DINALUPIHAN, Bataan – Chairman Felicito C. Payumo of the Bases Conversion Development Authority on Sunday announced that the agreement they recently signed with the Manila North Tollways Corporation on the upkeep of the Subic-Clark-Tarlac Expressway (SCTEx) would give BCDA a P30 billion profit.
In a meeting with journalists here, Payumo said BCDA will be receiving P64 billion “during the life of the agreement.”
“While taking on the burden of servicing the debt of P34 billion used in constructing the 94-kilometer SCTEx, the authority looks forward to a profit of P30 billion,” he said.
Not only the income but government is assured of a well-kept SCTEx after MNTC committed to spend P20.56-B for the upkeep of the expressway, the former chairman of the Subic Bay Metropolitan Authority said.
Payumo, also former three-term congressman of Bataan’s first District, described the BCDA-MNTC agreement at the Makati Shangrila last July 20 as “convergence but of a different kind.”
“One word that has been used often in communications technology is ‘convergence’ but what happened was convergence but of a different kind – a convergence of interests – that made possible the signing of the contract,” he said.
He said that BCDA’s interest was to find a partner who can give the motoring public efficient service and high-quality maintenance of the expressway while taking on the burden of servicing the debt of P34 billion.
“MNTC’s interest, on the other hand, was to operate an expressway built at the same, if not better, quality than the North Luzon Expressway that they now operate, thereby providing the public an integrated seamless operation,” Payumo said.
He also described the agreement as a legacy project that spanned the terms of three Presidents.
The loan was secured during the term of President Joseph Estrada but constructed during the administration of President Gloria Macapagal-Arroyo where a private sector partner has relieved government of the obligation to service its debts.
“By virtue of this new agreement, it can be said that it is during the term of Pres. Benigno Aquino III that the SCTEx had been built at no cost to the government,” Payumo said.
He considered the agreement as one private-public partnership (PPP) project that finally conforms to the spirit of the Build-Operate-Transfer Law that he principally authored in the House of Representatives.
“The Government did not give any direct guarantee on loans that may be contracted by MNTC, nor did it guarantee against any commercial or market risks,” Payumo said.
“In other words, if the projected traffic volume is not realized, MNTC alone bears all the consequences but I am sure that MNTC, given their experience in expressway operations, have high confidence in their traffic volume projections,” the BCDA head said.
He also noted that the purpose of the BOT Law is precisely to allow the private sector to participate and share the burden of development with the government, which has traditionally been solely responsible for the infrastructures development of the country.
But he said that in so many so -called BOT (now called PPP) projects, government has ended up paying the private sector partner because it has either guaranteed to take up all of the production or even the capacity of the plant, or gave a guaranteed minimum return on the investment.
“In the case of the BCDA-MNTC agreement, the reverse has happened,” Payumo said.
