SMC proposes $2-B flood control project

SAN MIGUEL Corp. (SMC) plans to submit an unsolicited proposal for a $2-billion Laguna de Bay spillway, which President and Chief Operating Officer Ramon S. Ang says would help ease flooding in Metro Manila during the rainy season.

In a press conference on Monday, Mr. Ang said the diversified conglomerate is preparing an unsolicited proposal for a flood control project with a waste-toenergy component.

“Pag hindi nagawa ’ yun at hindi nalabas ’yung tubig, magkakaroon ng massive flooding every rainy season sa Metro Manila. ’ Yun ang kailangan itulak nating lahat na gawin ng gobyerno (If the water isn’t removed, there would be massive flooding every rainy season in Metro Manila. That’s what we should push for the government to do),” Mr. Ang said.

The project will consist of a spillway that would release water from Laguna de Bay to Manila Bay.

“’ Yung spillway project na 14 meters diameter, mga almost $2 billion ’ yun. Pero ang benefits sa mga kababayan natin grabe, dahil mawawala ang baha at the same time imbis na bayaran ako ng gobyerno, bigyan lang ako ng rights to use the materials. Kasi kukunin ko yung basura. (The spillway project is 14 meters diameter, almost $2 billion. But the benefits of this project would be massive, because we could prevent the flood and at the same time, instead of paying me for the costs of the project, the government could just give me the rights to use the materials because I’ll be getting the waste,” Mr. Ang said.

The diversified conglomerate earlier submitted a P700-billion proposal to develop a new international gateway on a 2,500-hectare property in Bulacan. It also included an expressway to link the airport to the North Luzon Expressway in Marilao, and the SMCbacked Metro Rail Transit Line 7 in San Jose Del Monte, Bulacan.

Once approved by the government, an unsolicited proposal is subject to a Swiss challenge, where third parties can submit competing offers, while the original proponent will be given the right to match them.

The Duterte administration has appeared to be more open to unsolicited proposals, unlike the previous Aquino government which preferred bidding out projects through the public private partnership (PPP) program.

However, Mr. Ang expressed concern over the Duterte government’s proposed hybrid approach for PPP infrastructure projects.

Under the hybrid PPP, the government would select, finance, and build big- ticket infrastructure projects using official development assistance and bilateral loans. It then will auction off the operation and maintenance of the projects to private firms.

“Pag G2G ( government- togovernment), I think it would be longer… For example, Japan, nakakita na ba kayo ng conditions? Or China? Ang mga conditions nun baka matakot kayo ( Have you seen the conditions set by Japan or China? Those conditions might scare you). Sila ’ yung sa concept, design, build, construct, finance, commissioning, lahat na,” Mr. Ang said.

The San Miguel chief also pointed out the massive loans incurred by the government will “destroy the balance sheet of the country.”

“Ano babalik tayo sa gobyerno na tambak ang utang (Will we return to a government with a mountain of debt)?” Mr. Ang asked. “Pinakamagaling is, ipabidding mo. Kung unsolicited proposal, Swiss Challenge (The best way is to bid it out. If it’s an unsolicited proposal, then undergo Swiss Challenge). Just give everybody enough time,” he added.

This year, SMC will be allotting $34 billion for three projects, which include an oil refinery, integrated steel mill and an oceantide power plant. SMC targets to complete these projects within three to five years.

The conglomerate reported 2% rise in net income to P13.83 billion in the first quarter of 2017, boosted by its food, beverage, oil, and infrastructure businesses. Revenues gained 23% to P195.8 billion from the P159.6 billion recorded in the same period in 2016.

Shares in SMC slipped by a centavo or 0.09% to P108.40 each on Monday.