San Miguel Holdings Corp. (SMHC), the infrastructure arm of diversified conglomerate San Miguel Corp. (SMC), has been awarded the ₱7.78-billion Boracay Bridge Project by the Department of Public Works and Highways (DPWH).

In a March 30 notice of award (NOA) addressed to SMHC Chairman and President Ramon S. Ang, DPWH Secretary Vivencio B. Dizon said the department has approved the resolution by its public-private partnership (PPP) prequalification, bids, and awards committee (PBAC) for PPP projects, recommending the award of the contract.

SMHC is the original proponent of the project, and the unsolicited proposal was subjected to a “Swiss Challenge,” but there were no competing bids submitted. A “Swiss Challenge” is a procurement process for unsolicited proposals in which other parties are invited to submit competing bids, with the original proponent given the right to match the best offer and retain the project if it chooses.

The contract covers the financing, design, construction, and operation and maintenance (O&M) of the new Boracay bridge. The approved total project cost amounts to ₱7.78 billion, inclusive of financing costs.

Spanning 2.54 kilometers (km), the bridge will link Boracay Island to mainland Panay Island in Malay town, Aklan province, and will eventually improve transportation access for residents, tourists, and businesses.

The project is expected to ease congestion and reduce environmental impact while enhancing mobility in the area, according to the DPWH.

The project includes a 1.14-km limited-access bridge that will have two lanes, including sidewalks and bike lanes.

It also includes access road infrastructure with facility hubs on both islands, providing commercial spaces for lease, parking areas for service vehicles, and a hub for the operation of public transport vehicles and cargo or delivery vehicles.

Through a PPP arrangement for a period of 30 years, the project is expected to open up new all-weather access for vehicles and pedestrians, manage the environmental carrying capacity of the island, and alleviate overcrowding and overuse of existing facilities.

As winning proponent, SMHC is given 20 days from receipt of the NOA to submit all post-award requirements for the execution of the concession agreement.

Among these requirements is the posting of works performance security in favor of the DPWH, issued by an independent, non-affiliated, and reputable issuing company in cash, irrevocable letters of credit, or bank draft, amounting to a minimum of two percent of total project cost.

Alternatives include a bank guarantee amounting to a minimum of five percent of total project cost or a surety bond for a minimum of 10 percent of total project cost.

SMHC must also form a special purpose company, plus provide proof of firm commitment from a reputable financial institution to provide sufficient credit lines to cover the total project cost.

Within five calendar days from receipt of the post-award requirements, the DPWH will determine SMHC’s compliance with all the conditions stated in the NOA to execute the concession agreement with SMHC.