October 20, 2015

Metro Pacific Investments Corp’s (MPI) connector road project faces delay

The Philippine Daily Inquirer today reported that Metro Pacific Investments Corp’s (MPI) 8-km elevated connector road is facing further delays and will not be awarded within this year. The project has been delayed for more than three year now because of disagreements on how the toll road project should be implemented. The original plan was to have the toll road project completed before the end of President Aquino’s term in mid-2016. Assuming the connector road project is approved for implementation early next year, it will have to go through the required Swiss challenge process which takes about 90 days to finish. That would place the awarding in early in 1H2016 with project completion by 2019 to 2020.

Our take: While the project is not expected to contribute to MPI’s profits in the next several years, a further delay could affect the project’s overall returns. Note that the connector road is one of two connector roads that will link MPI’s North Luzon Expressway with San Miguel Corp’s (SMC) South Luzon Expressway. SMC’s own connector project is targeted for completion by early 2018, two years ahead of MPI’s connector project. MPI is looking at this project to interconnect its toll road assets north and south of Metro Manila with enhancing the overall efficiency of its toll road operations. – WealthSec