San Miguel unit starts North Luzon toll-road venture in April
MANILA, Philippines - The consortium of Filipino builders backed by conglomerate San Miguel Corp. (SMC) expects to start full construction of the P19-billion Tarlac-Pangasinan-La Union Expressway (Tplex) by April.
This, after the government-run National Development Co. (NDC) approves a P3-billion bridge loan which will allow the Private Infra Dev Corp. (PIDC) to build the first section of the four-lane 88.5-kilometer highway, a top official said.
“We are prepared to start but critical to our ability to mobilize is the approval of the NDC bridge loan,” said PIDC chief finance officer Myra Reinoso in a phone interview.
She said the group has started construction but only “on a limited scale.”
PIDC, which also counts Consunji-led DMCI Holdings Inc. as a major shareholder, has P1.5 billion in equity, said Reinoso. This is not even enough to meet the roughly P7-billion budget allotted for the first and longest section of the highway which will connect Tarlac to Rosales, Pangasinan.
“The [NDC] loan is just to assure us that the work will be continuous,” said Reinoso.
NDC officials were unavailable for comment on Monday, but Reinoso said PIDC expects to obtain the loan approval by the end of this month.
On top of its own equity and the NDC loan, PIDC will also borrow from private banks.
Meanwhile, initial delays by the government to deliver the right of way have already pushed back the start of the Tplex construction.
PIDC originally planned to start construction in the last quarter of 2009.
The consortium expects to complete the whole expressway in 2014 which will cut travel time from Manila to Baguio by half.
In September last year, SMC, through toll-road subsidiary Rapid Thoroughfares Inc., bought into PIDC after it acquired a 35% stake in a deal that also gave it an option to raise its shareholding in the company to 51%.
Rapid Thoroughfares is already preparing for the full construction of Tplex. The firm recently applied for an increase in authorized capital to P400 million, from just P1 million.
PIDC stakeholders also include First Balfour Inc., DM Wenceslao and Associates Inc., CM Pancho Construction Inc., RD Policarpio and Co. Inc., JV Angeles Construction Corp., JE Manalo and Co. Inc., New Kanlaon Construction Inc., EEI Corp. and Rockford Development Corp.
Tplex is the first of two toll road projects of SMC in line with its expansion into heavy infrastructure and mining outside its core food and drinks business.
SMC is also in final stage of talks to acquire up to 67% of infrastructure company Ausphil Tollways Corp., the main proponent behind the North Luzon East Expressway (NLEE), possibly before the end of this month.
NLEE is four-lane toll-road project which will connect Commonwealth Avenue in La Mesa, Quezon City to Cabanatuan in Nueva Ecija.