INSTEAD of spending millions of pesos to fight an arbitration case in Switzerland, the government wants to arrange a settlement with Metro Pacific Investments Corp. (MPIC) for its P3-billion claim due to the Toll Regulatory Board’s (TRB) continued refusal to implement tariff adjustments since 2012.
TRB Consultant Alberto H. Suansing said the government agency is currently reviewing the arbitration case filed against it, and has referred the matter to the Office of the Secretary General.
“Further discussions will ensue and we’ll try to see if a settlement can be arranged,” he told reporters on Friday, noting the settlement will depend on the demands of the aggrieved party.
Manila North Tollways Corp. sought in April the intervention of an arbitration court for the settlement of roughly P3 billion in foregone toll revenues due to the government’s inaction to petitions for adjustments of the expressway operator.
The toll regulator has not acted on the company’s two petitions for the rate increase for the North Luzon Expressway (Nlex), one filed in 2012, and another filed in 2014.
The first petition was supposed to take effect on the first of January 2013. The second one, submitted on September 30, 2014, would bring the cumulative toll-rate adjustment to 15 percent, of which 12 percent is long overdue.
The concession that the Manuel V. Pangilinan-controlled company holds allows for toll adjustments every two years.
Current fees at the thoroughfare (from Mindanao Avenue to Santa Ines) amount to P218 for Class 1 vehicles (cars, jeepneys, pickup trucks and vans); P544 for Class 2 vehicles (two-axle trucks, buses and vans); and P652 for Class 3 vehicles (trucks and trailers with three or more axles).
“We are still drafting a suitable solution for the matter, of course, this should be able to conform with our supplemental toll operations agreement. It should also conform to the ruling of the Supreme Court and acceptable to the general public. What we are trying to avoid is paying more than what we should pay for,” Suansing said.
He explained that the settlement has “something to do with the general operation, volume and other factors.”
“The decision of the Supreme Court on the Francisco case shows that the solution should be just and reasonable. The determination of these two factors is something that has to be drafted, and has to conform with the law,” Suansing noted.
Suansing was referring to the case filed by Ernesto B. Francisco Jr. and Jose Ma. O. Hizon in 2007, wherein the two individuals sought to nullify toll-rate adjustments for South Metro Manila Skyway, Nlex and South Luzon Expressway.
The High Court in 2010 decided to order the regulator to review the rates, and concluded that toll adjustments must be “just and reasonable.”
The consultant lamented that this case could be inherited by the next administration, as arbitration cases take quite a long time to resolve.
“But it depends on the next administration on how they will take it. It will become a political issue. However, we hope that this could be settled peacefully without too much cost,” he said.
Sought for comment, Metro Pacific Tollways Corp. President Rodrigo E. Franco said his group is open to a settlement.
“Of course, we are open to a settlement. After all, it’s the very rationale for filing an arbitration case. We are also open to being paid in tranches,” he told the BusinessMirror. “However, they would still need to adjust the toll rates.”
Aside from this case, the infrastructure conglomerate has filed another claim case on foregone revenues of the Manila-Cavite Toll Expressway (Cavitex) to the tune of P877 million.
For the Cavitex, the company is seeking a 25-percent increase in tariff, as its last increase was given in 2011. It was supposed to implement adjustments in 2014, as its contract with the government allows for such surges.
In absolute terms, the petition for a rate hike for Cavitex are as follows:
- Class 1 vehicles, including cars, jeepneys, pickup trucks and vans, to P27 from P22;
- Class 2 vehicles, including two-axle trucks, buses and vans, to P54 from P44; and,
- Class 3 vehicles, including trucks and trailers with three or more axles, to P81 from P66.
The Pangilinan group is the largest toll-road operator in the Philippines. It also has significant shareholdings in expressways in Vietnam and Thailand, and is scouting for prospects in Indonesia and Malaysia.