Ayala leads Philippines’ PPPs

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Manila MRT
Track of Manila’s Mass Rapid Transit

The Ayala group and those teamed up under its consortiums are making strong inroads to grab the next two largest private-public partnerships (PPP) in the Philippines’ pipeline.

The AF Consortium, led by Ayala and Pangilinan-owned Metro Pacific, tops prequalified bidders for the $41-million Automatic Fare Collection System (AFCS) project, designed to introduce an automated ticketing system for Manila’s Metro Rail Transit (MRT) and Light Rail Transit (LRT) rail lines, already widely used elsewhere in the region. Manuel Pangilinan is the Chairman of Philippine Long Distance Telephone Company, the largest company in the country by market capitialisation.

In addition to the AFCS bidding spot, announced by the Transportation Department on May 8, Ayala is also a frontrunner for a project to expand the Mactan-Cebu International Airport, the Philippines’ second busiest.

Teaming up with Aboitiz, a business dynasty hailing from Cebu, Ayala will bid for a $419-million contract to construct a passenger terminal that has a capacity of 8 million passengers annually – this time, however, with much steeper competition. The Philippines’ most wealthy families and businessman are also in the race to acquire the airport expansion contract, including the Gokongwei, Pangilinan, Gotianun, Tan, Sy and Lopez groups.

As the race heats up , there has been some flip-flopping of alliances as other heavyweights try to give themselves a competitive advantage against the large and entrenched Ayala conglomerate. The Gotianun-led Filinvest consortium, for example, has partnered with Changi Airports International, which is operated by Temasek Holdings, Singapore’s sovereign wealth fund. This partnership has since sent shockwaves through the business community because Temasek already has a 47.3 per cent interest in Ayala-owned Globe Telecom, creating a possible conflict of interest. However, Aquino’s cabinet has given the nod to Changi Airport Group, expressing the government’s desire to work with the Singapore group and effectively blindsiding a ban on bidders who have existing interests.

Yet Ayala remains the most potent force, even when in same pond teems with other powerful business lunkers. In Ayala and Aboitiz’s bid for the Mactan-Cebu International Airport, the consortium has recruited global airport operator ADC & HAS Airports of the US, a company which includes a portfolio of airports similar to Cebu, such as those in Quito, Ecuador; San Jose, Costa Rica; Liberia, Costa Rica; and in Chungcheong Northern Province in South Korea.

Furthermore, in its AFCS bid, Ayala has tapped Octopus Transactions Ltd, the operator of Hong Kong’s successful Octopus commuter card system, as well as Accenture, which will contribute the global consultancy’s project management expertise to the fold.

The Ayala group has already bagged one out of three of the PPP projects awarded since the Aquino administration took office, the $151-million Daang Hari-SLEX Connector road project in Metro Manila, which has gone through some delays due to revisions submitted by the group. According to the PPP Center Executive Director Cossette Canilao, there has been debate over who should now shoulder the cost of the revisions – Ayala of the Transportation Department.

The Ayalas are a business family that date back to colonial rule, when the Spanish and German Ayala, Zobel and Roxas families were united. Ayala Corporation, the parent company, was worth $2.9 billion in 2012.

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Reading Time: 2 minutes

Track of Manila’s Mass Rapid Transit

The Ayala group and those teamed up under its consortiums are making strong inroads to grab the next two largest private-public partnerships (PPP) in the Philippines’ pipeline.

Reading Time: 2 minutes

Manila MRT
Track of Manila’s Mass Rapid Transit

The Ayala group and those teamed up under its consortiums are making strong inroads to grab the next two largest private-public partnerships (PPP) in the Philippines’ pipeline.

The AF Consortium, led by Ayala and Pangilinan-owned Metro Pacific, tops prequalified bidders for the $41-million Automatic Fare Collection System (AFCS) project, designed to introduce an automated ticketing system for Manila’s Metro Rail Transit (MRT) and Light Rail Transit (LRT) rail lines, already widely used elsewhere in the region. Manuel Pangilinan is the Chairman of Philippine Long Distance Telephone Company, the largest company in the country by market capitialisation.

In addition to the AFCS bidding spot, announced by the Transportation Department on May 8, Ayala is also a frontrunner for a project to expand the Mactan-Cebu International Airport, the Philippines’ second busiest.

Teaming up with Aboitiz, a business dynasty hailing from Cebu, Ayala will bid for a $419-million contract to construct a passenger terminal that has a capacity of 8 million passengers annually – this time, however, with much steeper competition. The Philippines’ most wealthy families and businessman are also in the race to acquire the airport expansion contract, including the Gokongwei, Pangilinan, Gotianun, Tan, Sy and Lopez groups.

As the race heats up , there has been some flip-flopping of alliances as other heavyweights try to give themselves a competitive advantage against the large and entrenched Ayala conglomerate. The Gotianun-led Filinvest consortium, for example, has partnered with Changi Airports International, which is operated by Temasek Holdings, Singapore’s sovereign wealth fund. This partnership has since sent shockwaves through the business community because Temasek already has a 47.3 per cent interest in Ayala-owned Globe Telecom, creating a possible conflict of interest. However, Aquino’s cabinet has given the nod to Changi Airport Group, expressing the government’s desire to work with the Singapore group and effectively blindsiding a ban on bidders who have existing interests.

Yet Ayala remains the most potent force, even when in same pond teems with other powerful business lunkers. In Ayala and Aboitiz’s bid for the Mactan-Cebu International Airport, the consortium has recruited global airport operator ADC & HAS Airports of the US, a company which includes a portfolio of airports similar to Cebu, such as those in Quito, Ecuador; San Jose, Costa Rica; Liberia, Costa Rica; and in Chungcheong Northern Province in South Korea.

Furthermore, in its AFCS bid, Ayala has tapped Octopus Transactions Ltd, the operator of Hong Kong’s successful Octopus commuter card system, as well as Accenture, which will contribute the global consultancy’s project management expertise to the fold.

The Ayala group has already bagged one out of three of the PPP projects awarded since the Aquino administration took office, the $151-million Daang Hari-SLEX Connector road project in Metro Manila, which has gone through some delays due to revisions submitted by the group. According to the PPP Center Executive Director Cossette Canilao, there has been debate over who should now shoulder the cost of the revisions – Ayala of the Transportation Department.

The Ayalas are a business family that date back to colonial rule, when the Spanish and German Ayala, Zobel and Roxas families were united. Ayala Corporation, the parent company, was worth $2.9 billion in 2012.

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