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The Department of Public Works and Highways of Philippines has recently announced that it has terminated the bidding for the Laguna Lakeshore Expressway-Dike PPP project after no offers were made for the deal.

The three groups that had been pre-qualified to bid for the Laguna Lakeshore Expressway-Dike PPP project had until March 28 to submit their offers, but any of these groups have submitted a final bid.

The groups which were prequalified to carry out the project are the following:

• San Miguel Corp.,
• Team Trident, composed of Ayala, Aboitiz, SM Prime Holdings Inc and Megaworld,
• Alloy-PAVI-Hanshin LLEDP consortium made up of Malaysia's Alloy MTD Capital Berhad, Prime Asset Ventures Inc, and Hanshin Engineering Construction.

However, the shortlisted teams were concerned on the economic viability of the project, the balance of risks and rewards as well as securing financing for the project. The groups have also expressed that the Government would have to re-design a mutually beneficial contract.

Additionally, the Philippines will have elections on May 9, a fact that also gives complexity to the process. The groups want more time to work with the government on a concession agreement that addresses the concerns of the private sector.

Ramon S. Ang, San Miguel Corp. president and chief operating officer, said:

“Government will have to re-examine its assumptions and redesign a mutually beneficial contractual structure best suited for a deal as large and complex as this one, given its potential to create opportunities that will generate the greatest benefit to a lot of people.” 

Isaac David, Alloy Pavi Hanshin LLEDP Consortium’s authorized representative, stated:

“With due respect, we strongly believe the bidding process is illegal and unenforceable transaction unless there is a signed presidential proclamation and signed tripartite agreement between PRA (Philippine Reclamation Authority)/LLDA (Laguna Lake Development Authority)/DPWH prior to the bidding.”

Roman Azanza, first vice president for business development at Aboitiz, commented:

"Given the complexity of the project, the group wanted more time to work with the government on a concession agreement that addresses the concerns of the private sector. If they (government) can come out with a revised CA that tackles most if not all of these concerns, then I think we would be willing to revisit (the project)."

The Laguna Lakeshore Expressway-Dike PPP project involves the financing, design, construction as well as operations and maintenance of a 47-kilometer flood control dike with expressway toll roads under a 37-year cooperation period. The project consists of two parts, namely:

• Construction of a 47 kilometer flood control dike (on top of which will be a six-lane expressway) from Taguig City to Los Baños for about P64.914 billion; and

• Reclamation of 700 hectares west of the expressway-dike for about P57.897 billion to create opportunities for developing a new business and residential area on reclaimed land, to enhance regional and urban development.

The total project investment is estimated at P122.8 billion (US$2.62 billion), of which P64.914 billion (US$1.39 billion) will be for the development of the 47 kilometer flood control dike-highway