THE INSIDE MAN

SCTEx: Built against all odds

SCTEx: Built against all odds image

Tito F. Hermoso / Autoindustriya.com | September 05, 2017 16:31

How the SCTEx came to be, and how it almost fell through

BAC: Before the 1998 Asian Crisis

Twenty years is a long time for us car enthusiasts. The mid-nineties posed so much hope even if we only had a tenth of the high speed tollways that we take for granted today. We were making do with 2 brands that survived the PCMP 5+2. After the long economic crises of the Eighties, we were now getting used to seeing more brands from the People's Car category, the multi-brand importers of Pepito Alvarez and Elena Lim, Peter and Paul Rodriguez, Wellington Soong and the return of the pre-debacle mainstream brands.

The glimmer of hope in Subic

What titilated us were the relaxing of some customs rules in the port of Subic, the ex-USNavy base in Zambales. Pocholo Ramirez and sons were shoe-horning Subaru boxer engines into mid 70's FIAT Cinquecento's in his carrozeria in the middle of his baby, the SiR [Subic International Raceway]. But for me the real rough-cut gem was the Port of Subic itself. There, interesting pre-owned European cars that were trickling in from Japan: Peugeot 405, 309, 205, Alfa Romeo Guiletta's, FIAT Tipo, FIAT Coupe, Renault Clio, Citroen Bx, BMW 325's, and VW Golfs. With an explosion of more interesting alternatives to our Japanese staples, the next question then was, where do we drive to in these?

Hungry for highways, starved of funders

Since Subic port and Clark airport were looming large in the nation's economic future, what we needed was a network of new expressways, besides the crumbling NLEx and SLEx. The Skyway, a fresh new BOT was already being built. The STAR, another FVR BOT [Build-Operate-Transfer] flagship project, was inching its way south. This left us with the NLEx, which was barely surviving the onslaught of heavier trucks and slowly but tepidly overcoming the diminishing pyroclastic flows of Mt. Pinatubo. At least the ERAP administration tapped First Holdings of the Lopez group to kick-start the Tipo-Subic expressway.

Rufo's eureka moment

So why not BOT a limited access expressway between Subic and Clark? That was the question that BCDA Chair Rufo Colayco posed to himself, and later, the economic managers of the ERAP administration back in 1999. Underneath the rugged virgin terrain reprofiled by the Pinatubo eruption and succeeding lahar rampage, was a working Subic to Clark oil pipeline used by the US Armed Forces.Who knows, maybe as far back when the father of Gen. Douglas MacArthur headed the US Armed Forces stationed in the Commonwealth, the US had plans for a railway. Colayco's idea made sense even if one believes those urban legends of hardened silos for nuclear tipped ICBM's, hidden in the jungle mountains of Bataan.

Failing the [common] sense test

But as history would have it, Colayco's idea was met with stiff resistance from NEDA-ICC. They questioned the utility and profitability of a limited access tollway when there is already an Olongapo-Gapan highway. DPWH fortified its resistance by insisting on credible projections of 25,000 vehicles/day quota before an expressway would make sense. Meantime, what was lost to the high minded economists was the rising toll of road accident fatalities on the San Fernando-Olongapo stretch as surging import deliveries of ex-JDM SUV's converted to LHD [left-hand drive] now arriving in Subic were congesting Lubao and Dinalupihan. The Subic-Clark expressway would have died there and then when President ERAP sidelined Colayco.

BCDA's musical Chairs

With Babes Singson as the new BCDA Chair, Colayco's brainchild was resurrected and improved. Singson further explored ODA financing by JICA, who, in turn proposed that since there are many Japanese owned manufacturing locators at the Cojuangco family's vast Hacienda Luisita Industrial park in Tarlac, why not extend the Subic-Clark expressway to Tarlac? Indeed, why not? But Cory Cojuangco-Aquino's family thought otherwise and gave the SCTEx a hard time, thinking perhaps that come RROW [road right of way] expropriation, it would just be another bargain basement priced land grab enforcing the Government's right of eminent domain.

