| Gov’t sets PPP auction EIGHTEEN COMPANIES, so far, have signified their interest to bid for the P1.956-billion Daang Hari-South Luzon Expressway (SLEx) link -- the government’s first public-private partnership (PPP) deal that may finally be auctioned off, on Dec. 28. "There are 18 bidders [sic] for the first [PPP deal]," Finance Secretary Cesar V. Purisima told reporters at the sidelines of the 3rd Corporate Treasury & CFO Summit Philippines held yesterday in Makati City. The Department of Public Works and Highways (DPWH), the agency implementing the project, invited investors to pre-qualify for the bidding last month. "There are 18 companies who have bought the invitation documents for Daang Hari," Public Works Secretary Rogelio L. Singson confirmed separately by phone. "The bidders are mostly local companies. Some of them already operate toll roads," Mr. Singson explained, citing Metro Pacific Tollways Corp. (MPTC), the operator of the North Luzon Expressway, and Citra Metro Manila Tollways Corp. (Citra), the operator of the South Metro Manila Skyway Project. DPWH yesterday released the preliminary list of companies that have bought bid documents, namely: Citra; China International Water & Electric Corp.; CM Pancho Construction Inc.; DM Consunji, Inc. (DMCI); EFC Enterprises; IL & FS Transportation Networks Ltd.; JD Legaspi Construction; Ayala Land construction arm Makati Development Corp.; Moldex Construction, Inc.; Sy-led Monte Oro Grid Resources Corp.; MPTC; Malaysia-based MTD Group; Ramon S. Ang-chaired Optimal Infrastructure Development, Inc.; R-II Builders, Inc.; South Luzon Tollways Corporation (SLTC); Star Infrastructure Development Corp.; UEM-MARA Philippines Corp.; and Vicente T. Lao Construction. MPTC President Ramoncito S. Fernandez confirmed via text yesterday that "Yes, MPTC bought bid documents." SLTC Spokesperson Christiaan S. Orlina also validated the report. "We bought the invitation documents because we feel that we are the best qualified to finance, design, construct, operate and maintain the Daang Hari," Mr. Orlina said by phone. DMCI Executive Vice-President Edilberto C. Palisoc, however, confirmed only the construction firm’s interest, saying via text, "Yes, we will purchase [the documents]." Interested parties can still purchase bid documents from the Central Procurement Office of the DPWH until Sept. 16 for a non-refundable fee of P50,000. All qualification documents have to be submitted by Sept. 19. A pre-bid conference will be held on Oct. 28. Interested investors must submit their formal bids to the DPWH by Dec. 28, the same day the bids will be opened, Mr. Singson said. The P1.956-billion project includes construction of a four-kilometer, four-lane paved toll road that will connect Bacoor, Cavite to the South Luzon Expressway. The road "will address the requirement for additional access between Metro Manila and Cavite where rapid urbanization and consequent worsening of traffic situation is being experienced," the project brief states. The project specifically consists of: • paying for advanced work completed by Alabang-Sto. Tomas Development, Inc. in 2009; • financing and construction of the remaining works for Segment I at the junction of Daang Hari and Daang Reyna; • financing, design and construction of Segment II at the Susana Heights Interchange; as well as • the operation and maintenance of the entire Daang Hari-SLEx Link Road as an open-system tolled expressway. The project will be implemented under a build-transfer-operate arrangement, whereby the private sector party will build the road and assume all construction-related risks. Once the facility is completed, the title will be transferred back to the DPWH. The private sector party will operate the highway on behalf of the government and will be authorized to collect toll from users. The DPWH will be responsible for toll-setting. The Daang Hari-SLEx link should have been the second PPP deal to be rolled out by the government, after the P15-billion operation and maintenance contract for the Light Rail Transit Line 1 and the Metro Rail Transit Line 3 was opened to investors in March. Bidding for that project had been scheduled for July 11. However, the PPP deal for the commuter train lines was shelved last month after a change of leadership at the Department of Transportation and Communications. The government has said it aims to auction off at least 10 PPP projects this year. VAT on toll to be collected by October Toll on all privately-run expressways are to rise by 12 percent on October 1 with the slapping of value-added tax (VAT) on their operations, according to a government announcement on Thursday. The move, which has been fiercely opposed by motorist and transport groups who expected the tax to be totally passed on to toll users, is expected to give the government an additional P2 