Ayala, Sy groups team up for P25-B elevated toll road

THE Ayala and Sy families are teaming up for the development of a P25-billion elevated toll road that will link the SM Mall of Asia complex in Pasay City to Sta. Mesa, Manila through the Makati central business district.

Ayala Corp. and SM Investments Corp., through their wholly owned subsidiaries, submitted a joint unsolicited proposal to the Department of Public Works and Highways (DWPH) to build the 8.6-kilometer, four-lane Circumferential Road 3 (C3) Expressway, the conglomerates said in separate disclosures to the stock exchange on Friday.

The unsolicited proposal has a concession period of 35 years and covers the design, financing, construction, operation, and maintenance of the tollway.

The C3 Expressway is expected to get the approval of the National Economic and Development Authority (NEDA) Investment Coordination Committee in the second quarter of 2018, AC Infrastructure President and CEO Jose Rene D. Almendras in a briefing on Friday.

The new tollway will be designed to have a capacity of 100,000 vehicles moving at 60 kilometers per hour (kph) and will be completed in three years.

Both parties have reached out to San Miguel Corp. (SMC) to join the consortium for the project, which has also attracted the interest of other local and foreign companies, Mr. Almendras said.

“We have no decision from them (SMC) yet. They are still evaluating,” Mr. Almendras said.

The project will have five interchanges located in Sta. Mesa, Ayala’s Circuit Makati project, Ayala-Gil Puyat Avenues, Roxas Boulevard, and the SM Mall of Asia Complex.

The proposed toll road is seen reducing traffic congestion along EDSA, the country’s main thoroughfare. It will also provide an alternative route from Pasay and Makati to the cities of Mandaluyong, San Juan and Manila.

The C3 Expressway was initiated by SM, which was looking for a way to improve the accessibility of its projects in the Manila Bay area, Mr. Almendras said.

“If you need to go to Makati (from Mall of Asia) without passing through EDSA, this is the way to go,” Mr. Almendras said, noting that the tollway will reduce travel time by 75%.

The SM Mall of Asia complex is the flagship development of SM Prime Holdings, Inc., the real estate arm of SM Investments. Located along Manila Bay, the 60-hectare reclaimed land is home to one of SM Prime’s biggest shopping mall, office buildings, residential condominiums, hotel, arena, and a church.

“We don’t mind forging partnerships as long as it makes sense for business,” SM Senior Vice-President for Investor Relations Cora P. Guidote said in a telephone interview.

The project is subject to a Swiss challenge — the course the government takes when dealing with unsolicited proposals, which requires an invitation to make competing offers while giving the original proponent the right to match them.

This is not the first time that both conglomerates will be partnering for a project.

Fierce competitors in the areas of banking and real estate, the Sy and Ayala families have decided to work on more projects together following a decision to jointly manage and develop the Ortigas family’s OCLP Holdings, Inc. in November 2014 after a legal row that lasted two years.

In 2015, SM Prime and Ayala Land, Inc. teamed up with Megaworld Corp. and Aboitiz Equity Ventures, Inc. to form Trident Infrastructure and Development Corp. in vying for the P122.8-billion Laguna Lakeshore Expressway Dike Project — one of the biggest infrastructure projects the Aquino administration has rolled out to date.

A consortium of SM Prime and Ayala Land also won in 2015 the bid to develop a portion of the South Road Properties in Cebu. — Krista Angela M. Montealegre and Imee Charlee C. Delavin