MPIC-led consortium lone bidder for LRT Cavite extension

MANILA, Philippines (UPDATED) – For the second time, only the consortium led by Metro Pacific Investments Corporation (MPIC) submitted a bid for the government’s massive railway extension project to Cavite.

Light Rail Manila, a tie-up with Ayala Corporation and Macquarie Group, was the lone bidder at the auction Wednesday, May 28, for the P65-billion Light Rail Transit Line 1 (LRT 1) Cavite Extension Project.

“One bid is submitted, and in accordance with the law and rules, the bidding may proceed,” said DOTC Undersecretary Jose Perpetuo Lotilla.

It was the second time that the project, the biggest Public-Private Partnership (PPP) thus far, was bid out.

The first bidding for the PPP in August 2013 failed after 3 groups withdrew from the race, citing risks, while Light Rail Manila’s offer was deemed non-compliant.

At Wednesday’s auction, Lotilla said other bidders, including San Miguel Corporation and DMCI Holdings Inc., informed the department that they were not participating.

“This project has already been delayed once so the government believes that it would be difficult to justify any further delay in the proceedings,” Lotilla said, noting that the PPP was the most awaited infrastructure project of the government. 

The project will extend the 20.7-kilometer LRT 1 by 11.7 kilometers, with a new south endpoint in Niyog, Bacoor, Cavite. 

PPP Center Executive Director Cosette Canilao said the government was looking to award the project next month. “We are hoping to make an award by next month.”

She said the Bids and Awards Committee (BAC) would evaluate the prequalification documents submitted by Light Rail Manila within 10 days or less.

Once the consortium hurdles the prequalification stage, she said the BAC would open the consortium’s technical and financial proposals.

Light Rail Manila is 55% owned by the MPIC group, 35% by Ayala, and 10% by Macquarie.

Notice of award

MPIC president Jose Maria Lim said they were confident that the project would be awarded to them.

“We did submit a competitive number because to us it is entering into a system and we will be well-placed to expand the rail operations and the whole system and not just LRT 1,” Lim said.

According to him, the consortium carefully studied all the risks involved in the project.

“In terms of risks we have a good understanding of the risks mainly the tariffs and politics of it.”

Jose Eric Francia, managing director of Ayala, for his part, said: “We are going to hit the ground running especially now that we are the sole bidder. We have to assume that we will be awarded.”

Non-participants

The project attracted interest from 7 parties including, San Miguel and DMCI, as well as Megawide Construction Corporation, Spanish-owned Globalvia Inversiones SAU, Eco Rail Services Inc. of businessman Reghis Romero II, and Malaysian-owned MTD Philippines Inc.

San Miguel brought 5 big boxes containing documents to the venue of the bidding but decided not to participate.

“It’s a management decision,” a representative of the conglomerate told reporters.

Megawide said it decided to no longer participate having been awarded several PPP projects, including the P17.5-billion Mactan-Cebu International Airport expansion project.

DMCI questioned the viability of the project, while Alloy MTD was pushing for a 2-month extension of the deadline of submission of bids.

After the failed bidding last year, the National Economic and Development Authority Board chaired by President Benigno Aquino III approved the revised terms for the project. One of the revisions was the payment of real property taxes by the government.

The government also approved a 5% fare increase upon completion of the project, and allowed the submission of negative bids. However, it slashed the P6-billion subsidy to be extended to the winning bidder down to P5 billion.

The LRT 1 extension project will open up rail services to nearly 4 million residents of the cities of Parañaque and Las Piñas, and the province of Cavite. – Rappler.com