For its possible first foray into the infrastructure business, diversified conglomerate San Miguel Corp. is budgeting about P3 billion as its equity in the Tarlac-La Union Expressway Project (TLUTE).

In an interview with reporters on Tuesday, San Miguel vice chairman and president Ramon S. Ang said the company's excess cash flow could fund the project investment cost.

San Miguel is eyeing a 51 percent stake in the P15.2 billion road project. It is now conducting due diligence on TLUTE, which is a build-transfer-operate project with the Philippine government involving the two-phased construction of the 88.5-kilometer, four-lane expressway from La Paz, Tarlac to Rosario, La Union.

Leading the local private contractors that offered to build the TLUTE is listed construction firm DMCI. The other are First Balfour, Inc., DM Wenceslao and Associates Inc., CM Pancho Construction, Inc., RD Policaprio and Co., Inc., JV Angeles Construction Corp., JE Manalo and Co., Inc., New Kanlaon Construction, Inc., EEI Corp., and Rockford Development Corp.

TLUTE is targeted for completion in 2012. Once completed, travel time from Manila to Baguio will be reduced from 6 to 3 hours with a safe speed of 80 kph.

Following the TLUTE's completion, the land title will be transferred to the Department of Public Works and Highways (DPWH). After which, a toll operating agreement will be signed for a 35-year concession contract that can be extended for 15 years.

Of the total project cost, 57 percent or P8.59 billion will be financed through loans and 24 percent or P3.68 billion from equity. The remaining 19 percent, amounting to about P2.91 billion, will be provided by the government in the form of a subsidy.