Under Duterte administration MVP hopes toll, water tariff issues to be resolved

MANILA, Philippines – The group of corporate tycoon Manuel V. Pangilinan is set to seek reasonable solutions from incoming president Rodrigo Duterte to solve the prevailing regulatory issues that its tollways and water businesses are currently mired in.

“Any business group will have to determine how to work within a new environment. Everybody’s got to plan. You just need to do what you have to do that would bring in value for the company, its shareholders and the country,” Pangilinan told reporters on the sidelines of the annual stockholders meeting of Metro Pacific Investments Corp. (MPIC).

MPIC president and chief executive officer Jose Ma. Lim said the group would present reasonable solutions to resolve the arbitration issues.

“We would really like to end this arbitration and it would really send a signal to the business community. If businessmen are uncertain about his (Duterte) plans for business, this is the perfect opportunity for him to allay the fears of those businessmen by just settling it. We will be reasonable with our solutions,” Lim said.

MPIC’s tollway arm Metro Pacific Tollways Corp. continues to await approval of inflation adjustments for the North Luzon Expressway (NLEX) and six years for the Manila-Cavite Toll Expressway (Cavitex), equivalent to 19 percent and 23 percent, respectively.

MPTC operates NLEX and Cavitex via Manila North Tollways Corp. (MNTC) and Cavitex Infrastructure Corp. (CIC), respectively.

“These tariff adjustments have accumulated through successive failures to raise tariffs since 2011 and are now constraining MPTC’s ability to finance road construction necessary for continued economic growth,” MPIC said in an earlier disclosure.

For its water utility business Maynilad Water Services Inc.,

MPIC is claiming P3.44 billion after the Metropolitan Waterworks and Sewerage System Regulatory Office (MWSS-RO) failed to implement a water rate increase in favor of the company.

The group also expressed hopes the incoming administration would continue to prioritize the development of infrastructure projects in the country.

“The infrastructure situation in the Philippines is something the next administration intends to prioritize. Since private sector participation continues to be needed, we believe that an early settlement by government of outstanding tariff claims from the industry would send a strong signal for consistency in the regulatory environment and encourage participation in the private sector,” Lim said.

He said a rational solution to all this would be excellent for both the country and the regulated companies.

“For the country, the returns inherent in bids for infrastructure projects would likely go down given lower regulatory risk and more participants. For concession holders, the increased cash-flow from existing operations would reduce dependency on credit to fund new projects,” Lim said.