MPIC plans to borrow up to for CALAX project, opens to partners

Metro Pacific Investments Corporation (MPIC) is looking to fund the construction of the $1.4-billion Cavite Laguna Expressway (CALAX) with a mix of internal funds and borrowings although it is also open to taking in a partner.

In an interview after the firm’s annual stockholders’ meeting, MPIC chief finance officer David Nicol said they may be borrowing billion to billion from local and foreign banks with a term of about 10 years.

“We prepared the funds for the initial payment, that’s already been inputed for our budget this year. The next big payments is when we start construction of the road but that needs to wait for the right of way so that’s about two years away,” said MPCI president Jose Ma. K. Lim.

Lim added that “we have no plans for an equity fund-raising” since there are a lot of local and foreign banks that are offering to help fund the project.

He said the funding mix will depend “on the offers we get from these banks and our internal resources because we have other sources of cash as well.”

“Obviously, we will be adjusting the leverage of this to make sure that the traffic along CALAX will provide enough revenues for debt servicing. We have not determined that at this time,” Lim said.

Meanwhile, MPIC Chairman Manuel V. Pangilinan said they are open to taking in a partner for the project but noted that “we haven’t got the notice of award yet so until its official its difficult to be talking something we don’t have.”

Pangilinan said they have not yet been approached by any prospective partners. “I think they must be waiting for the notice of award to be given to us also,” he added.

While the CALAX is a huge undertaking, Pangilinan said “we will still look at other PPP projects. We will look at the regional airports, once they have determined the terms of the bid, and the O&M possibility for LRT 2. Those are the 2 projects that we are looking at,” he said.

Originally priced at billion, the CALAX project involves the financing, design and construction of a 45-kilometer toll road that will connect the Kawit exit of the Manila-Cavite Toll Expressway (Cavitex) to the Mamplasan Exit of South Luzon Expressway.

Under the project’s timeline, preparation of detailed engineering design for CALAX is from July 2015 to July, 2016. Construction period will run from July, 2016 to July, 2020 and the winning operator will operate and maintain the expressway from July, 2020 to July, 2050.