June 13, 2014

SMC disqualified from CALAX bidding

San Miguel Corp (SMC, Not rated) was reportedly disqualified from the auction for the P35.42b 47-kilometer Cavite-Laguna Expressway project on technical grounds. The special bids and awards committee ruled that SMC’s bid security was defective. Government will push through with opening the financial bids today despite SMC’s statement that it will explore its legal options.

Our take: SMC’s disqualification will leave three groups in the running for the coveted project. These include MPCALA Holdings Inc (a unit of Metro Pacific Investments Corp’s tollroad arm); Team Orion consortium of Ayala Corp (thru AC Infrastructure), Aboitiz Land and Macquarie Infrastructure Holdings PhilsPte Ltd, and Malaysia-based Alloy MTD Phils Inc.

MPI will have the most to gain from winning the project as this would allow it greater flexibility in controlling traffic volume and promote synergies by linking CALAX with its other tollroad assets such as CAVITEX, the North-South Luzon expressway connector road, and the North Luzon Expressway. Meanwhile, clinching the contract will also bode well for Ayala Land Inc (a unit of AC) which has huge land bank and ongoing projects in the Cavite-Laguna area. – WealthSec