October 27, 2014

President Aquino open to rebid CALAX

In a forum yesterday, President Aquino reportedly said that the government is inclined to rebid the P35.4b Cavite Laguna Expressway (CALAX) amid a dispute over the bidding held last June. The dispute stems over San Miguel Corp’s (SMC) disqualification from the bidding, despite having the highest bid of P20.1b for the project, on a technicality concerning its P355m bid security, which fell four days short of the required 180 days.

Team Orion, the consortium of Ayala Corp’s (AC, Buy) AC Infrastrucutre Holdings Corp and Aboitiz Equity Ventures Inc’s (AEV) Aboitiz Land Inc, ended up as the highest bidder with P11.66b, besting the P11.33b and P922m offers made by Metro Investment Corp’s (MPI) MPCALA Holdings Inc and Malaysia’s MTD Group, respectively. SMC filed a notice of appeal for the government to reconsider its bid.

Our take: While the government has yet to issue a final decision on the case, we see the possibility of a prolonged legal battle should the government decide to re-bid that would lead to a further delay in the awarding of government’s biggest PPP project to date. Team Orion said it would “not participate if the government decides to re-bid the project because there is no legal basis for this course of action”. The statement was reportedly echoed by the two other qualified bidders. – WealthSec