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Friday, March 29, 2024

All bidders ignore Laguna Lakeshore

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The Public Works Department on Monday announced a failed bidding for the P122.8-billion Laguna Lakeshore Expressway Project, after the government received no offer from pre-qualified bidders.

“It’s a failed bidding,” Ariel Angeles, director of public-private partnership service of the Public Works Department said, referring to the largest project under the PPP scheme.

Angeles said the three pre-qualified bidders—San Miguel Holdings Corp., Alloy Pavi Harshen LLEDP Consortium and Team Trident—did not submit any bid.

“The Laguna lakeshore project is just not feasible. Government will have to re-examine its assumptions and redesign a mutually beneficial contractual structure best suited for a deal as large and intricate as this one, given its potential to create opportunities that will generate the greatest benefit to a lot of people,” San Miguel Corp. president and chief operating officer Ramon Ang said in a statement.

Team Trident is composed of Trident Infrastructure and Development Corp., Ayala Land Inc., Megaworld Corp., Aboitiz Equity Ventures Inc. and SM Prime Holdings Inc.

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The Alloy-Pavi Hanshin LLEDP Consortium consists of Malaysia’s Alloy MTD Capital Berhad, Prime Asset Ventures Inc. and Hanshin Engineering Construction. 

The three prospective bidders said the failed bidding was due to the lack of commercial viability of the project, which involves the construction of a flood control dike, a 47-kilometer, six-lane expressway on top of it and the reclamation of over 700 hectares of land for commercial development.

“This is probably the country’s largest and most complex PPP project to date and frankly, from an economic viability perspective and risk allocation perspective, we found that the government wouldn’t provide such concession agreement that addressed all these concerns of the private sector,”  Team Trident spokesman Roman Azanza III said.

“The most logical approach for us was not to proceed. We have to stop and really give credit to all the men and women in government, their advisers and our advisers including the years worth of effort into this really complex project. But the end of the day, of course, a viable solution could not be found for all parties concerned,” Azanza said.

Isaac David, authorized representative of Alloy-PAVI LLEDP Consortium, said the foreign group backed out of the project because of unresolved issues affecting the propriety and validity of the procurement process. 

“We strongly believe that the bidding process is illegal and unenforceable transaction unless there is a signed presidential proclamation and signed tripartite agreement between PRA/LLDA/DPWH prior to the bidding,” David said, referring to the Philippine Reclamation Authority , Laguna Lake Development Authority and Public Works Department. 

David said a failure to sign a tripartite agreement would make the project “un-bankable.”

David said the advent of the election fever and partisan politics could also cast a misimpression of the LLED project as a multi-billion “midnight deal.”

“Thus, prudence dictates that the bidding of the cited PPP transaction deserves to be deferred until after the new administration has taken over,” David said. 

Public Works Secretary Rogelio Singson told reporters his agency would reassess the Laguna Lakeshore Project and determine why the bidding failed. 

“We received some letters. So, we will have to assess,” he said. 

Andrei Palacios, executive director of PPP Center, said the agency would support DPWH in taking next steps on the Laguna Lakeshore Project.

“[But] I doubt if we can do another bidding [under] this administration,” Palacios said.

The LLED concession will last 37 years, including seven years for design and construction and 30 years for operation and maintenance. It will be financed mainly by private capital with no government subsidy, except for right-of-way costs.

 

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