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“Hopefully, this [Calax rebid] will be the sole exception,” Peter Angelo B. Perfecto, executive director of the Makati Business Club (MBC), told the BusinessMirror.

The MBC earlier echoed the concern of local and foreign business chambers that holding another auction for the Calax project—when it was already won by the consortium of Ayala Corp. and Aboitiz Group in a fair bidding—will erode the confidence of the private sector in the Aquino administration’s PPP Program.

On Monday the National Economic and Development Authority (Neda) Board, chaired by President Aquino, approved the rebidding of the Calax project, setting a new P20.1-billion minimum bid price for the premium payment.

“I believe our position and our concerns remain the same as our official statement,” Perfecto said.

There was an apparent softening in the group’s stand, however, as Perfecto said: “I believe that there remains still a level of confidence that the government will roll out more PPPs without such similar issues.”

This is a welcome remark for Malacañang, which expressed confidence that the business sector will also get to appreciate the wisdom of President Aquino’s decision.

“Rebidding is based on legal grounds that can stand scrutiny,” Communications Secretary Herminio B. Coloma told the BusinessMirror. “We believe this will allow the government to maximize the economic gains from the project.”

The Ayala-Aboitiz consortium won the initial bidding for the project with an P11.6-billion tender last year.

But Mr. Aquino decided to scrap the result of the first bidding and reauction the Calax project after the winning bidder, Team Orion of the Ayala-Aboitiz, and the losing bidder, San Miguel Corp.’s Optimal Infrastructure Development Inc. (Oidi), which offered a higher P20.105-billion premium payment, assured they would not go to court if the project is rebid.

San Miguel infrastructure arm was disqualified from the first bidding due to an alleged defective bid security, which was said to be four days short of the required cover period. But Oidi petitioned Malacañang to reconsider its offer.

Initially indicating his inclination to rebid the project, President Aquino then cited foregone revenues from San Miguel’s offer of P20 billion if the government accepts the winning bid of P11 billion tendered by Team Orion.

At the annual Foreign Correspondents Association of the Philippines Forum last October 22, Mr. Aquino admitted he was “inclined” to rebid, saying he would have some explaining to do if he foregoes the P9-billion difference that could bankroll other government projects.

“Anyway, ’yung Calax, what is the fundamental issue there? In the bid documents submitted and the portion, which is more or less a template, San Miguel [position] is…there was a typographical error of parang a lack of four days in the bid security document. The DPWH asked for a clarification—a clarification by the ANZ Bank [Australia and New Zealand Banking Group]—and San Miguel, itself, stated that their bid security was good for 180 days as opposed to 176,” Mr. Aquino recalled.

Mr. Aquino added that “allegedly…the bid documents were returned to San Miguel and they opened it up before the media. They said that their bid would have been over P20 billion, if I remember it correctly, versus the winning bid of about P11 billion. Now, if we accept the winning bid at this time when there is an allegation that there was a much superior bid, then we will have to explain to the people the P9-billion difference that we forego. We get the infrastructure; we get a premium of P20 billion allegedly from one bid, or an P11-billion premium from another bid. Now, at the end of the day, we have to protect the people’s interests.”

Before this, the MBC, American Chamber of Commerce of the Philippines, Australian-New Zealand Chamber of Commerce Philippines, Canadian Chamber of Commerce of the Philippines, Employers Confederation of the Philippines, European Chamber of Commerce of the Philippines, Japanese Chamber of Commerce and Industry of the Philippines Inc., and the Management Association of the Philippines had issued a joint statement seeking to dissuade President Aquino from ordering a rebidding of the Calax project.

“While the PPP Program encountered some difficulties in its initial stages, it has since begun to catch up, with high-impact projects being steadily rolled out, catching the attention of domestic and international investors. It is imperative that this pipeline be clear of any blockages and inconsistencies if we are to protect the credibility of this program and our procurement system as a whole. In light of this, the proposed rebidding of the Cavite-Laguna Expressway would be an inopportune and ill-advised decision that would surely have a negative impact on our improving standing in the investor community,” the joint statement read.

It asserted that the Department of Public Works and Highways had conducted the bidding of the Calax with “complete transparency and fairness” and in full compliance with the build-operate-transfer (BOT) law, thus, rebidding the project would have no legal basis.

“We share the concern of our colleagues in the private sector that a disregard of the present rules through a rebid will adversely impact investor confidence in the PPP Program and in our bidding procedures…. Thus, we call on the government to remain consistent with the provisions of the BOT law, not just in this particular case but also for the other projects in the pipeline,” the business groups’ statement added.

Asked if the government has plans or incentives lined up to regain business confidence in joining future PPP biddings, the outcome of which could also be rebid, Coloma expressed optimism that the Aquino administration can retain investors’ trust based on its track record.

“Business confidence is sustained by our investment grade rating, sound macroeconomic fundamentals and good governance,” Coloma said.

Source: Business Mirror