SCTEX deal shows how to do PPPs, says BCDA

State-run Bases Conversion and Development Authority (BCDA) on Thursday described as a “good example" of a public-private partnership (PPP) the agreement signed this week with MNTC on the management and operations of the Subic-Clark-Tarlac Expressway (SCTEX). The SCTEX management and operation deal that the Manila North Tollways Corp. (MNTC) sealed with the BCDA on Monday is a “major breakthrough towards establishing a good business model" for PPPs, said BCDA president and CEO Arnel Casanova in a statement. The statement said the deal enables the MNTC to manage, operate, and maintain SCTEX for 33 years. It also “assures BCDA of sufficient cashflow streams in any given year to service the repayment of foreign loans that bankrolled the construction of the 93.7-kilometer tollway," according to the BCDA. BCDA chairperson Felicito Payumo also said the agreement satisfies government’s requisite to cover BCDA’s debt service obligations to the Japan International Cooperation Agency. “Not only will BCDA not spend for the expressway, it will still earn from the project since the total revenue share of BCDA (P64 billion) during the operating period is roughly double that of the debt service (P34 billion). Plus, it will get back the expressway with its potential for another round of revenues," Payumo said. “MNTC, on the other hand, will only have to contend with commercial risks associated with unmet traffic volume projections. There is no longer any construction risks," he added. Payumo said the BCDA-MNTC model “also shows the way for constructing what initially are non-viable projects but with high economic benefits," according to the statement. — With Paterno Esmaquel II/VS, GMA News