Ayala, MPIC offer P9.35B for LRT 1 Cavite extension project

MANILA, Philippines – The Light Rail Manila Consortium led by infrastructure giant Metro Pacific Investments Corporation (MPIC) and conglomerate Ayala Corporation on Thursday, June 5, offered P9.35 billion to undertake the Light Rail Transit line 1 (LRT-1) Cavite extension project.

Transportation Secretary Joseph Emilio Abaya told reporters that the financial bid of the Light Rail Manila Consortium was above the Department of Transportation and Communications’ (DOTC) offer of a subsidy or viability gap funding (VGF) of P5 billion for the public private partnership (PPP) project. “So we were ready but it’s a good thing the proponent saw it in a different light. They see more potential than what the government sees,” Abaya said.

DOTC’s Bids and Awards Committee (BAC) approved the technical bid of Light Rail Manila Consortium resulting in the opening of the financial bid Thursday, June 5, DOTC spokesperson Michael Arthur Sagcal said.

MPIC Light Rail Corporation of infrastructure giant Metro Pacific leads the consortium with 55% stake; Ayala’s AC Infrastructure Holdings Corporation has 35%; and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd. has 10%.

MPIC President Jose Ma. Lim said the consortium was ready to remit 20% of the premium payment before the signing of the concession agreement for the PPP project. The balance of 80% would be paid during the 32-year concession period, he added. “We are expecting the right of way to start in 2015 and we have to complete the construction of the entire extension by 2020.”

PPP Center Executive Director Cosette Canilao said in an interview with reporters that the financial bid of Light Rail Manila Consortium would still have to be scrutinized by National Economic and Development Authority – Investment Coordination Committee (NEDA-ICC) and the NEDA Board chaired by President Benigno Aquino III.

After a failed bidding, the NEDA board approved on November 21 the revised terms for the project including the payment of real property taxes (RPT) by the government. The government also ensured the integrity of the facility’s structure for a 2-year period, approved a 5% fare increase upon project completion, and allowed the submission of negative bids.

According to Canilao, the Build Operate Transfer (BOT) law or Republic Act 7718 calls for a review of bids if there is only one bidder for a particular BOT project. “That shows how responsive the government has for this type of project. Even though the government [has] one bid, it is a quality bid. At the end of the day, our most concern is to get quality bid,” Canilao said.

DOTC is also expecting to get P25.55 billion from two other major infrastructure projects including the P14.4 billion for the Mactan-Cebu international airport project, and P1.8 billion for the automated fare collection system (AFCS).

The Cavite extension project would increase the span of Line 1 from 20.7 km to 32.4 km with a new south endpoint in Niog, Bacoor, Cavite. Approximately 10.5 km of the Cavite Extension System would be elevated and 1.2 km would be at grade level. The extension would serve nearly 4 million residents of Parañaque, Las Piñas, and Cavite.

The construction of the tracks, the stations and all its attendant facilities, operation and maintenance worth about P30 billion comprised the contract bid out by government. The other half of the P65-billion project, covering the purchase of the coaches, would come from the government through official development assistance. – Rappler.com