San Miguel considering gov't stake in SLEx

Metro Pacific Tollways Corp. will face competition in its bid to operate the two main entry and exit points north and south of Metro Manila after San Miguel Corp. said it was also interested in buying the state-controlled Philippine National Construction Corp.'s (PNCC) stake in the South Luzon Expressway (SLEx). San Miguel President Ramon S. Ang said his firm would seek the PNCC's 20-percent stake in South Luzon Tollway Corp., the joint venture that upgraded the SLEx, if there would be a public bidding. PNCC earlier said it would sell its stake in the South Luzon Tollway to pay for P5 billion in debts to the government, build a road that will connect the SLEx near the Susana Heights interchange to the southern end of the Daang Hari Road in Cavite, and help the government ease the budget deficit. The sale of the PNCC's 20-percent stake in the South Luzon Tollway will come in a package, where the buyer must also buy the government-led company's 40 percent stake in the Manila Toll Expressway System, Inc., the operation and maintenance firm for the SLEx. But PNCC's Malaysian partner in the South Luzon Tollway and Manila Toll Expressway, MTD Capital Bhd, holds the right to buy the PNCC's stake ahead of other parties, which means Metro Pacific Tollways and the San Miguel camp could only buy the government's stake if MTD Capital is not interested. The PNCC earlier noted that if the Malaysian firm was not interested in buying the government interest, it would go to the Department of Finance to seek an opinion on whether the PNCC should hold an auction for the stake. MTD Capital, which owns 80 percent of the South Luzon Tollway and 30 percent of the Manila Toll Expressway, was the sole funder of the SLEx rehabilitation that started in 2005. The South Luzon Tollway won the right to rehabilitate, expand, operate and maintain the SLEx under a concession deal approved by Malacañang in 2006. The project had three components — the rehabilitation and widening of the 1.2-kilometer (km) Alabang Viaduct, which was completed in 2007; the rehabilitation and widening of the 27.3-km expressway linking Alabang to Calamba in Laguna province; and the construction of a 7.6-km extension from Calamba to Sto. Tomas in Batangas province. Buying a stake in the SLEx will allow Metro Pacific Tollways to realize its goal to operate a network of tollways. It operates the North Luzon Expressway and holds a minority interest in the Skyway 2 project, an extension of the elevated expressway over the SLEx from Bicutan in Taguig to Alabang. Metro Pacific Tollways is a unit of Metro Pacific Investments Corp., the Philippine unit of Hong Kong's First Pacific Co. Ltd., which partly owns Philippine Long Distance Telephone (PLDT) Co. Meanwhile, acquiring a stake in the SLEx will make San Miguel a major player in the infrastructure sector. The diversifying food and beverage conglomerate has partnered with Star Tollway Corp. to establish Northlink Toll Management, Inc., one of two companies participating in the bidding for the 93.77-km Subic-Clark-Tarlac Expressway. The other bidder is Metro Pacific Tollways. Last year, San Miguel became the single biggest shareholder of Private Infrastructure Development Corp. after unit Rapid Thoroughfares, Inc. acquired 35 percent of the consortium that will build the 88-km Tarlac-Pangasinan-La Union Toll Expressway project. San Miguel earlier said it would increase its stake in Private Infrastructure to at least 51 percent. Mediaquest Holdings, Inc., a unit of the PLDT Beneficial Trust Fund, has a minority stake in BusinessWorld. — Kristine Jane R. Liu, BusinessWorld