LRT-1 Cavite extension project now costs P65B

The project will be auctioned off to investors in the second quarter of 2014, says the DOTC

OVERHAULED. The project terms of the railway deal have been expanded. Photo courtesy of the PPP Center

MANILA, Philippines – The cost of the Light Rail Transit (LRT) 1 Cavite extension project, the biggest infrastructure deal under the Private-Public Partnership program, has gone up by almost P5 billion due to the expansion of the project scope.

In a statement on Monday, November 25, the Department of Transportation and Communications (DOTC) said the railway project is now valued at P64.9 billion versus the original P60 billion. The increase comes after the National Economic and Development Authority board approved the additional components of the project.

The new components include:

  • Some remedial and rehabilitation works for the existing system, including repair of the carriage viaduct and rehabilitation of existing trains
  • Installation of equipment that will be part of the common ticketing system – the Automatic Fare Collection System (AFCS) – for the Cavite extension portion of LRT 1 only 
  • Other components such as contingency costs that may arise in relation to other projects linked with the LRT 1 extension deal, such as the AFCS; construction of the common station linking LRT 1 with Metro Rail Transit (MRT) Lines 3 and 7; and the LRT 1 Cavite extension components procured under the project’s Official Development Assistance portion

These components were originally intended as separate projects, but are now included in the project terms, DOTC noted.

Bidding in Q2 2014

Given changes in the terms, bidding for the project has been pushed back to the second quarter of 2014 to allow more companies to participate. (READ: Will DOTC delay submission of bids for LRT 1 Cavite deal?)

“This timeline is meant to foster competitive bids. We believe that the improved terms will attract more players, who will need a reasonable period to study the project and prepare their proposals,” DOTC Spokesperson Michael Arthur Sagcal said.

An invitation to bid will be published in December to start the bidding process, according to DOTC.

Next year’s bidding will be the second for the project after the first held last August was declared a failure.

The terms of the project were revised in a bid to attract more investors. Three of four prequalified bidders last August withdrew their participation from the race due to concerns over the commercial viability of the project. – Rappler.com