By Arra B. Francia, Reporter

METRO PACIFIC Investments Corp. (MPIC) is currently in talks with provincial government officials in Pampanga for the construction of a solid waste management facility.

“We will be meeting with officials of Pampanga for a waste-to-energy project. I know they are interested to put up a provincial facility,” MPIC President and Chief Executive Offficer Jose Ma. K. Lim told reporters in a recent briefing.

Mr. Lim, however, declined to give further details on the facility as they are still in the early stages of discussion.

Earlier this year, the infrastructure conglomerate submitted an unsolicited proposal to the Quezon City government for a solid waste management facility. Under the plan, MPIC will develop a P16-billion Integrated Solid Waste Management Facility that can convert up to 3,000 tons of municipal solid waste into 42 megawatts of baseload renewable energy. 

The project will be carried out by MPIC along with waste-to-energy specialist Covanta Energy, LLC and investor group Macquarie Group Ltd.

“Together we packaged the project, submitted it to the government, and we are now in the final stages of negotiation,” Mr. Lim said.

The project will have two components — a mechanical biological treatment that will segregate compostable material for separate collection, and a energy-to-waste component that will treat non-recyclable waste.

Mr. Lim said it will take around 18 months to construct the first component, while the latter will take 24 months.

“The revenue source will be 50% from the sale of electricity generated and about 50% from the tipping fees. The tipping fees I refer to are the fees paid by city government to the landfill when they land their waste,” Mr. Lim said. 

Once approved, the Quezon City government will own 5% of the project with an equity component, while the consortium will own 95% to be split  on a 60-40 basis between MPIC and the two foreign partners.

However, Mr. Lim noted said the local government unit has asked for a bigger share, around 30%, of the project.

“The only sticky point at this stage is the (QC) government wants a bigger share in the ownership because they want their tipping fee to be fully self-sustaining. In other words, they want the returns from the project to be sufficient,” he said. 

The MPIC executive said granting the government 30% ownership would not be feasible, as they are already sharing the revenues of the project with its foreign partners.

As a counter-proposal, Mr. Lim said they have asked to expand the capacity of the facility instead, noting that the land area is enough for them to build a plant with a capacity of 10,000 tons.

“We’d rather keep them at 5%, but expand the capacity… And they in turn will earn a hosting fee above the tipping fee. For hosting the waste in the entire Metro Manila, their tipping fee is fully subsidized by the operations,” Mr. Lim explained. 

MPIC hopes to iron out these details before the year ends, so the proposal can be subjected to a Swiss challenge by the start of 2018.

The spending for the solid-waste facility is part of MPIC’s P653-billion capital expenditure program from 2018 to 2022. The conglomerate looks to bag high-quality infrastructure programs from the government during this period, in a bid to strengthen its toll roads business, alongside power, water, hospital, and other units. 

MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.

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