MANILA, Philippines - Manny Pangilinan's Metro Pacific Investments Corp. suffers a blow in its bid to expand its tollway operations southward.

Metro Pacific, which operates the North Luzon Expressway (NLEX) and the Subic-Clark-Tarlac Expressway (SCTEX), has said it was looking into expanding its minority interest in the South Luzon Expressway’s Skyway project, controlled by Indonesia's Citra group.

But San Miguel Corp. yesterday disclosed it’s buying 46% of the owner of the Skyway concession holder, Citra Metro Manila Tollways Corp.

Metro Pacific President Jose Lim said the company still needs to clear up what the San Miguel buy-in means to their plans.

"We've been aware that Citra shareholders have been speaking with San Miguel about expansion," Lim said in an ABS-CBN News Channel interview. "It’s not clear to me whether this holding company that was formed will be for expansion or whether it will involve the skyway, the existing tollway operations of CMMTC."

"We are interested in increasing our stake in the southern tollways, we are not clear if they are in or not, but we intend to look for possible acquisitions in both or any of the three tollways systems in the south."

SLEX is composed of Skyway, South Luzon Tollway and Southern Luzon Arterial Road (STAR).

Lim also said Metro Pacific will still pursue the connector road project for the NLEX and SLEX.

The Citra group is challenging Metro Pacific's bid, saying the connector road is part of Citra’s original 1995 mandate.

"Well the franchise originally included an expansion called Stage 3 to connect the Skyway with the NLEX, so obviously they have the right to submit a proposal, but for many years the company was in default, and wasn't able to do so," Lim said. "Meantime, our own tollway group submitted a proposal which has been accepted by the Department of Public Works & Highways after a lot of reviews and technical consultations."

The government accepted Metro Pacific’s unsolicited proposal in June last year. Under the rules for unsolicited offers, the proposal will go through a Swiss challenge, in which other groups can submit better bids, which the original proponent can decide to match.

"I understand a Japanese consultant was brought in to look at the alignment and that confirmed that the alignment that we have proposed is superior to any of the other existing alignment," Lim said.

"We are quite confident that we have passed all the technical hurdles and we are ready for a Swiss challenge," he said.

But an official of CMMTC, who declined to be identified, said he had no idea what Lim meant by "default."

He also cited a Justice Department opinion, which said the Citra group owns the franchise for the connector road.

Citra recently announced it has set aside $1.5 billion for tollroad projects, including Stage 3 and 4 of the Skyway, which it says includes a connector for NLEX and SLEX.