Month: December 2013

Ayala Corporation announced that it acquired 140 million common shares of Manila Water Co., Inc. representing a 5.7% interest in the water utility. The shares were acquired from its strategic partner, Mitsubishi Corporation, which has been a long-time partner of Ayala since 1974 and has been a shareholder of Manila Water since 1997.

Following the acquisition, Ayala’s stake in Manila Water will increase from 43.1% to 48.8%, while Mitsubishi will remain a shareholder with a 1.2% interest.

Ayala President and COO Fernando Zobel de Ayala said, “Ayala Corporation is pleased to have this opportunity to increase its stake in Manila Water. Manila Water has consistently shown its ability to deliver world-class water and wastewater services, which brings countless benefits to the local and international communities in which it operates. We believe in the long-term growth potential of Manila Water as it continues to expand outside the East Zone of Metro Manila into other areas here and abroad that are in critical need of reliable water and wastewater services.”

Apart from Manila Water’s concession in Metro Manila’s East Zone, the company currently has four domestic water businesses which include Boracay Water, Laguna Water, Clark Water, and a bulk water supply project in Cebu. Combined, these businesses serve a population of 8.0 million Filipinos and Manila Water has continued to expand coverage and consistently reduce non-revenue water or system leakage over the past years. Manila Water has also expanded into water businesses around the ASEAN region, particularly in Vietnam where its expertise in water service and quality has been validated with the acquisition of two bulk water supply facilities in Ho Chi Minh City. Its leakage reduction project in Ho Chi Minh City which started in 2008 has outperformed its target and has benefited 25% of the city’s 6 million population.

The transaction is valued at P2.8 billion and was executed via a special block sale through the Philippine Stock Exchange.

The above statement pertains to the disclosure made on December 16, 2013, to the SEC, PSE, PDex, by Ayala CFO Chito Gonzalez.

Two of the country’s largest and most prominent conglomerates, First Pacific group and Ayala group, submitted the best complying bid for the latest Public-Private Partnership (PPP) project, the P1.72-billion contactless automatic fare collection system (AFCS) that is expected to improve ridership experience for Light Rail Transit (LRT) and Metro Rail Transit (MRT) commuters through a modern and convenient fare collection system.

The Department of Transportation and Communications (DOTC) will conduct a customary post-bid evaluation before it awards the project to AF Consortium which is expected to be announced on December 23, 2013. The project will modernize the country’s transport systems by financing, designing, constructing, and managing the implementation and operation of a contactless AFCS based on smart card technology.

The AF Consortium is among the five consortia pre-qualified by the DOTC that submitted bids to this critical project, composed of groups that teamed up with foreign companies with established experience in similar ticketing systems, such as those in the technology, banking, transportation, and retail industries.

The AF Consortium is composed of BPI Card Finance Corporation as lead member, Globe Telecom, and AC Infrastructure Holdings Corp. of the Ayala group and Metro Pacific Investments Corp., Smart Communications and Meralco FinServe of the First Pacific group.

The AF Consortium partnered with MSI Global and SMRT. MSI Global developed the software for the automatic fare collection systems in Singapore and Bangkok, while SMRT currently operates Singapore’s mass transit system.

The DOTC first evaluated the Technical Proposal of the AF Consortium and gave it a passing mark last December 6, 2013 along with two other bidders. On December 9, 2013 it announced that the AF Consortium offered the best price.

The contactless payment system will facilitate efficient passenger transfer to other rail lines, and enhance fare collection efficiency by reducing leakage and fraud.

AFCS has the business potential for expansion to other transport modes and systems, such as buses, toll roads and the Philippine National Railway (PNR), in the future.

Capitalizing on Integrated Strength and Expertise for the Project’s Full Potential

The AF Consortium, through its combined skills in managing leading companies in the country, reflects a strong partnership that will help realize the latent possibilities of the system as well as expanding it to opportunities in the retail business.

“We are pleased to share a common ground with Ayala Corporation through the AFCS project that will help modernize our rail transport system. This strategic alliance will create integrated solutions that will improve public transportation through our vision to transform the country’s light rail transit system into a network very much like those in Hong Kong, Singapore, and other major cities in Asia,’’ MPIC chairman, Manuel V. Pangilinan said.

“We are delighted to build this exciting platform together with the First Pacific group. We will be leveraging the complementary strengths and assets of each consortium member, and we believe that we can help bring out the promising potential of AFCS not only as a transit fare collection method but as a broader and efficient payment ecosystem at par with global standards,” Ayala Corporation Chairman and CEO Jaime Augusto Zobel de Ayala said.

With this partnership, the two conglomerates’ much vaunted management experience, technical know-how, reputable customer base as well as financial clout, will combine for a formidable package to ensure the success of AFCS.

The AF Consortium has the option to expand the contactless card system to other businesses in and out of the transportation sector, such as in retail transactions making it a truly pervasive scheme that is envisioned to change the payments landscape in the country.

Full implementation of AFCS is targeted by the third quarter of 2015