MANILA -- A planned auction for the Philippines' largest-ever public-private partnership project failed to materialize Monday, with none of the three qualified bidders submitting an offer. The development has dealt a blow to President Benigno Aquino's efforts to cement his legacy as an infrastructure developer.
San Miguel tendered a bid minutes before the 2 p.m. deadline but later withdrew it.
"I have nothing to say except that it's a failed bid," said Ariel Angeles, officer in charge of PPP Service at the Department of Public Works and Highways.
The DPWH is the agency in charge of the $2.7 billion project to build a six-lane expressway on a 47km flood-control dike along Laguna Lake, south of Manila. The winning bidder would own the project's concession rights for 37 years, including the seven-year construction period. The project is intended to ease vehicular traffic and enhance connectivity in the southern part of the capital and nearby provinces.
A representative of San Miguel declined to comment on the company's withdrawal.
"Frankly, from an economic viability perspective and risk allocation perspective, we found that the government would not provide [a] concession agreement that addressed all these concerns of the private sector," said Roman Azanza, Aboitiz Equity's first vice-president for business development.
A consortium led by Malaysia's Alloy MTD Capital and South Korea's Hanshin Engineering & Construction cited legal concerns. In a letter it sent to the DPWH's bidding committee, the group said the absence of a presidential proclamation, certification from the Philippine Reclamation Authority and endorsement from local municipalities make the bidding process "illegal."
Apart from constructing an expressway dike, the project also includes the reclamation of 700 hectares of land on the west side of the road.
With a little more than a month before the national elections on May 9, the project may no longer be pursued under the watch of Aquino, who has laid out a $20 billion program for public-private infrastructure projects. Also, the Philippines' history of scrapping projects whenever a new leader takes office bodes ill for the deal.
For the dike project, "I doubt if we can do another bid [under] this administration," PPP Center Executive Director Andre Palacios said. "We are hopeful that the next administration can pick up where this admission will leave."