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4-Traders Homepage  >  Shares  >  PHILIPPINE STOCK EXCHANGE, INC.  >  Ayala Corporation    AC   PHY0486V1154

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San Miguel : A businessman's take on the economy

08/24/2015 | 12:01am US/Eastern

WHAT makes the excitement of the tycoons more exciting is their boldness and aggressiveness in seeking opportunities even outside their core businesses.

San Miguel Corp. (SMC), which built up a conglomerate of food, beverage and packaging businesses, is now into energy, infrastructure, mining and telecommunications. Ayala Corp., probably the country's oldest financial group, has long diversified into property, but is also now in energy, infrastructure and transportation industries.

What we are seeing in the business sector, particularly in the past several years, is a lot aggressive moves being made by the big business players. The excitement is not just in the retail business, but also in megaprojects that will drive the economy for a long time.

The government continues to implement road building and other infrastructure projects, but the private sector is playing a larger role now. By larger, I mean it is also investing its own capital, instead of just doing a project and collecting payment from the government. This reduces the pressure on the government to raise funding for every infrastructure project, and, at the same time, increases the money available to make a project come true. More money means more projects could be undertaken within a shorter period of time.

The best example of the larger role that big business is playing in infrastructure development is the Public-Private Partnership (PPP) Program, which was launched in 2010.

To date, 12 PPP projects have been awarded, and several of them have been completed. These are as follows:

Muntinlupa-Cavite Expressway Project. The P2-billion, 4-kilometer Muntinlupa-Cavite Expressway, which opened on July 21, links the South Expressway with Cavite, Las Pinas and Muntinlupa. It was the first PPP project and was won by Ayala Corp.

PPP for School Infrastructure Project (PSIP) Phase I.

Ninoy Aquino International Airport Expressway Project (Phase II). The P15.96-billion project won by SMC involves the construction of a four-lane, 7.75-km elevated expressway that will link the Ninoy Aquino International Airport with the Skyway, Manila-Cavite Expresway, Macapagal and Roxas Boulevards, including Philippine Amusement and Gaming Corp. City.


Modernization of Philippine Orthopedic Center.

Automatic Fare Collection System. The P1.72-billion deal to develop and operate a common ticketing system for elevated railways in Metro Manila, which was won by a consortium between Ayala and Metro Pacific Corp., is now operational.

Mactan-Cebu International Airport Passenger Terminal Building.

Light Rail Transit Line 1 Cavite Extension and Operation and Maintenance. This is a solicited project awarded to Light Rail Manila Corp, a consortium composed of Ayala Corp., Metro Pacific Light Rail Corp. and Macquarie Infrastructure Holdings. The project, estimated to cost P64.9 billion, will extend the existing LRT Line 1 from Baclaran station to Bacoor, Cavite, a distance of about 11.7 km.

Southwest Integrated Transport System Project. Ayala Land, which was declared early this month as the winner in the bidding for this project, will receive a 35-year concession to build and operate the Integrated Transport System South Project, as well as the commercial facilities in the 5.57-hectare former Food Terminal Inc. in October 2017.

Cavite-Laguna Expressway. The P55.51-billion project awarded to MPCALA Holdings Inc. involves the construction and operation of a four-lane, 44.63-km expressway connecting Cavitex and South Luzon Expressway (Slex), starting from Kawit, Cavite, and ending in Binan, Laguna.

Nlex-Slex Connector Road. The P26.66-billion project awarded to Citra Central Expressway Corp. is a 14.82-km, six-lane elevated toll road intended to

connect the Slex at Alabang to Balintawak in Quezon City, which is the beginning of the North Luzon Expressway (Nlex).

Metro Rail Transit Line 7. The project involves the financing, design, construction, operation and maintenance of a 23-km elevated railway line with 14 stations from San Jose Del Monte, Bulacan to Metro Rail Transit 3 North Avenue in Quezon City and a 22-km asphalt road from Bocaue Interchange of the Nlex to the intermodal terminal in Tala. The P69.3-billion project was awarded to Universal LRT Corp., a company controlled by SMC.

SMC also built the Tarlac-Pangasinan-La Union Expressway, which, among other benefits, has shortened travel time between Metro Manila and Baguio, a clear example of what good infrastructure can do, even for the lifestyle of the people.

Meanwhile, the government continues to sound off the private sector on other PPP projects, which should build up the momentum for more partnerships. Earlier this month, for example, the government said it was finalizing the details for the proposed P170-billion Bicol Express railway project, as well as the P3.5-billion upgrading of the Naga Airport runway.

Obviously, these and other projects that will be put up for bidding until 2015 will not be completed under the current administration, but the excitement of the tycoons and the benefits resulting from PPP and other infrastructure projects should encourage, if not compel, succeeding administrations to pursue the same track.

(c) 2015 Business Mirror Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

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