Manila-Cavite tollway

active

In September 1995, a BOT contract for the construction and operation of a 25.5km toll road between Manila and Cavite was awarded to the Manila-Cavite Toll Road joint venture. The project was to be undertaken by UEM-MARA Philippines Corp. (UMPC), a subsidiary of United Engineers Malaysia (UEM) (90%) in which Majlis Amanah Rakyat (MARA), also Malaysian, had a 10% stake. A privately owned Filipino compay, Coastal Road Corporation subsequently bought out UEM and MARA's shares in UMPC. The Manila-Cavite Tollway project was to include three phases. Phase one involved the upgrade of the existing 6.6 km R-1 expressway, known as Coastal Road. Phase two involved the construction of the 11.3 km R-1 extension from Zapote to Noveleta. Phase two was to be carried out in two sections: a 7 km section from Zapote to Kawit, known as Segment 4, and a 4.3 km section from Kawit to Noveleta, known as Segment 5. Phase three involved the construction of the 7.5 km C-5 link connecting the R-1 expressway with the South Luzon Expressway. In May 2003, UEM-MARA Philippines Corp. (UMPC), the project company, and IFC inked a memorandum of understanding signifying IFC's intent to provide financing amounting to US$70 million for phase two of the project. IFC approved this loan in September 2003 but cancelled it on Nov. 23, 2004, citing UMPC's failure to find a strategic foreign equity partner to join the project. In August 2006, UMPC secured a US$71 million syndicated term loan facility to finance Segment 4 of the project. Development Bank of the Philippines and BDO Capital and Investment Corp. were joint arrangers of the loan facility while the other facility members were Chinabank, Equitable PCI Bank and UnionBank. The loan facility was payable in eight years, including a grace period of two and a half years. It was be priced every six months at MART 1 rates. In addition to this debt financing, UMPC announced its commitment of US$31 million in equity financing for Segment 4. Phase one of the project became operational in 2000. Construction of Segment 4 was 39% complete as of May 31, 2008, and was expected to be fully complete in 2010. The P3.5 billion loan facility that closed in 2006 was converted to US$71 million using the IMF IFS' 2006 annual average exchange rate of US$1 = P49.132. The P1.5 billion equity commitment of 2006 was converted to US$31 million using the same method.