MPTC eager to fully privatize Cavitex operations

Metro Pacific Tollways Corporation (MPTC) President and Chief Executive Officer (CEO) Rogelio L. Singson expressed eagerness to fully transfer the operations and management of Cavitex to the Cavitex Infrastructure Corp. (CIC) as it is the “whole intention of a public-private partnership.”

In an online press briefing on April 12 discussing the case filed by Public Estates Authority Tollway Corporation (PEATC), the subisidiary of its Cavitex venture partner Philippine Reclamation Authority (PRA), Singson remarked that the project “was supposed to be a privatization, but government continues to operate the facilities.”

Under the joint venture agreement for Cavitex, the PRA through PEATC is responsible for the operations and management of the expressways, while CIC will handle the construction, financing, and design.

This is unlike the model for NLEX where the concessionaires from the private sector are the ones that handle the operations and management.

“We are actually open to full privatization by acquiring whatever residual value estimates they have, in terms of their project. At the end of the project, it reverts back to government,” said Singson.

The company disclosed that it had a standing offer worth P2.5 billion to buy-out the PRA’S residual interest in the project, which is 10 percent of the revenue. The most recent and fourth offer was last year, according to MPTC Chief Finance Officer (CFO) Christopher Lizo.

“Unfortunately they never replied on the offer. If they did, of course we’re willing to negotiate with them on the offer, but right now we don’t know if the offer is acceptable. But it is something we want to pursue,” said Lizo.

In the agreement, CIC receives 90 percent of the revenue share while PRA or PEATC gets 10 percent. PEATC has proposed a 60-40 share, but MPTC said the terms of the agreement must first be fulfilled.

“The condition is [to] finish all that has been discussed since day one, [which are] R1, R1 Extension, and CAVITEX C-5 Link. They’re not completed yet, so we can’t shift to 60-40. You can only shift once all the loans that you have secured for the projects are fully paid, for us to recover the investments,” explained Singson.

The PRA or PEATC has no contribution on the financing of the projects, he noted.

MPTC has already invested around P25 billion in its projects, including the completion of the CAVITEX C-5 Link. It has a total loan of P7 billion, with roughly another P4 billion needed to complete all of their projects.

The entire Cavitex project covers a total of 23.8 kilometers (km), comprising R1 (7.5 km), R1 Extensions (8.6 km) & Cavitex-c5 (7.7 km).