Makati mass transport bid to face Swiss challenge

IRC Properties, Inc. said its proposed $3.7-billion Makati Mass Transport system will now undergo Swiss challenge after securing approval from the Makati city government.

In a disclosure to the stock exchange on Tuesday, the listed firm said it has received the go signal from the local government for the competitive bid process. The company was awarded the original proponent status (OPS) for the project last month.

“IRC wishes to inform the investing public that pursuant to Makati City Ordinance No. 2014051… a joint certification was today executed between the Makati City Government and IRC, certifying, among others, that IRC, as the proponent, is eligible to participate as the original proponent in the unsolicited proposal and competitive/Swiss Challenge process,” the company said in a statement.

Under a Swiss challenge, other parties are invited to match the bid of the original proponent. The party with the OPS will then have the advantage to outmatch the lowest proposal in order to secure the project.

IRC has partnered with several foreign firms, namely Greenland Holdings Group, Jiangsu Provincial Construction Group Co. Ltd., Kwan On Holdings Ltd., and China Harbour Engineering Co. Ltd. for its proposal to construct an 11- kilometer intra- city mass transport system with up to 10 stations.

The project is expected to connect key points in Makati and will be built at no cost to the government.

The company’s proposal comes alongside the government’s accelerated spending for infrastructure spending under President Rodrigo R. Duterte’s administration. IRC said the Makati mass transport system is expected to complement other mass transport projects such as the Metro Rail Transit, the proposed Metro Manila Mega Subway and the Pasig River Ferry.

To support its foray into infrastructure, the company is changing its corporate name to Philippine Infradev Holdings, Inc., alongside a change in its primary purpose to that of a holding firm with main interests in infrastructure and real estate development.

The company on Monday also increased its authorized capital stock to P19.5 billion, consisting of 9.5 billion common shares with a par value of P1 per share, and one billion preferred shares with a par value of P10 per share. The shares may be issued through private placement, preemptive rights offering, or other arrangements.

A fourth of the IRC’s increase in capital stock will be issued through private placement at a price of P1.10 to P1.40 per share, depending on the terms and conditions to be set by the company’s executive committee.

Incorporated in 1975, IRC’s core investments was initially in the acquisition, reclamation, development, and exploration of land, forests, minerals, oil, gas, and other resources. The company halted all exploration activities following the global recession in the 1970s, and bounced back as a property developer in 2013.

IRC’s attributable profit jumped 407% to P25.4 million during the first quarter of 2018, driven by a 47% increase in revenues to P75.17 million.

Shares in IRC went down seven centavos or 4.58% to close at P1.46 each yesterday.