Philippines’ largest highway P3 gets under way

The Philippine government will offer the top bidder the option to sell 700 hectares of “prime lakefront property” for mixed-use development.

At the twice-delayed close of the prequalification period on the Laguna Lakeshore Expressway-Dike project on February 27, the Philippine Department of Public Works and Highway (DPWH) announced that four consortia had filed initial paperwork to bid on the estimated P$123 billion ($2.79 billion ; €2.49 billion) public-private partnership (PPP; P3) project.

Twenty-four interested parties purchased prequalification documents prior to deadline, with Trident Infrastructure and Development – a first-time partnership comprised of Aboitiz Equity Ventures, Megaworld, Ayala Land and SM Prime Holdings – San Miguel, Rainbow Holdings, and the MTD-PAVI-Hansin Consortium emerging as competitors in the bidding process.

DPWH is the implementing agency of the project, with the Asian Development Bank, the Association of Southeast Asian Nations (ASEAN), the Australian government via AusAid, and the Canadian International Development Agency (CIDA) as partners. Private sector partners include AMCHAM Philippines, Australian Philippines Business Council, the European Chamber of Commerce of the Philippines, the Makati Business Club, Management Associations of the Philippines and the Philippine Constructors Association, according to the Philippines’ PPP Center website.

The expressway-dike, which is set to become the largest highway P3 project undertaken so far by DPWH, was designed with a dual-purpose mission. The 45-kilometre dike will serve to mitigate flooding along the western edge of the lake, while the 47-kilometre, six-lane expressway aims to ease regional traffic flow through the creation of an alternative option to the existing Calamba-Los Banos route.

The expressway will be located 500 metres from, and run parallel to, the western edge of the lake. It will feature seven 100-hectare islands to be built from reclaimed land, eight interchanges, 16 bridges and 16 pumping stations.

The construction and land reclamation period is expected to last eight years, according to DPWH secretary Rogelio Singson, after which the private partner will transfer ownership to the Philippine government while simultaneously operating and maintaining the expressway and dike for 30 years under a design-build-operate-transfer (DBOT) agreement.

Along with collecting tolls throughout the operational period of the concession, Singson said the private partner will have the option of selling plot titles for mixed-use development from the combined 700-hectare islands as pay-for under a second design-build-transfer (DBT) contract through the use of a special purpose vehicle (SPV).

“This is so far our most ambitious toll road component because it has a major reclamation that creates value for the operator,” Singson said at the CG-LA 8th Global Infrastructure Forum in New York City last week. “The land can be mixed-use; we're not prescribing any particular use for the land.”

Singson noted that the developer will only be allowed to sell land once work has been completed.

Bidding documents are set to be issued on March 25, with a submission deadline of July 6. Notice of award is scheduled for August 26, according to the most current project timeline. DPWH hopes to see construction work start sometime in September.