billion a year in revenues to help keep state finances healthy. “The BIR (Bureau of Internal Revenue) in a meeting with toll road operators and the Toll Regulatory Board (TRB) agreed to impose VAT on toll on October 1,” the TRB said in a text message to reporters late Thursday. The implementation of the VAT was held back a month later than the original target of September 1, TRB Spokesperson Julius Corpuz said. “This is to give the toll operators ample time to prepare for a smooth implementation (of higher fees),” he said. Notices would be published in newspapers once the new rates for each highway were finalized, he added. The Department of Finance ordered the imposition of VAT on toll last year as it struggled to find new sources of income. The Supreme Court earlier issued an order temporarily restraining the imposition of VAT on tolls, but in a decision last month, sided with the government on the issue. |
| U.S. Stocks Rally as Profits, Drop in Jobless Claims Offset Europe Woes U.S. stocks rallied, reversing yesterday’s drop for the Standard & Poor’s 500 Index, as a decline in jobless claims and better-than-estimated corporate earnings tempered concern Europe’s debt crisis is worsening. All 10 groups in the S&P 500 advanced at least 2.5 percent, with gains being led by financial, energy and raw-material companies. Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM) rallied more than 6.7 percent, after plunging at least 5.5 percent yesterday. Cisco Systems Inc. (CSCO), the world’s largest maker of networking equipment, soared 16 percent, the most since May 2002, as profit and sales beat analysts’ estimates. The S&P 500 surged 4.6 percent to 1,172.64 at 4 p.m. in New York. The gauge had plunged as much as 18 percent from its 2011 high and yesterday traded at 12.3 times reported earnings, the lowest valuation since March 2009, according to data compiled by Bloomberg. The Dow Jones Industrial Average jumped 423.37 points, or 4 percent, to 11,143.31 today. U.S. 30-Year Bond Yield Rises Most Since 2008 on Concerns About Inflation Treasury 30-year bonds tumbled, pushing yields up the most since 2008, on speculation Federal Reserve policies will stoke inflation, which sapped demand at the $16 billion offering of the securities. The first auction of the debt since Standard & Poor’s cut the U.S. credit rating on Aug. 5 drew the lowest level of demand since February 2009. Today’s auction produced a yield of 3.750 percent, compared with the average forecast of 3.622 percent in a Bloomberg News survey of eight primary dealers. “People didn’t show up for this one,” said Scott Sherman, an interest-rate strategist in New York at Credit Suisse Group AG, one of the 20 primary dealers that are obligated to participate in U.S. auctions. “Increased worry about inflation has to get priced into the long bond, given the Fed’s accommodative stance. For now, there will be apprehension to buy that far out on the curve at these yield levels.” The current 30-year bond yield increased 25 basis points, or 0.25 percentage point, to 3.77 percent at 5:01 p.m. in New York, according to Bloomberg Bond Trader prices. The price of the 4.375 percent securities maturing in May 2041 dropped 5, or $50 per $1,000 face amount, to 110 25/32. The yield rose as much as 29 basis points, the most on an intraday basis since Nov. 21, 2008, when the S&P 500 Index soared 6.3 percent after falling to its lowest level in 11 years during a period of extreme volatility following the bankruptcy of Lehman Brothers Holdings Inc. |
| Crude Oil Declines, Heading for Third Weekly Drop, on Concern Over Economy Oil fell in New York, heading for a third week of declines, as concerns the U.S. economy is slowing countered an unexpected drop in unemployment benefits in the world’s biggest crude-consuming nation. Futures slipped as much as 0.4 percent today, the first drop in three days. Prices rose yesterday after the number of applications for U.S. unemployment payments fell 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April. Other reports showed consumer confidence fell and the trade gap widened in June to the highest level since October 2008. Crude for September delivery fell as much as 35 cents to $85.37 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.44 at 9:49 a.m. Sydney time. The contract yesterday gained 3.4 percent to $85.72. Prices are down 1.7 percent this week and 13 percent higher the past year. Brent oil for September settlement gained $1.34, or 1.3 percent, to $108.02 a barrel on the ICE Futures Europe exchange in London yesterday. The European benchmark contract settled at a premium of $22.30 to U.S. futures, compared with a record close of $23.79 on Aug. 10. |
Sources: Bloomberg, Reuters, www.inquirer.net, www.philstar.com, www.bworldonline.com, www.cnnmoney.com
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