SCTEx: Built against all odds

No stopping it now

When ERAP was deposed and replaced by GMA, Colayco found himself back in the saddle of BCDA. Consequently he lost no time getting the project off the ground. The first segment, the original 50.5km Subic to Clark segment was to cost PHP15.73B. The 43.27km Clark-Tarlac segment was added and when completed, the project would have cost PHP 34.98B. Seventy eight per cent of this amount or PHP 23.06B was to be funded by the JBIC [Japan Bank for International Cooperation] and carries an interest rate of 0.95% per annum, 40 year term, 10 years grace period. BCDA shouldered the counterpart funding, the balance of 22.0%. Delayed by some 2 years by the change in President and by stern opposition by NEDA's Romy Neri, Colayco lost no time in pushing for the extension of the SCTEx into the TPLEx as far as Rosario, La Union. For this, he even got better terms from JICA at 0.50% per annum.

Now shovel ready

It was not until 2005, when the SCTEx started building, and not long after Colayco was again replaced as BCDA chair in 2004. The SCTEx was to be a feather in the GMA admin's cap, by now battered by allegations of unbridled corruption. With the Lopez group finally inaugurating a new, expanded and world class NLEx, BCDA was the next follow up, the next star in the pantheon of infrastructure achievers. Typical of ODA [official development assistance] loans, the lender reserved the right to choose the contractor and the specifications. A joint venture between Kajima, Obayashi, JFE Engineering, and Mitsubishi Heavy Industries contracted the Subic-Clark segment and Hazama,Taisei, and Nippon Steel were for the Clark-Tarlac segment. Project consultants were a joint venture between Oriental Consultant, Katahira & Engineering International, and Nippon Koei Co. Ltd. The longest expressway in the country was about to become a reality.

Like admin, like project

As a gigantic infrastructure undertaking, SCTEx suffered from sniping from an unusually large gallery of naysayers and oppositors. Beside the usual landowners complaining about compensation for land acquired as RROW, there were local government units who wanted an entry/exit to their town or didn't want the highway to barrel through either. Costs were climbing as the mountainous terrain between Subic and Clark, courtesy of the Pinatubo eruption, needed extensive civil works solutions – viaducts over gullies slicing through mountains [instead of tunneling], shot creting or installing gabion slope protection and curving the route to provide scenic vistas. Ditto for the soft foundation rice land/sugar land spanning the whole of the Tarlac portion, which was generally arrow straight.

Rumblings of controversy from the Private sector

The loudest oppositor to the SCTEx's contractors were from the big local construction conglomerates. It was already tough enough that only the Donor organization [JICA] could choose contractors, but the said Japanese contractors joint ventured with virtual unknowns, at least to the eyes and minds of the PCA [Phil. Contractors Assoc.]. Why the Japanese contractors chose to go with 2nd-tier construction outfits, prompted tongues wagging and whispering, rather loudly and indiscriminately, that corruption was rife and that their alleged lower price vis-a-vis better known contractors was tantamount to shoddy build quality. Nevertheless, by 2008, 9 years after inception and 3 years after construction commenced, the GMA administration was able to open the SCTEx to through traffic via three inaugurations from the 2nd to the third quarter. But there were still a good number of exits that still needed to be built and/or finished.

SCTEx: Built against all odds

TPLEx: sacrificial lamb/peace offering?

Essentially an extension of the SCTEx, TPLEx's birth in 2004 was just as tortured as the SCTEx. Despite the even better ODA loan terms negotiated by Colayco from JICA, the GMA administration handed over the TPLEx project to a private sector consortium of top tier construction companies which later became PIDC or Phil. Infra Development Corp., led by DM Consunji. Like SCTEx, TPLEx was supposed to blaze its own trail, taking off from SCTEx's northern most point at Tarlac City and following a northeasterly trajectory, skimming the western edge of Nueva Ecija before crossing the Bued River at Rosario, La Union. But lobbying mayors and congressmen of Tarlac and Pangasinan will have none of it. They arm-twisted the planners to follow what was the conceptual franchise route of Manila North Tollway's NLEx, along the central part of Tarlac, Pangasinan and La Union province, west of the Manila North Road or MacArthur Highway. This probably explains why under DPWH's highway classification, SCTEx from Tipo to Dolores is badged E-4 or Expressway 4, while Dolores, SCTEx to Rosario, TPLEx is labelled E-1, the expressway badge of NLEx. What would have been the NLEx northward trajectory to Rosario, La Union from Sta. Inez to Dolores was usurped by the SCTEx.

