Mendoza, Defensor sold Skyway operations in an onerous deal with foreign investor

Skyway workers continue their fight beyond the labor issue and urge Ma. Theresa Defensor, President and CEO of the Philippine National Construction Corp. (PNCC) and sister of former Cabinet Secretary Mike Defensor, to resign for signing an onerous agreement that will give a foreign investor a golden deal with guaranteed windfall profits at the expense of the government’s and the public’s interests.

Jose Apollo Ado, President of the PNCC Skyway Employees Union reveals to the media that the PNCC through Defensor, the Tariff Regulator Board (TRB) and the foreign investor, CITRA Metro Manila Tollways Corp. secretly signed the Amendment to the Supplemental Tollway Operation Agreement (ASTOA) on July 18, 2007. Two days later, July 20, 2007, the agreement was approved by Malacañang through Department of Transportation and Communication Secretary Leandro Mendoza.

“Why would the government agree to such an onerous deal? Why did the government allow Citra to take over the Skyway when PNCC Skyway was clearly running the whole thing profitably? They said this was just a regular business deal but nothing is farther from the truth,” said Ado.

Ado said Defensor for PNCC, Josefa Aquino for PNCC Skyway (PSC) and Nadiya Stamboel for CITRA signed a Memorandum of Agreement on December 21, 2007 that paved the way for the turnover of Skyway operations and maintenance to another company on January 1, 2008.

“Skyway O & M Corporation (SOMCO) was hurriedly formed by CITRA on December 13, 2007 just before the MOA was signed. The transfer of Skyway to SOMCO, being a new entity of less than one month of existence and with no proven track record of experience in toll operations, would result in the poor delivery of toll services and higher toll fee rates to recoup possible losses as a result of inexperience,” said Ado

The MOA indicated that SOMCO will pay PSC P320 million for the “peaceful and seamless turnover of Skyway operations and maintenance.”

“This is grossly unfair because PSC is valued at P619 million as of the end of 2006. The track record of SOMCO is certainly no match compared to the 10-year experience of PSC which has been earning profitably and consistently from its operations,” said Ado.

SOMCO is taking over the operations of Skyway without the Toll Operation Certificate (TOC) from the TRB as indicated in the MOA.

The ASTOA obtained by union also revealed that CITRA, through its subsidiary, SOMCO, will now be able to raise the toll rates on an annual basis rather than the previous practice of once every 2 years. It will be allowed to trim down the rate differential between the elevated and at-grade (ground level) portions of the Skyway to “encourage” more motorists to use the elevated portion. The union said this would result to at least 150% toll rate increase for the ground level portion.

The union has asked the House of Representatives and the Senate to conduct a congressional investigation of the agreement even as the union seeks for the accountability of Secretary Mendoza and Ms Defensor for signing the agreement that will put the government coffers on the line as a result of sovereign guarantees provided for the private investors.

“CITRA’s and SOMCO’s profits are delivered in a silver platter as they enjoy government guarantees for compensation should annual toll rate increases are not implemented for whatever reason. As if that was not enough, CITRA also enjoys government protection against possible losses due to foreign exchange fluctuations,” said Ado.

PSCEU is the rank and file union in Skyway. It is an affiliate of the Workers Solidarity Network (WSN), which in turn is affiliated to the Alliance of Progressive Labor (APL).

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