ASEAN KEY DESTINATIONS
PCC approves joint venture between BCDA and Malaysia’s MTD Capital
The Philippine Competition Commission has approved the joint venture between the Bases Conversion and Development Authority (BCDA) and Malaysia-based MTD Capital Berhad.
The antitrust watchdog approved the joint venture in a decision dated March 13, 2018. The joint venture would eventually operate the National Government Administrative Center (NGAC).
“The acquisition by proposed joint venture between Bases Conversion and Development Authority and MTD Capital Bhd. does not result in a substantial lessening of competition in the provision of construction services in the National Government Administrative Center,” according to the decision.
The government center will rise at the Clark Special Economic Zone (CSEZ), a special economic zone under the jurisdiction of the BCDA and covering lands occupied by Clark military reservations and extensions in Pampanga.
The BCDA will own 10 percent of the joint venture, with MTD Capital owning 90 percent.
“BCDA shall contribute to the JV its development and usufructuary rights over 40 hectares of the project site for Phase 1A, which is assumed to have an equivalent value of 10 percent of the total project cost,” the PCC said.
The total project cost for Phase 1A is estimated at P13.160 million, with the development and construction of Phase 1B to be determined in accordance with BCDA rules.
BCDA will allow the government center project to use its land for 25 years, but will retain full ownership.
MTD Capital will finance, design, build, and develop the infrastructure, facilities, and improvements comprising the government center.
The Malaysian partner will contribute P8.510 billion in cash to construct facilities, P4.185 billion in cash as equity capital, and any additional amount of cash to maintain its 90 percent interest.
The BCDA and its partner will share in the profits from the lease and purchase payments and from the operation and management of the NGAC based on the respective monetary values of their interests in the joint venture.
PCC Chairman Arsenio Balisacan and Commissioners Johannes Benjamin Bernabe, Stella Luz Quimbo, and Amabelle Asuncion approved the joint venutre
“This decision is rendered based solely on the facts and circumstances of the transaction disclosed by Bases Conversion Development Authority and MTD Capital Bhd,” the PCC noted.
The PCC is mandated to review all mergers and acquisitions worth P2 billion and above to ensure that no anti-competitive behavior would emerge as a result of the transaction.
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