Higher SLEx toll rates may take effect next week

MANILA, Philippines—The South Luzon Tollways Corp. (SLTC) will implement the increased toll rates at the South Luzon Expressway (SLEx) by next week or early November following the Supreme Court ruling lifting the restraining order against the toll operator’s proposed new rates.

“If there are no more hindrances, we just need to reprogram our computers… then we can charge the new rates,” said SLTC president Isaac David.

He said being able to increase the toll at SLEx would stanch the company’s financial losses which have reached nearly P1 billion in the past two months.

“We have been delayed with our payments to our creditors,” David said, adding that the company was close to defaulting on its loans.

In a decision released late Thursday, the high court declared as valid and constitutional the supplemental toll operation agreement (STOA) covering the Luzon Tollway Project between the government and SLEx, as well as the Toll Regulatory Board (TRB) resolutions allowing the rate increases.

The toll hikes were supposed to have been implemented last June 30, the last day of the previous Arroyo administration.

But the high court issued a restraining order two days before the new toll rates were supposed to be implemented.

Waiting to be green lighted

According to David, the company will be able to adjust toll rates about three to four days after getting the green light from the TRB, which was ordered by the court to conduct a final review of the approved rates.

The TRB board is expected to meet by the middle of next week, so SLEx expects to get the approval by next Thursday.

The SLTC was only allowed to collect toll at SLEx last April, after it completed the first two phases of its rehabilitation of the road. The company said it spent P12 billion for these two phases, which cover the rehabilitation of the Alabang viaduct and the widening of the highway.

The SLTC holds the 30-year concession to operate SLEx, to expire in 2036. It is authorized to collect toll to ensure that it gets a 17-percent return on investment every year.

The company, which is backed by Malaysia’s MTD Capital, earlier decided to push back the implementation of the new toll rate, which is 250-percent higher than the current rate, as a sign of respect for the then-incoming Aquino administration, only for the high court to issue a restraining order against it.

David said the delays have cost SLTC at least P6 million in losses every day. The company’s losses in foregone revenue is now estimated at P800 million to P1 billion.

David said the company was still studying whether or not it would ask the government to compensate SLTC for the delay.

“Our board will have to decide on it but our bankers are expecting us to do that because we have to pay them,” he said.

VAT entirely separate issue

The Supreme Court on Friday explained that the decision lifting the temporary restraining order on the toll increase did not cover the separate issue of the value-added tax (VAT) that the government wants to implement as well.

“This decision has nothing to do with VAT. That is an entirely separate case,” said Supreme Court spokesperson and court administrator Jose Midas Marquez.

The high court last August issued a temporary restraining order against a government plan to impose the 12-percent VAT on toll rates in superhighways that was to be implemented on Aug. 16.

Former Nueva Ecija congressman Renato Diaz and Aurora Ma. Timbol, a former trade and industry official, filed the petition against the VAT plan, arguing that imposing the VAT on toll rates was “unconstitutional” and an “invasion of legislative powers.”

Also toll hike in NLEx

Marquez also explained that in the high court decision promulgated late Thursday on the SLEx toll hike, the tribunal also lifted the TRO on the toll rate hike in the North Luzon Expressway (NLEx) and the South Metro Manila Skyway (SMMS).

The court also ruled that the various supplemental toll operation agreements (STOA) between the government—through the TRB and the Philippine National Construction Corp. (PNCC)—and private corporations were “all valid and constitutional except for some provisions.”

The decision lifting the TRO and declaring the questioned provisions in the STOA constitutional “gives all operators the green light to impose these new toll fees,” Marquez said.

“Even if these concerns are remanded to the TRB for review, it doesn’t necessarily mean that the toll operators are prevented from imposing these new rates. The rates can be implemented pending review of the TRB,” he explained, adding that nothing also prevents the public from further questioning the rates before the TRB.

4 cases consolidated

The high court issued a unanimous decision on the four consolidated cases questioning the legality of the STOAs and the increase in toll rates in the expressways.

The consolidated cases were those filed by lawyers Ernesto Francisco and Jose Ma. Hizon against the TRB, PNCC, et al.; former Rep. Imee Marcos, Ronaldo Zamora et al. against the TRB, Manila North Tollways Corp., PNCC and the First Philippine Infrastructure Development Corp.; Gising Kabataan Movement et al. against the TRB and the PNCC; and TRB against the Young Professionals and Entrepreneurs of San Pedro, Laguna.

‘Ruling favors investors’

Francisco said he would “definitely” file a motion for reconsideration of the decision.

He believes that since the decision was not yet final, the SLEx toll-rate increase should not yet be implemented.

“The SLTC has to explain and justify the increase in the SLEx project cost from P8.5 billion for 4 toll roads from Alabang, Muntinlupa, to Lucena, Quezon, to P12 billion for 3 toll roads from Alabang, Muntinlupa, to Sto. Tomas, Batangas, or about P26.26 billion for 4 toll roads from Alabang, Muntinlupa, to Lucena, Quezon,” Francisco said.

“Sad to say, this Supreme Court decision will haunt us in the coming years as these tollway companies—which are owned by foreigners (Indonesians and Malaysians)—will impose on Filipino motorists toll rate increases every 2 to 3 years in the next 25 years using a formula of the TRB which is designed to favor the investors,” he said.

Supplemental petition

He also said he was “surprised” at the decision dismissing his petition questioning the contracts entered into by the government with the expressway operators because he had just received an order from the high court directing him to file his comment on the SLTC’s urgent motion to lift the temporary restraining order.

“Besides, there are respondents which have yet to file their comments on my supplemental petition as directed by the Supreme Court,” he said.

Paolo Montecillo & Nikko Dizon, Phil. Daily Inquirer