CALAX mired in controversy as re-bid awaited

Contenders for the Philippines’ $790m CALAX Expressway PPP are waiting on the implementing agency’s decision regarding the parameters of a re-bid.

The Philippines Department of Public Works and Highways (DPWH), the implementing agency for the P35.4 billion (€633 million; $790 million) CALAX express highway project, is mulling the parameters of a re-bidding process, after President Aquino put an end to the original bid.

An epic saga involving a legal dispute over a ‘typographical error’ by the highest bidding consortium, Team Optimal, not only disqualified the team, but also ended up annulling the bid as a whole.

As allegations swirl in the local press that the invalidation of the bid procedure is legally groundless, concern is being expressed by domestic businesses at what some perceive as a purely political and opportunistic decision that may discredit the efforts of the country’s PPP Center and government to enhance foreign investors’ confidence in the country’s commitment to the rule of law.

“[…] the proposal for government to actually undertake the project defeats the whole purpose of the PPP (Public-Private Partnership) project wherein to free our resources for other infrastructure needs. There are private sector individuals or companies that are willing to provide us the infrastructure we need and to deliver a premium to us. So how do we meet the attainment of the goal of getting the best deal for our people? So I am inclined to think that a re-bid will be the proper course of action on this particular issue,” President Aquino was reported by local press to have said on the sidelines of his annual forum in October, one of the quotes fuelling the controversy.

The DPWH has already announced an indicative timeline of mid 2015 for re-bidding to take place, with clarification over the extent of the re-bidding procedure to be announced shortly.

Ayala Corporation of the Team Orion consortium – who were expected to win the original bid – announced earlier this week they had no intention of challenging the President’s decision. Ayala Corporation confirmed to Infrastructure Investor during a phone interview today that they did not wish to participate in the re-bid.

MTD Philippines, a third qualified contender, decided to opt out of any re-bid last Sunday.

Metro Pacific Tollways Corp. (MPTC) announced it had renewed its bid bond on the project but was not committed to re-bidding yet as they would wait on the DPWH to issue the terms of the bid.

The CALAX project – a major public-private partnership (PPP) under the Aquino administration – consists of the financing, design, construction, operation, and maintenance of a four-lane, 47-kilometer (Km) closed-system toll expressway connecting the South Luzon Expressway (SLEX) and the Cavite Expressway.