Posted on February 16, 2011 10:46:25 PM [ BusinessWorld Online ]
UEM-MARA Philippines Corp., the private concessionaire of the Manila-Cavite Toll Expressway Project, said yesterday it will open an extension of the Coastal Road to the public on April 1, after three years of delay.
The opening of the seven-kilometer (km.) Zapote-Kawit segment followed debt watcher Moody’s Investors Service decision to change its credit outlook on the project firm to “negative” from “stable” due to delays in the construction of the expressway extension.
In an interview, UEM-MARA Philippines President and Chief Executive Officer Jennifer E. Bote told BusinessWorld only guard rails and other safety accessories needed to be installed to make the Zapote-Kawit segment fully operational.
“It’s already more than 90% complete. You still need guard rails, fences, and basics for road safety,” Ms. Bote said.
The project, which started in 1998, was expected to be completed in 2008, however, right-of-way acquisition and weather conditions affected the construction, Ms. Bote said.
“Weather conditions really affected the construction especially because the extension is being built on reclaimed land,” Ms. Bote said.
The original budget for the project was pegged at P4.9 billion, but the total project cost reached P5.5 billion, Ms. Bote said.
The project was funded by the company’s internal cash and internally generated funds, and through a P3.5-billion loan facility obtained from local banks, Ms. Bote said.
On Tuesday, Moody’s said the R1 Extension Expressway Segment 4 of Coastal Road was not expected to bring in toll revenues until May, three months behind schedule.
Moody’s said UEM-MARA’s offshore financing vehicle, Manila Cavite Toll Road (MCTR) Finance Co., had indicated that the longest of the project’s six bridges was completed in December and asphalting along the main stretch of the road started in January.
Moody’s assigned a “B2” rating to the Coastal Road project on Aug. 30, 2010 in connection with MCTR’s issuance of 12-year bonds. Moody’s described MCTR as a “single-purpose company incorporated in the Cayman Islands, with limited liability.”
MCTR has around $160 million in debts, the credit watchdog said.
UEM-MARA Philippines, which is led by businessman Luis J. L. Virata, is wholly owned by Coastal Road Corp., with rights under a toll road concession to design, finance, construct, and operate the Manila Cavite Toll Expressway, including the existing R-1 Expressway and R-1 Extension.
The Coastal Road concession runs for 35 years up to October 2033.
The toll road concession arrangements are under the state-owned Philippine Reclamation Authority, supervised by the Toll Regulatory Board.
In a text message, Julius G. Corpuz, Toll Regulatory Board spokesman, said toll rates for the extension will be P22 for Class 1 vehicles like jeepneys, pick-up vans and cars; P44 for Class 2 vehicles like buses; and P65 for Class 3 vehicles like cargo trucks and trailers.
Mr. Corpuz said there was no application for a toll fee increase for the project. -- Kathleen A. Martin
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