The going gets tough

TPLEx broke ground in 2010, during the final semester of the GMA administration. Dubbed as the country's first PPP [public private partnership] essentially a BOT with additional “London” features, there was to be no ODA financing from JICA. Instead, government was hoping for Lopez group's MNTC, the NLEx rebuilder and O&M franchise holder, to partner in building TPLEx but First Holding's had other plans. It divested its infrastructure companies to Metro Pacific Tollways. Hence PIDC shifted finance to a consortium of local universal banks charging commercial rates. Since financing wasn't going to come cheap, TPLEx was to be built in single carriageway stages with Phase 1 ending at Gerona, Tarlac. Owing to its “missionary” beginnings, just like SCTEx, PIDC was targeting hitting traffic of 25,000 vehicles a day before building the 2nd carriageway.

The [white] knight in shining armor

The entry of San Miguel Corporation into the Infrastructure sector in 2011 was to prove to be a huge boost to the fortunes of the 88.58km long TPLEx. Not only was Ramon S. Ang dissatisfied with the safety issues of a single carriageway expressway, he was also not in favor of taking 3 to 5 years to complete TPLEx. In fact, for San Miguel, TPLEx was to be the vehicle by which to extend the dual carriageway to San Fernando, La Union and eventually Pagudpud, Ilocos Norte. Buying into a big chunk of PIDC [and later buying out the rest of the owners] San Miguel proceeded to finance a turbocharged building schedule, inaugurating the first dual carriageway segment to Gerona in 2013. By 2016, TPLEx had already reached Binalonan. A conflict with 3 different alignments of the last section to the Bued viaduct and Rosario, La Union, caused considerable delays postponing completion to late 2018. Cong. Mark Cojuangco's proposed alignment veered far west, closer to San Fabian, adding 1.5kms. to TPLEx's length, avoiding expropriating rich arable land and terminating at Bgy. Caguintingan west of Rosario. This had the advantage of segregating north bound traffic from congesting Baguio bound traffic. But the Cordillera Administrative Region resisted this. In the end, the chosen alignment didn't veer too far from Pozzorubio, ending at Bgy. Subusob at the Rosario-Pugo 3-way junction along the Manila North Road.

SCTEx: finished or not finished?

The new Pnoy-Daang Matuwid administration's take over in 2010, re-introduced the trademark Aquino Inquisition of past infrastructure projects, studiously avoiding scrutiny of the few approvals under Pres. Cory. Like de ja vu, it was back to a distaste for unsolicited proposals while the new finance led team halted all on going projects. Post scrutiny, projects were either abrogated, revised, resubmitted, continued and in some cases where there was a threat of a lawsuit, just left in limbo. The Metro Pacific Tollways O&M [Operations and Maintenance] contract for SCTEx was one of them. Having delayed and deferred approval, GMA, practically handed over Metro Pac's O&M fate to the next administration. On orders of the Palace, the contract was first cancelled, then renegotiated several times over the first 4 years of the Pnoy administration. Then, by the 5th year, the DoF wanted to raise the price again, after which, it demanded a re-bid, to which there were no other bidders. This delay caused heavy damage to the SCTEx minimally maintained pavement. Additional bridge improvements to the Pasig-Potrero viaduct in order to avoid severe base erosion were postponed, resulting in the loss of 2-spans due to rushing waters induced by a typhoon in 2013. At least the advanced commissioning of Porac and Floridablanca exits were finished just before the Pnoy limbo set in. But the biggest damage to SCTEx efficiency was the failure of the Pnoy administration to approve the joint toll collection of NLEx and SCTEx, which would have eliminated stops at the Dau and Maybiga toll barriers. By Christmas season of 2015, Senate President Drilon and DoTC Secy. Abaya were stuck in 14-hour traffic jams, which led to the Senate President personally pushing the BCDA to allow NLEx-SCTEx joint collections and thus eliminate the toll barriers in 2016.

Comparing SCTEx and TPLEx

What would have been one 180.0km long world class dual carriage expressway, suggested in 1999 and begun work in 2005 would have finished in 2012 if only the government stuck to the original BCDA script of Rufo Colayco. With full backing of JICA, the SCTEx and SCTEx extension nee TPLEx project would have fit into PRRD's preference for ODA funded infrastructure with O&M by PPP. It is also a lesson to regulators to think out of the box, prioritize “customer” [tax paying public] convenience even at the cost of subsidizing “missionary” projects rather than studiously oppose anything new as impossible or beyond the realm of narrowly focused out-dated criteria. The long tortured route of the SCTEx shows how the NIMBY thinking of regulators block genuine progress. Akin to the way today's LTFRB is going hammer and tongs to suppress Apps based ride sharing and ride hailing.

