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Subic-Clark tollway project stalls on 'procedural lapses'
Jennifer A. Ng, Business World (20 Jul 2004)

MANILA, PHILIPPINES: The Cabinet-level Investment Coordination Committee of the National Economic and Development Authority (NEDA) yesterday stopped the Bases Conversion Development Authority (BCDA) from starting work on the PhP27-billion Subic-Clark-Tarlac Expressway Project.

Socioeconomic Planning Secretary Romulo L. Neri, NEDA director-general, said the BCDA bidding for the project was void because of procedural lapses. Among others, BCDA failed to get NEDA approval for changes in project design, he said.

"The NEDA-ICC Cabinet committee noted some procedural lapses...which invalidated the bidding process, because it's technically a new project. So the decision was to ask [BCDA] to resubmit the project under the new scope," Mr. Neri said.

Among the changes noted by the NEDA-ICC are those relating to project cost and project redesign because of right-of-way problems.

The project involves the construction, operation and maintenance of two major toll roads: the Subic-Clark Toll Road (Package 1) and the Sta. Ines, Mabalacat-Tarlac section of the North Luzon Tollway Extension (Package 2).

Mr. Neri said the Japan Bank for International Cooperation (JBIC) would put up about 85% of the project cost, BCDA the remaining 15% as counterpart funding.

Original project cost was PhP15.7 billion, as approved by the NEDA Board in October 1999. But BCDA asked NEDA to adjust the project cost to PhP18.7 billion because of changes in the design and scope of the project, based on the appraisal of JBIC. The NEDA Board approved the higher project cost in April 2001.

Mr. Neri said BCDA has encountered problems since then and has thus changed the scope of the project. "There were changes in scope since then for several reasons. One is the change from concrete to asphalt and second, they had to bypass the link to the North Tollway because of some potential right-of-way problems. So they had to redesign the road," Mr. Neri said.

From the PhP18.74 billion approved by NEDA in 2001, Mr. Neri said BCDA sought approval for a 46% increase to PhP27.4 billion in project cost.

The increase was reportedly sought because of foreign currency adjustments and the increase in the cost of materials.

"What was bid out was a project with a new design and the NEDA-ICC noted that [BCDA] should have first gotten [its] clearance before bidding it out," he said.

Mr. Neri also said the invitation to bid and the issuance of bid documents for Package 2 of the project were done in September last year, while bidding for Package 1 was done a month after that. He said the lowest bid was close to PhP30 billion, higher than the PhP27 billion being quoted by BCDA.

Source: Business World

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