Controversy Over MPTC’s P2.5 Billion Buyout Offer for CAVITEX

The Public Estates Authority Tollways Corp. (PEATC), a government-operated entity, has openly criticized the P2.5 billion offer from Metro Pacific Tollways Corp. (MPTC) to buy out the government’s stake in the Manila-Cavite Expressway (CAVITEX). The buyout proposal has sparked controversy, particularly because CAVITEX reportedly earns over P2 billion annually, making the offer seem considerably undervalued.

PEATC’s officer-in-charge, Dioscoro Esteban Jr., expressed skepticism about the logic behind accepting such an offer, especially given the expressway’s high revenue. Esteban’s remarks underscore a broader concern about the fairness of the deal to the government and taxpayers. The state-run firm is advocating for a reevaluation of the current revenue sharing scheme, which disproportionately favors CIC, the MPTC subsidiary managing the tollway.

Currently, CIC enjoys a 90-10 revenue sharing agreement with the government, which PEATC argues should have shifted to a 60-40 split in favor of the government when the original operations and maintenance agreement expired in 2021. This imbalance, according to PEATC, results in a significant annual revenue loss for the government, estimated at around P1 billion.

PEATC has taken legal action, filing a petition for mandamus to assert its right to manage the toll operations, and is also pushing for a public bidding process for the expressway to potentially secure a more advantageous deal. Esteban suggests that a competitive bidding could attract offers substantially higher than what MPTC has proposed, hinting at possible bids reaching up to P100 billion.

The Department of Finance has expressed openness to MPTC’s proposal, but this stance may be reviewed as discussions continue. MPTC defends its position by highlighting its ongoing investments in the expansion and maintenance of CAVITEX, including the construction of additional links and extensions under the agreement terms.

As tensions mount, the resolution of this dispute will require careful consideration of both the financial valuation and strategic importance of CAVITEX, ensuring decisions align with public interest and fair economic practices.