Specification similarities

SCTEx and TPLEx varies from standard DPWH specifications. The standard DPWH specs are found on NLEx, SLEx, CAVITEx, STAR and most recently MC-x. They are as straight as possible and avoid sweeping curves that modern road builders introduce to avoid sleep inducing highway hypnosis. The RROW allow widening to up to 4 lanes per carriageway, plus emergency shoulder. Overpasses and slip roads have allowances for future 4x4 lane expansion. The relative narrowness of the SCTEx-TPLEx median will be familiar to those who toured Japan by motor coach. Japanese highways save on valuable real estate owing to the steep mountainous terrain that their expressways traverse. Their philosophy is if an expressway needs to expand, just build another expressway. One can find a practical application of this when traveling from Mt. Fuji to Tokyo. There one finds three parallel expressways – one clinging to the mountain side, one going through the back door of the coastal towns and cities and the third being a bayshore expressway, partly over water.

SCTEx: Built against all odds

Specification nuances

Besides sharing the same width, SCTEx and TPLEx varies in some applications of civil works technology and road furniture. With Nippon Steel as a joint venture contractor of the JICA funded SCTEx, it will not surprise to see a lot of ARMCo guard rails on the median and shoulders. At the TPLEx, the median is a reinforced concrete Jersey barrier, first seen on the revitalized Balintawak-Bocaue segment of NLEx. This has the added advantage of eliminating headlight glare from on-coming traffic, the bane of many misaligned headlights of the average [old] Philippine motor vehicle. TPLEx, where possible, also uses Freysinet reinforced concrete guard rails, last seen when the NLEx was extended from the Viaduct to Sta. Inez in 1981. Flyovers at TPLEx do not have any median columns, whereas SCTEx does. With center columns, SCTEx can keep road width to theoretically accommodate a third lane under its overpasses while TPLEx overpasses with their rammed earth ramps have no room for expansion.

The absence of a median pillar at TPLEx overpasses, affords wider views and offers no obstruction [nor concealment advantage] to the TPLEx Patrol's hand held LIDAR speed cameras. Upon turnover to Metro Pacific tollways, SCTEx did not have the DPWH mandated Vienna convention traffic signs while TPLEx had no such problem. SCTEx built the elevated viaduct above the Tipo and Pasig-Potrero gorges and the Sacobia viaduct over what used to be rampaging lahar's major route. TPLEx built viaducts over Agno and Binalonan rivers and is building one over the Bued river. While TPLEx has regular toll barriers on flat land, SCTEx's Maybiga/Mabalacat toll barrier was elevated over the Manila North Road and even incorporated a U-turn slot for traffic access to Manila North Road. This Maybiga toll plaza was decommissioned when NLEx and SCTEx integrated toll collections and is now being converted to a diamond interchange to eliminate the U-turn slot. To replace Maybiga, SCTEx had to build a new toll barrier at the Tarlac City end.

Making cost comparison difficult

In a previous column we quoted PIDS data on comparative costs per kilometer between TPLEx and SCTEx, to highlight the cost advantage of PPP vs. ODA funding. TPLEx at PHP284.0 million/km and SCTEx at PHP374,0 million/km. Build duration; SCTEx 7 years including 2 years in limbo. TPLEx 5 years. Toll cost PHP 1.50/km SCTEx, but due for adjustment since 2009. PHP 2.50/km TPLEx. On further research, we realized that these data were insufficient to arrive at a fair analysis.

