Philippines suspends award of road PPP project

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Philippines suspends award of road PPP project

The Philippine Department of Public Works and Highways (DPWH) has indefinitely suspended the awarding of the P35.4 billion (US$810.72 million) Cavite Laguna Expressway (CALAX) project to the consortium team Orion.

The consortium team Orion is formed by AC Infrastructure Holdings Inc., Aboitiz Land Inc.Macquarie Infrastructure Holdings PhilippinesBouygues TravauxEgis Road Operations and Korea Expressway Corp.

The decision was made after disqualified bidder San Miguel Corp. (SMC), whose appeal was rejected by the DPWH several times, elevated the issue to Office of the President (OP). On June 30, the OP directed DPWH to defer the implementation of the resolution while the appeal is still pending with Malacañang.

For the CALAX project, the private partner shall finance, design, construct, operate and maintain the 47 kilometers close-system toll expressway starting from the existing Cavite Expressway (CAVITEX) and ending at South Luzon Expressway (SLEX) Mamplasan Interchange in Binan, Laguna.  This covers the 28.9 km Cavite Section from Kawit to Silang and the 18.1 km Laguna Section from Silang to SLEX.

On June 16 we reported that Team Orion has offered the highest bid for the PPP road project. The team offered to pay the government an P11.66-billion premium, topping the P11.33 billion extended by the consortium of Metro Pacific Tollways Development Corporation (MPTDC) and Leighton Contractors (Philippines) Inc. Alloy MTD Philippines, owned by Malaysia's second-largest toll-road operator offered a P922-million bid.

Few days before that we published that, DPWH had disqualified on Wednesday, June 11, conglomerate San Miguel Corp. (SMC) from the project. DPWH's Special Bids and Awards Committee (SBAC) disqualified Optimal Infrastructure Development Inc. (San Miguel Corp.) after it failed to comply with the bidding rules, particularly on the validity of its bid security.

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