Manila North Tollways Corp. accepted the condition of the government to reduce the toll for the proposed expressway linking North Luzon Expressway and South Luzon Expressway.
MNTC president Rodrigo Franco said in a text message the company, which operates NLEx, accepted the lower internal rate of return for the new expressway that would cut through Caloocan City and Manila.
The lower IRR for NLEx-SLEx connector road was the condition set by the board of the National Economic and Development Authority to approve the Swiss Challenge for the project.
The Neda board in December asked MNTC, the original proponent, to reduce the IRR to 10.87 percent from 12.09 percent, by lowering the opening tariff from P100 to P87.
“Yes, we have accepted [the lower IRR],” Franco said.
The Neda board subsequently approved the NLEx-SLEx connector project under the unsolicited mode, subject to a Swiss Challenge.
Public Works Secretary Rogelio Singson earlier said the agency would publish the Swiss Challenge this month.
The project involves the construction of an eight-kilometer, four-lane toll road that would pass through Metro Manila along the existing Philippine National Railways alignment.
The Public Works Department will implement the project, which has a total estimated cost of P23.2 billion and a concession period of 35 years.
Citra Metro Manila Tollways Corp., which is separately constructing the P26.7-billion Skyway Stage 3 Project, will build the five-kilometer common alignment from Polytechnic University of the Philippines in Sta. Mesa, Manila to Buendia in Makati City of the NLEx-SLEx project.
MNTC, which operates NLEx, sealed a joint venture with Philippine National Construction Corp. in a bid to facilitate construction of the NLEx-SLEx connector.
Other MNTC shareholders are Egis Projects S.A. of France, Leighton Asia Ltd. of Australia and PNCC, which holds the franchise to run the expressway.
The government decided to subject the project to a Swiss challenge after the Justice Department issued a legal opinion, saying the Neda board’s decision to implement the project as a joint venture was “without factual basis or jurisdiction.”
The joint-venture route aimed to do away with the Swiss challenge, which was required of the project when it was still being pursued as an unsolicited venture.
MNTC reported a net income of P2.22 billon in the January-September period, up 22 percent from P1.82 billion a year ago, mainly due to high traffic growth and toll revenues generated during the period.
MNTC’s revenues in the nine-month period grew 10 percent to P6.04 billion from P5.47 billion last year as average daily traffic hit 199,196, up 9 percent in 2014.