Accounting conflicts

The cost of the SCTEx was pegged at PHP284.0 million per km, but bloated upward when CoA charged some PHP8.0B worth of administrative expenses on top of RROW acquisition. The Subic-Clark RROW was the easy part being only partly arable land but construction is more difficult in mountainous terrain. Even if the peso per sq. meter price of real estate was low, the engineering solutions were costly. Viaducts, slicing through mountains, shoring up cliffs from erosion and building super-sized above grade exits, with long access roads like Dinalupihan, Floridablanca and Porac cost far more than a regular sized interchange like Clark South, Concepcion and Hacienda Luisita. The Clark-Tarlac part, despite simpler construction on flat RROW was more difficult and expensive as it was already well know that the SCTEx was a priority project and LGU's along the way were lobbying for special favors, which drove up costs. Moreover, the SCTEx consultants specified spread footing flyover columns to deal with marshy ground in Tarlac instead of pre-fab piles and beams, adding to the time element. The Prime Mover advantage of SCTEx was in play when later RROW acquisitions for TPLEx were dealt at higher prices. The TPLEx, which was on relatively easy to build flat land, consisting of rice paddy or sugar cane plantation, would have not such a hard time so it was easy to stick to the projected PHP284.0M/km.

The birthing pains of a prime mover

It would be tempting to jump to a comparative conclusion between competing project funding/building methods: ODA vs. PPP. Debt ceiling busting Public or Sovereign Debt vs. Private Sector finance with the risk of “Crowding Out” other finance worthy projects. We've already outlined the difference in construction ease, the changed RROW pricing of any extension of the SCTEx now that the SCTEx is viable and the shift in ease/difficulty of finding Private Sector finance when infra became a hot topic. Rising costs were driven by local government politics, their revisions and resistance, not to mention typical hostile anti-expropriation actions such as snap rallies, blockades, burning contractor heavy equipment and stoning of toll paying motorists. In order to protect SCTEx's growing clientele, a military quick reaction team was assigned to SCTEx, ready to deploy.

TRB's toll rate, the ultimate deal maker/breaker

A major determinant in costing for a tollway, whether for purposes of attracting Private sector bidding to PPP or ensuring the tollway will never be under-invested in anything that it needs for world class standards, will always be the Toll Regulatory Board [TRB]'s mandated cost of toll charge per km. Whenever applicable, pre-planned toll charge increases should be automatically triggered whenever Peso-dollar exchange rate or heavy/light traffic flow or extra ordinary construction costs are incurred. These predictive toll charges must be balanced with the need to make the PPP a viable business proposition to the Private sector investor. Presuming tollways to be “missionary” in nature, ODA soft loans and long operation franchise tenures can allow for lower toll charges, while Private sector commercial borrowings will normally dictate higher toll charges or even longer O&M franchise tenures to give the road builder time to recoup its investment. To prevent problems with construction quality, both ODA lender and BCDA or project proponent should agree to a contractor accreditation standard so as not to avoid the animosity that it bred when SCTEx was built by 2nd tier contractors, chosen by the Japanese lenders. Still, considering the multi-faceted angles of computing for legitimate project expenses, we withhold judgment on cost comparisons as TPLEx still has to finish.

SCTEx: Built against all odds

Scenic values matter

Today, there is a plethora of new build expressways and infrastructure which promise to be as scenic as the SCTEx. With the Subic-Clark segment as a trailblazing benchmark, the natural beauty aspect is already being addressed at the design stage of NLEEx [Northeast Luzon Expwy], CLEx [Central Luzon Expwy], SLEx TR-4, CALAx, CAVITEx extension, STAR Tanauan to Tagaytay extension, Cebu-Cordova bridge and causeway expressway. 

A bright project packed future

Another lesson learned here is that one shouldn't pooh-pooh out-of-the box ideas as they could lead to better things. BCDA's Vince Dizon is bullish on many road, rail and airport related projects emanating from BGC, Clark Green City and Subic. But Dizon tempers heightened expectations of China's seeming infrastructure largesse with appropriate NEDA-ICC cost benefit studies. For instance, a Subic-Clark railway is pointless unless there is a Subic-Port of Manila railway if moving freight by rail is a priority in order to decongest roads. A Metro Manila Subway from BGC must always incorporate loops to Makati CBD, MOA and NAIA in order to relieve EDSA. BCDA will remain to be circumspect when it comes to other tollway proposals from foreign funded sources.

SCTEx: this is where it all began

Without the SCTEx playing prime mover - tolls, RROW acquisition and the all important threshold of 25,000 veh./day, notwithstanding – formidable economic linkages and benefits to Subic, Bataan, Clark, Tarlac, NLEx and TPLEx would not have congealed. The SCTEx introduced a new raison d'être for road building into the Philippine landscape; scenic tollways through difficult terrain, built to perform to a loss making missionary function need not stay missionary or loss making for long. Progress and development didn't take long to follow. Build it and they will come.