Olongapo SubicBay BatangGapo Newscenter

Friday, June 10, 2005

First Holdings to bid for 94-km Subic-Clark expressway project

By Zinnia Dela Peña The Philippine Star 06/10/2005

The Lopez-owned First Philippine Holdings Corp. (FPHC) plans to bid for the 94.5-kilometer Subic-Clark expressway project under the Bases Conversion Development Authority (BCDA), a top company official said.

At the sidelines of the company’s stockholders meeting yesterday, FPHC president Elpidio Ibanez said they are prepared to bid for the road project to leverage on the strength of its involvement in the North Luzon expressway or NLEX.

Ibanez said the company is just waiting for the terms of reference of the estimated $500-million expressway project prior to submitting a bid. The terms of reference are expected to come out in the third quarter.

"We will study the terms of reference and if we think it’s still attractive then we will bid. We’re interested in operating it," Ibanez said.

The completion of the Subic-Clark expressway is seen to provide impetus for new businesses, industries and tourism to develop the rest of Luzon. It will link not only the seaport facilities in Subic and the Diosdado Macapagal International Airport and logistics facilities in Clark but provide access to the other major economic players in the region.

The project is expected to be completed in July 2007.

Funding for the project is provided through an Y41.931-million soft loan from the Japan Bank for International Cooperation (JBIC).

FPHC is the power and infrastructure investment unit of Benpres Holdings Corp. and the parent of Manila Electric Co. (Meralco), the country’s largest power distributor.

FPHC reported a net income of P3.3 billion last year, mainly coming from its power generation business. It did not provide a comparative figure but based on its 2003 annual report, FPHC posted a net profit of P3.82 billion in that year.

The lower profit was due to provisions made by Meralco, in which FPHC holds a 17.7 percent stake. FPHC’s share of the provision amounted to P1.2 billion. Without the provision, FPHC’s profit would have grown 18 percent to P4.5 billion.

Among the company’s subsidiaries are First Generation Holdings Corp. in which FPHC holds 88.44 percent interest and First Philippine Infrastructure Development Corp. (38 percent).

For this year, FPHC is confident its net profit will grow 10 to 15 percent, banking on higher contributions from its power distribution and tollways businesses.

Power generation is expected to contribute between 75 percent and 80 percent of FPHC’s earnings this year, slightly lower than in past years when the business contributed as much as 90 percent.

FPHC is not planning any major capital expenditure for this year, with no big projects in the pipeline.

Although it lost in the bidding for 600-megawatt Masinloc coal-fired power station of state utility National Power Corp., FPHC remains interested in Napocor’s asset sale.

The government has been trying to sell Napocor’s generation and transmission assets valued at P280 billion to help pay off the ailing state utility’s debts.

This year, FPHC will start servicing its debt, which now stands at $85 million


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