DOF Considers MPTC’s Proposal for Complete Takeover of CAVITEX

The Department of Finance (DOF) is currently evaluating a proposal from Metro Pacific Tollways Corp. (MPTC) to buy out the government’s stake in the Manila-Cavite Expressway (CAVITEX). This proposal aims to fully privatize the expressway, currently managed as a joint venture between MPTC’s subsidiary, Cavitex Infrastructure Corp. (CIC), and the Philippine Reclamation Authority (PRA) via its unit, the Public Estates Authority Tollways Corp. (PEATC).

Finance Undersecretary for Privatization and Partnerships, Catherine Fong, noted that while the DOF is open to exploring the possibility, complications arise as the PRA, a key stakeholder in the joint venture, does not fall under the DOF’s jurisdiction. The current arrangement between CIC and PRA sees a 90-10 revenue sharing in favor of CIC, a point of contention leading PEATC to seek legal means to adjust this distribution.

The exploration by the DOF includes considering the financial aspects of the buyout alongside efficiency improvements that might follow privatization. However, the PRA’s primary role is not in managing tollways, suggesting that a valuation must consider the entire scope of implications for such a transaction.

This deliberation comes amid ongoing debates about the financial fairness of MPTC’s buyout offer and its strategic implications for the government’s involvement in infrastructure projects. The decision to privatize CAVITEX fully will hinge on a comprehensive assessment of both the economic benefits and the operational efficiencies it may bring.