Author Topic: Regulators eye NLEx toll cut, cite peso appreciation  (Read 783 times)

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Regulators eye NLEx toll cut, cite peso appreciation
« on: March 03, 2008, 02:12:27 AM »


The government is looking at ordering reduced tolls at the North Luzon Expressway (NLEx) given the strengthening peso, but the highway’s operator claims its contract does not allow for such.

The Supplemental Toll Operations Agreement (STOA) for the 84-kilometer expressway, said Toll Regulatory Board (TRB) spokesperson Julius G. Corpuz, provides for an interim toll adjustment in the case of a significant foreign exchange movement.

"[The contract provides that] an interim adjustment may occur if the peso depreciates by over 10% and if the inflation goes up by 15%, but in this case (a peso appreciation), the principle of interim adjustment is also applicable," Mr. Corpuz said.

He declined to say by how much tolls could be reduced nor when this would be implemented. Under the STOA, the next regular rate adjustment should be in January next year.

The current rate for class 1 or light vehicles using the Balintawak, Quezon City to Marilao, Bulacan stretch is P38, with P2.20 added per kilometer onwards to Sta. Ines, Pampanga.

"The TRB Board has already instructed the management to find the best way to possibly reduce fees in NLEx in view of the strengthening peso," Mr. Corpuz said.

But Jose P. de Jesus, president and chief executive of NLEx concessionaire Manila North Tollways Corp. (MNTC), said the interim rate reduction is not provided for in the STOA.

"There is no provision for the interim rate reduction, only for a rate increase. The regular review will happen in September or October this year and any rate adjustment should only happen January next year," he said in a phone interview.

Mr. De Jesus warned that an interim rate cut could be considered a breach of a "binding contract"

"Investors and lenders put their money based on an agreement. If this agreement is not kept, it puts doubt on the government’s ability to protect investments," he said.

Mr. De Jesus also said a toll cut would also reduce the budget that MNTC allots for the operation and maintenance of NLEx, leading to a reduction in the quality of its service.

Mr. Corpuz, meanwhile, said the impact of any reduction would be minimal due to rising inflation.

"The 20% strengthening of the peso is somehow mitigated by the inflation rate, which has gone up this year," he said.

Earlier this month, Provincial Bus Operators Association of the Philippines (PBOAP) called on the Lopez-led MNTC to reduce toll fees because of the strengthening peso.

"There’s an interim foreign exchange adjustment that should be invoked," PBOAP president Homer A. Mercado said in Filipino.

He raised the prospect of a "transport holiday" — which could paralyze traffic to and from the northern part of Luzon — if the TRB does not order tolls cut.

The militant transport group Pagkakaisa ng mga Samahan ng Tsuper at Opereytor Nationwide (Piston) has expressed support.

"It is very unfair to the public transport operators and private motorists to be paying high toll fees while the value of the dollar is going down," Piston said. — M. G. S. Ramos, BusinessWorld

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