the remaining interest of the government in the operations and maintenance of the Manila-Cavite Expressway (CAVITEX).

MPTC is waiting for the Philippine Reclamation Authority (PRA) to act on its offer to take over the residual interest of the government in the operations and maintenance of CAVITEX.

MPTC chief financial officer Christopher Daniel Lizo said the company submitted a P2.5-billion proposal in 2023 in the hope of turning CAVITEX into a normal public-private partnership (PPP) project.

At present, CAVITEX runs on a setup whereby the grantor is the Toll Regulatory Board and the grantee is the PRA. MPTC unit Cavitex Infrastructure Corp. (CIC) serves as the concessionaire, while PRA subsidiary PEA Tollways Corp. (PEATC) acts as the operator.

The joint venture agreement requires CIC to shoulder 90 percent of the development, operations and maintenance expenses of CAVITEX. In turn, CIC receives 90 percent of the revenue, mainly from the toll collection business.

The agreement also mandates the PRA, as the partner, to take on 10 percent of the costs to obtain 10 percent of the revenue.

The revenue sharing scheme will be altered to a 60:40 distribution in favor of the PRA once CIC completes its development commitments in CAVITEX and repays all of its loans for the project.

So far, Lizo said CIC has spent at least P25 billion to develop CAVITEX and owes lenders P7 billion that it spent on the project.

MPTC president and CEO Rogelio Singson believes the Court of Appeals will junk the petition filed by PEATC seeking a writ of mandamus against the CIC. Primarily, Singson said the petition lacks approval from the PRA board and endorsement of the Office of the Government Corporate Counsel, which represents the legal interests of state-run firms like PEATC.

Singson said MPTC will talk to Finance Secretary Ralph Recto about its P2.5 billion offer to buy out the government’s interest in the operations and maintenance of CAVITEX. Singson hopes the normal PPP model is observed in CAVITEX to make CIC as the operator and the government as the regulator.

To recall, PEATC filed a petition before the Court of Appeals praying for the removal of CIC in the CAVITEX equation.

PEATC said CIC’s authority to manage CAVITEX has already expired, warning the government that it is bound to bleed revenue if it allows CIC to continue running the tollway.