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Govt set to improve terms of Laguna dike

posted May 18, 2016 at 11:55 pm by Darwin G. Amojelar [ thestandard.com.ph]

The Public Works Department said it may remove the flood control component of the Laguna Lakeshore Expressway Dike project to make it more attractive to local and foreign firms.

“The DPWH will review the assumptions and the project’s risk profile, as well as the possibility of fully or partially undertaking the flood control component,” the agency said.

The Public Works Department said the bidding process on March 28 failed after qualified bidders did not submit offers, citing the project’s risk profile and complexity, especially the flood control component and its connectivity to C5, among others.

The three pre-qualified bidders—San Miguel Holdings Corp., Alloy Pavi Harshen LLEDP Consortium and Team Trident—did not submit any bid for the P122.8-billion LLED project.
Laguna Lakeshore Expressway Dike project

 


Team Trident is composed of Trident Infrastructure and Development Corp., Ayala Land Inc., Megaworld Corp., Aboitiz Equity Ventures Inc. and SM Prime Holdings Inc.

The Alloy-Pavi Hanshin LLEDP Consortium consists of Malaysia’s Alloy MTD Capital Berhad, Prime Asset Ventures Inc. and Hanshin Engineering Construction.

The three prospective bidders said the failed bidding was due to the lack of commercial viability of the project, which involves the construction of a flood control dike, a 47-kilometer, six-lane expressway on top of it and the reclamation of over 700 hectares of land for commercial development.

“The Laguna lakeshore project is just not feasible. Government will have to re-examine its assumptions and redesign a mutually beneficial contractual structure best suited for a deal as large and intricate as this one, given its potential to create opportunities that will generate the greatest benefit to a lot of people,” San Miguel Corp. president and chief operating officer Ramon Ang said in an earlier statement.

“This is probably the country’s largest and most complex PPP project to date and frankly, from an economic viability perspective and risk allocation perspective, we found that the government wouldn’t provide such concession agreement that addressed all these concerns of the private sector,”  Team Trident spokesman Roman Azanza III said.

“The most logical approach for us was not to proceed. We have to stop and really give credit to all the men and women in government, their advisers and our advisers including the years worth of effort into this really complex project. But the end of the day, of course, a viable solution could not be found for all parties concerned,” Azanza said.

The LLED project is the largest public-private partnership venture so far, involving the construction of a flood control dike, an expressway on top of it, and the reclamation of over 700 hectares of land for commercial development.

The LLED concession will last 37 years, including seven years for design and construction and 30 years for operation and maintenance.

It will be financed mainly by private capital with no government subsidy, except for right-of-way costs.
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