Duterte means business
I generally hate leaving Metro Manila and going home to my province somewhere in Central Luzon during All Saints Day because of the monstrous traffic along North Luzon Expressway (NLEX).
But going home last Oct. 30-31 was a breeze, despite the fact that many people who do not have departed loved ones went up North to take advantage of the four-day weekend.
Media reports confirmed motorists generally experienced smooth and comfortable rides as a result of the regular maintenance works and road improvements done by the toll operators all year round.
At NLEX, for instance, authorities had set up eight additional booths at the Bocaue Tollway Plaza, installed several portable booths in Mindanao Avenue and Balintawak, and hired ambulant tellers to accommodate the massive volume of vehicles that passed through the toll gates.
For northbound motorists, road trips have become smoother and more convenient since this summer because of the P650million integration of the North Luzon Expressway (NLEX) and Subic-Clark-Tarlac Expressway (SCTEX) implemented by operators Manila North Tollways Corp. (MNTC) and Tollways Management Corp. (TMC), respectively, since last April.
The integration of NLEX and SCTEX toll collection systems reduced toll collection stops from five to only two from Balintawak to Subic Freeport and back, and from four to two from Balintawak to Tarlac City and back.
The operators of NLEX, SCTEX and even Cavitex have invested billions of pesos on road improvements, even if the toll adjustments to which they are entitled to under their respective operation and maintenance ( O&M) contracts, and have been requesting for several years now, have not been granted by the Toll Regulatory Board (TRB).
Foregone revenues of the Manila North Tollways Corp. (MNTC) and the Cavitex Infrastructure Corp. (CIC) have reached P3.9 billion by the end of the Aquino administration, and P5 billion to date.
The respective O&M contracts of MNTC and CIC with government provide for periodic fee adjustments to enable them to recoup their multibillion-peso annual investments in maintenance and upgrade works, as well as rising costs.
The Supreme Court, itself, in one of its rulings, has backed a “reasonable” rate of return for operators via periodic adjustments, saying that “while the interests of the public are ideally to be accorded primacy in considering government contracts, the reality on the ground is that the tollway projects may not at all be possible or would be difficult to realize without the involvement of the investing private sector which expects its usual share of profit.”
MNTC filed early this year an arbitration case before the United Nations Commission on International Trade Law (UNCITRAL) in Geneva, Switzerland in a bid to compel the then-Aquino government to compensate it for P3 billion in foregone revenues covering Jan. 2013-Dec. 2015 due to the state’s inaction on the long-due toll hike petitions for NLEX and Cavitex. It does not include yet an additional P111.8 million for every month of delay in compensation starting in Jan. 2016.
The MPIC, which recently consolidated its toll road operations by merging the Tollways Management Corp. (TMC) with the MNTC, is also seeking a separate compensation of P877 million, this time for its subsidiary CIC that runs Cavitex.
CIC, which has a pending petition before the TRB for a 20 percent increase in Cavitex toll fees, has filed a separate arbitration case in New York.
The MNTC had filed its NLEX arbitration case before the United Nations Commission on International Trade Law (UNCITRAL) in Geneva, Switzerland.
Last May, MNTC president and chief executive Rodrigo Franco said he was open to an out-of-court settlement on the arbitration case involving the firm’s P3-billion compensation claim.
Transportation Undersecretary for Toll Roads Noel Eli Kintanar has said government is working to resolve the cases, and that the matter will be taken up under the framework of the existing concession agreements which allow toll rate adjustments every two years.
In his inaugural address last June 30, President Duterte ordered all department secretaries and heads of agencies to refrain from changing and bending the rules of government contracts, transactions and projects already approved and awaiting implementation, saying that changing the rules when the game is on-going is wrong.
In the meantime, toll operators are spending billions of pesos to upgrade the toll roads they operate as part of their commitment to provide seamless travel to motorists.
The MNTC, for instance, is spending P2-billion for an SCTEX upgrade over the next three years. It spent P287 million for the construction of eight new toll lanes at NLEX, which expanded the Bocaue exit from 26 to 34 lanes.
MNTC and CIC, their respective officers have pointed out, are only asking for what they are entitled to - periodic rate adjustments which are guaranteed under their concession agreements with the national government.
TRB’s failure to consider such adjustments is unfair to these O&M contractors, and underlines the kind of policy inconsistency or regulatory risks that spook investors.
Resolving the toll rate adjustments would send the right signal to the business community here and abroad that the Duterte administration means business and is serious about economic progress, and that unlike the previous administrations, it knows how to honor contracts.