Kudos to Gatchalian, boos to Salim

I SALUTE Valenzuela City Mayor Rex Gatchalian for doing his job and demonstrating what political will can do.

With traffic at the North Luzon Expressway (NLEx) in the first week of December creating a hell-on-earth for more than half a million Filipinos, he cleverly did what he could do within his jurisdiction. He suspended the business license of NLEX Corp. to operate in Valenzuela City, where it has seven toll stations.

With that kind of leadership ability, Gatchalian, just 41 years old, could — or should — be president someday.

No permit, no authority to collect tolls: it became a freeway, clearing like a miracle the traffic there which at its worst had led to congestion even in Valenzuela City’s inner roads. This is what state power should be doing, responding swiftly to alleviate its citizens’ suffering.

Indonesian-controlled firm raking in billions from tollways PHOTO, DATA FROM COMPANY REPORTS

That was a brilliant, unexpected move, and I wonder why other cities and municipalities through which NLEX has toll roads — especially Quezon City — haven’t taken their cue from Gatchalian. But then the ultimate majority owner of NLEX Corp., through corporate layers, is the Hong Kong-based First Pacific, owned 44 percent by Indonesian magnate Anthoni Salim, who is one of the most powerful but hidden magnates in the Philippines. (First Pacific’s more well-known face is Salim’s chief executive, Manuel Pangilinan — who owns only 1.6 percent of the firm.)

Salim, through Philippine Long Distance Telephone Co. that he controls, bought a few years back the Philippine Star from the Belmontes, reportedly for P4 billion, although the family’s scions, Isaac and Miguel, continue to manage the newspaper. I wonder if that could have affected Quezon City Mayor Joy Belmonte’s nonchalance over the traffic caused by NLEX that also affects her city.

The Salim tollways enterprise’s arrogance has been demonstrated in this tollways issue. After Gatchalian asked NLEX early in the month for an action plan on how they proposed to address the horrific traffic at the expressway due to issues involving the electronic system of toll payment, the firm informed him that it would respond in 15 days.

Gatchalian naturally blew his top, as it meant that his Valenzuela constituents would have to suffer the traffic which has already affected businesses in the city for at least a fortnight more — and only after that period will NLEX tell him what it will do to correct the mess. Then a few days later, the firm’s spokesman Romulo Quimbo reportedly told a radio program that his firm is planning to file a restraining order against Gatchalian’s move.

Now, Gatchalian’s brother Sherwin, a senator who is the chairman of the Senate’s public services committee that has jurisdiction over public utilities, wants toll payments suspended for the entire NLEx. “My view here is if your system is not working, why charge the consumers? Let’s implement a toll holiday in the entire stretch of NLEx,” the senator said. “It’s not only Valenzuela experiencing such horrendous traffic here, other LGUs are also suffering because of NLEX’s problems,” he told a TV news program. “Operators are mandated to put perfect or near perfect RFID readers. But if it’s not functioning, then why allow the motorists to feel the inconvenience of that imperfection,” he said.

Such a move is not unprecedented. In 2014, India’s Supreme Court even ordered tolls to be suspended in the major highway between New Delhi and Gurgaon and directed a state corporation to take over from the private concessionaire.

I hope Senator Gatchalian looks deeper into this NLEx issue, as it points to a deeper problem: Why do we allow a foreign firm, First Pacific, to rake in billions of pesos in their operation of expressways, which are a public utility monopoly really. Doesn’t the Constitution limit foreign capital in utilities — as expressways are — to just 40 percent of the firm?

Company reports show that from 2015 to 2019, the mother firm of NLEX Corp., Metro Pacific Tollways Corp. (MPTC), generated a net income of P25.4 billion.

In fact, since 2015, tollways have become First Pacific’s third biggest cash cow, after telecoms and power. With those billions of pesos, couldn’t the conglomerate itself mobilize all its resources to install quickly and without glitches the cashless tollway payment the transportation department had ordered in August, so hundreds of thousands of Filipinos would have been spared of that hell-on-earth we call traffic?

Instead, MPTC thought of a way to make money out of the government order to adopt a cashless toll payment: It required a minimum of P500 to load its toll-cards. With the 1 million vehicles it claims passes through its expressways, that means — assuming that represents half of vehicles with the toll cards — P250 million flowing to its bank accounts, earning millions each day.

There is nothing in the construction of expressways and the collection of tolls that requires state-of-the-art technology that local businessmen can’t do. Metro Pacific doesn’t even operate the electronic toll collection. It just contracted a French firm, Egis Easytrip Services, to do that.

In fact, San Miguel Corp., headed by Ramon Ang, has proven how a Filipino firm can raise the billions of pesos needed to go into the expressway construction business. San Miguel Holdings runs the Southern Luzon Expressway (SLEx) and is building the Skyway Stage 1 and 2 project that would cut through Manila and link SLEx with NLEx.

Although Filipino magnates are known to keep part of their wealth abroad, I don’t think there is any doubt that First Pacific automatically remits the bulk of the profits of its tollways — I estimate 40 percent — to the Indonesian magnate and to the other foreign investors of that firm. Economists would call that an instance of the decapitalization of the Philippines.

I leave to you, dear Reader, to say which tollways had the worst mess in recent weeks, NLEx or SLEx?

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