THE cost to build a third Mactan-Cebu bridge has grown from P17 billion to P27.9 billion and this would not do the public good.
So said the legal officer of the Department of Public Works and Highways (DPWH) 7 as he cautioned the agency on the increase of the project cost to be “grossly excessive and detrimental to public interest.”
From the original project cost of P17 billion when it was first proposed to the government in 2014, the project cost now stands at P27.9 billion due to capitalized interest and inflation adjustment, according to the proponent, the Metro Pacific Tollways Development Corp. (MPTDC).
In his legal opinion on the implementation of the Cebu Cordova Bridge Infrastructure Project, DPWH 7 regional legal chief Brando Raya said the increase in the total project cost by P10 billion will be the basis for the amount of toll that will be collected from motorists who will use the bridge.
“In other words, it is the public who will ultimately shoulder this increase while the said money will go to the pockets of private individuals,” Raya said.
This is contrary to the principle that the toll to be shouldered by the public “must be commensurate to the actual cost of the project, given a reasonable rate of return on the part of the investors,” he said.
In the legal opinion that Raya submitted to Regional Director Ador Canlas last May 8, he cited the case of Francisco versus Toll Regulatory Board stating that any increase in the toll due to inflation, among others, “must comply with the legal twin requirements of publication and public hearing.”
PPP deal
in August 2014, MPTDC, a subsidiary of Metro Pacific Investment Corp. (MPIC), submitted to the Cebu City Government and Municipality of Cordova its unsolicited proposal to build, under the build-operate-and-transfer (BOT) scheme, the third bridge linking Cebu City and Mactan Island.
Subsequently, the Cordova Municipal Government entered into a joint venture agreement and Public-Private Partnership (PPP) with MPTDC, pursuant to Section 35 of the Local government Code, which gives local government units (LGUs) power to enter into joint ventures.
The proposed bridge will span eight kilometers from the mouth of the Guadalupe River to Shell Island and then Cordova. The project includes the construction of a toll plaza and causeway.
The project cost also includes acquisition of the road right of way and beautification of the Guadalupe River easement where one of the approaches of the bridge will be built.
MPTC, a subsidiary of the Metro Pacific Investments Corp., offered to build and operate the bridge. The Municipal Government of Cordova and Cebu City Government will get a share of the toll collected from bridge users.
Metro Pacific presented the proposal to the Cebu City Council and said that the project would cost P16.5 billion at no cost to the City Government except for the road-right-of-way. The management will turn it over to the LGUs concerned after 35 years.
Cordova Mayor Adelino Sitoy said the joint venture between Cordova and Metro Pacific is based on a PPP scheme and is legally binding.
P55 or P100 toll
Sitoy said that on the part of the government, the advantages of the project is that the LGUs will not spend public funds for the bridge and that the toll will still be P55 per car and P110 per truck even if the estimated cost increased from P17 billion to P27.9 billion.
Also, the public will have a choice whether to use the third bridge and pay the toll or use the two existing bridges for free.
Raya said notices of award were issued by the City of Cebu and the Municipality of Cordova in favor of MPTDC after the Dec. 7, 2015 deadline to submit comparative proposals lapsed without any challenger.
But like other BOT projects, Raya said he noticed that the land where the bridge components will stand has been completely ignored, despite the fact that it is the most valuable asset in a tollway facility.
“As regards the tollways in Metro Manila, the value of the road infrastructure is way below compared to the value of the land, and such gap gets even wider as the years go by since the value of improvements depreciate while the value of the land almost always appreciates,” Raya said in his memorandum to Canlas.
“This results to an absurd situation wherein the users of the facility are asked to pay rentals for the ‘use’ of the facility, but whose owner is granted the right to possess the land upon which said facility stands, rent-free,” Raya said.