Will DOTC delay submission of bids for LRT-1 Cavite deal?

MANILA, Philippines – The Department of Transportation and Communications (DOTC) is still open to the possibility of extending the submission of bids for the Aquino administration’s biggest infrastructure project

Transportation Secretary Joseph Emilio Abaya told reporters on Thursday, October 31, that his department would accommodate requests to extend the deadline for bid submission for the P60-billion LRT-1 Cavite extension project.

The deadline was slated in early 2014, but may be deferred anew depending on the number of firms asking for an extension and the length of the extension being asked.

“We will assess this. You can’t come in cold as ice, (but) we can’t give you a year,” Abaya noted.

Earlier this year, the DOTC has delayed the first bidding of the rail deal several times.

The bidding only pushed through in August, but was declared a failure after its lone bidder did not meet the bidding requirements.

Abaya explained the submission of bids would be moved if the number of firms asking for an extension outnumber those pre-qualified bidders that are ready to submit their bids.

“Let’s say we get 8 bidders, and if 5 or 6 would say we are good to bid, but the 2 other firms would say we need another 6 months, then we would ignore the request of the 2 bidders,” he said in mixed English and Filipino.

Another consideration to be made before deciding to move the submission date for the auction is the length of the extension requested by interested investors.

A one-week extension request would have the greater chance of being granted than a one-year deferment proposal, he said as an example.

Justified

The Transportation Secretary stressed that another delay in the re-auction is justifiable to ensure that government gets the best deal.

“We want maximum competition,” Abaya added.

The first bidding last August was declared a failure after 3 of the 4 pre-qualified bidders withdrew from the race raising concerns on the commercial and technical aspects of the project.

The department discussed with pre-qualified bidders the deal-breakers in the original project terms which prompted the Transportation department  to make major revisions in the  concession agreement. The revisions include government subsidy, and absorption of the real property taxes by government, among others.

Concession agreement final

The concession agreement for LRT-1 Extension deal, according to Abaya, is already final and just awaiting the nod of the highest socio-economic board.

Abaya said the project terms will no longer be revised unlike in the case Mactan-Cebu International Airport  deal — another PPP project — where the DOTC has revised the concession agreement twice to make it more appealing to investors.

“If we change that, we start from the bottom and move up again, “ he added.

The National Economic and Development Authority Board chaired by President Benigno Aquino III is set to meet on November 11. LRT 1 project terms are among the items to be discussed during the meeting.

Abaya said a notice to bid for the LRT-1 Extension project deal will be posted a week after the NEDA board, and awarding of the project to the winning bidder is set in the first quarter of 2014. – Rappler.com