PNCC to serivce IOUs by selling equity in SLTC

Tollway operator Philippine National Construction Corp. (PNCC) owes the Toll Regulatory Board P3.2 billion in unpaid concession fees, which it intends to service by selling its equity participation in South Luzon Tollway Corp. (SLTC). PNCC president Maria Theresa Defensor said that PNCC would service its loans by selling its 20-percent stake in South Luzon Tollway. Using data from the Finance Department, the equity stake could generate P3.6 billion. Concession fees that originally totaled P900 million ballooned by more than 3.5 times over four years due to interest and surcharges. Apart from dividend earnings from the equity stake, PNCC has the equivalent of 1.75 percent share in SLTC gross revenues that is programmed to rise to 3 percent over time. However, a check with the TRB showed that PNCC owe the TRB P3.943 billion. In a letter dated July 16, Finance Secretary Cesar Purisima urged PNCC to settle the matter with the board. Regulations require PNCC to remit 20 percent of its gross income as concession fees to the TRB each year. The Finance Department also asked PNCC to remit to the Treasury some P7.1 billion in toll revenues collected since May 1, 2007, representing collections after its franchise expired on April 30 that same year. The department said that PNCC can no longer collect from tollway users since its franchise had expired and Congress had not acted on it since. PNCC turned over P420 million to the TRB as initial reimbursement even though the Department of Justice and the Office of the Government Corporate Counsel ruled that the collection represented corporate funds and may not be remitted as ordered, Defensor said. —JE, GMANews.TV