The state-owned Bases Conversion and Development Authority (BCDA) declared last 24 February 2010 a failure of bidding for the Selection of a Private Sector Partner (PSP) for the privatization of the Subic-Clark-Tarlac Expressway (SCTEX) after lone eligible bidder Manila North Tollways Corporation (MNTC) did not submit a protest to challenge an earlier BCDA decision that denied  MNTC’s request to reconsider MNTC’s financial bid as complying, thus ending the bidding process.

 Under the Terms of Reference (TOR) for the bidding, MNTC was given  until 18 February 2010 to file such a protest, but instead, the MNTC, in a letter to  the BCDA  dated 17 February 2010, manifested its willingness and readiness  to enter into negotiations.

 The BCDA shall now enter into negotiations with MNTC pursuant to the TOR, existing rules and regulations governing public bidding and government transactions.

 It would be recalled that two bidders namely MNTC and Northlink Toll Management, Inc. (Northlink),  an incorporated joint venture between San Miguel Corporation (SMC) and Star Tollways Corporation (STC),  submitted bids last 4 January 2010 for the Selection of BCDA's Private Sector Partner for the Management, Operations and Maintenance of the SCTEX. Furthermore, the TOR requires that a bidder is required to pass all eligibility requirements as well as the technical requirements to be declared an “eligible” bidder.

 Northlink,  was declared “ineligible”  primarily because  of a fatal flaw in its technical proposal where Northlink indicated that “Periodic Maintenance, Special/Major/Emergency, Other Additional Works, Enhancements and or Improvement Works” are for ‘Owners’ Account. This violates the TOR which requires that all expenses for Maintenance, Operations and Management shall be for the account of the private sector operator and not for the account of BCDA, the owner of the SCTEX. Also, there were some incomplete eligibility documents in Northlink’s submission. BCDA subsequently denied Northlink’s Request for Reconsideration and protest on the declaration of Northlink’s ineligibility.

 On the other hand, BCDA declared MNTC “eligible” having passed all eligibility and technical requirements, after verification and clarification. However, the financial bid of MNTC which was opened last  25 January 2010 did not comply with BCDA's minimum requirements under the TOR. MNTC’s financial bid was declared as “failed/non-complying” due to the following violations: shortfalls in the payment of the semi-annual lease/concession fee; failure to commit that the lease/concession fee will be secured by a letter of credit; and a conditional payment by MNTC of the value-added-tax (VAT) and creditable withholding tax, among others.

 MNTC filed on 01 February 2010 their Request for Reconsideration  on the declaration of their Financial Proposal as  failed/non-complying. BCDA subsequently denied last 11 February 2010 MNTC’s Request for Reconsideration.

 BCDA President and CEO Gen. Narciso L. Abaya (Ret) stated that the bidding process undertaken so far and the negotiations to be undertaken with MNTC are all intended to obtain for the government the most advantageous terms and conditions for the lease/concession, management, operation and maintenance of SCTEX. Abaya assured that negotiations shall be transparent as the results thereof shall be disclosed to the public.