Subic-Clark-Tarlac toll project probe sought

Judy T. Gulane, BusinessWorld (13 Aug 2004)

PHILIPPINES: A resolution in the House of Representatives has directed the Committee on Oversight to conduct an inquiry in aid of legislation into the "alleged overpricing" of the first portion Subic-Clark-Tarlac Expressway Project that will be undertaken by the Bases Conversion Development Authority (BCDA).

In House Resolution No. 95, Quezon Rep. Danilo E. Suarez, who is also the chairman of the Committee on Oversight, noted that the 41-kilometer Subic-Clark toll project -- the first portion of the 94.5-kilometer expressway project -- will cost a total of PhP13 billion, which means that it will cost PhP310 million per kilometer.

BCDA had approved an estimated project cost of PhP8 billion for the Subic-Clark toll project, he said, based on the figures supplied by three Japanese consultants -- Pacific Consultants, Inc., Nippon Koei and Katahira.

The lowest bid for this particular stretch of the expressway project, however, was PhP13 billion from the Hasama Construction Co. of Japan.
Mr. Suarez said the average road construction cost is between PhP35 to 50 million per kilometer for expressways with two lanes, and between PhP70 to 100 million per kilometer for expressways with four lanes. This makes the PhP13 billion Subic-Clark stretch essentially overpriced.

"(T)he PhP13 billion cost of the Subic-Clark Toll Project is more than one-half of the PhP21 billion facility that is expected to cover the cost of the entire 94.5 kilometer expressway," Mr. Suarez said in his resolution, "which leaves a mere PhP8 billion to construct the remaining 53.5 kilometers of the Subic-Clark-Tarlac Expressway."

"(T)his highly irregular and anomalous transaction, reminiscent of the two-lane Diosdado Macapagal Avenue in Manila's reclaimed area, which cost PhP75 million per kilometer, should be stopped as this is grossly disadvantageous to the government," he said.
Recently, the National Economic and Development Authority (NEDA) directed the BCDA to conduct another bidding for the Subic-Clark-Tarlac Expressway Project after its total project cost ballooned to PhP27 billion from the approved PhP18.74 billion.

The additional project cost was due to a redesign of the expressway, which essentially makes it a new project that needed rebidding, NEDA Director-General Romulo L. Neri had said.
A rebidding has to be made in order to avoid legal problems, such as the Supreme Court nullifying the contract, like in the case of Terminal 3 of the Ninoy Aquino International Airport.
NEDA's Investment Coordinating Committee will have to approve the new project design before the BCDA can call for new bids.

Once built, the Subic-Clark-Tarlac Expressway Project will be the country's longest. Package I of the project will extend from the Subic Freeport to the former Clark Air Base, while Package 2 will extend from Clark to the Hacienda Luisita in Tarlac.

The Japan Bank of International Cooperation will provide $315 million, or 85% of the total cost, for the project.