Elections bring uncertainty to LRT6 project

MANILA, Philippines – The government’s P65.09-billion ($1.37-billion) plan to build a 19-kilometer elevated railway from Niyog, Bacoor, Cavite to Dasmariñas along the Aguinaldo Highway faces a risk: the possibility that the administration will not commit to it.

Big firms that expressed interest in the Light Rail Transit Line 6 (LRT6) public-private partnership (PPP) deal raised concerns on the timeline of the bidding process as presidential elections in May near.

“We’ve got elections coming up and we are running into a change of government. I do not know what will happen to this project…March 1 [target date] for a pre-bid conference is impossible,” Karim Garcia, Metro Pacific Investments Corporation (MPIC) vice president for business development, said during a conference in Mandaluyong on Monday, February 15.

Another representative of San Miguel Holdings Corporation raised the same concern, flagging risks over the timing of the project given the transition in government leadership in mid-2016. (READ: PPP Center to next admin: Prioritize airports, trains, subway)

“We’ve dealt and been dealing with several PPP projects. And based on our experience, construction is delayed because of right-of-way acquisition. With the LRT6 deal, there is also the government transition,” the San Miguel representative said on the sidelines of the conference. “With all these taken into account, the timeline for the project should be pushed back.”

MPIC and San Miguel are the two firms that bought bid documents for the railway PPP deal as of Friday, February 12.

Under the Department of Transportation and Communications’ (DOTC) indicative timeline, the last day of submitting queries for the LRT6 deal is set on March 1, with the pre-qualifying submissions due on April 5.

The submission of bids for the LRT6 is targeted in August, while signing of the concession agreement is set for October this year. (READ: PPP thrust: Work in progress)

For MPIC, Garcia said the DOTC must take into account the time companies need to set up a consortium and comply with all the requirements.

Next admin won’t say no

“There’s no guarantee that the next administration will not change it, but we are confident the program will be continued,” LRT6 Project Manager Timothy John Batan said on the sidelines of the conference.

DOTC Assistant Secretary Jaime Fortunato Caringal, meanwhile, said the department is confident the project will continue under the administration of a newly elected president.

“We will lay down the groundwork. The next administration can change the timetable. I think the next administration will be reasonable to take into account the opinions of the interested bidders,” Caringal said.

Interest among private firms

Other than MPIC and San Miguel, other firms that were also present at the LRT6 pre-qualification conference include MRail, Incorporated, Paris-based rail engineer SYSTRA, Egis Group, Metro Builders Corporation, and Canada’s Bombardier, Incorporated.

“The interest of biggest and best in class of participants is here,” Batan said.

Meanwhile, MPIC’s Garcia said his firm, along with Ayala Corporation and Macquarie Infrastructure Holdings (Philippines) Private Limited, has “high interest” in the project.

MPIC, Ayala, and Macquarie – through Light Rail Manila Consortium – have also bagged the LRT Line 1 (LRT1) Cavite Extension project.

The LRT6 will have 7 stations including Niyog, Tirona, Imus, Daang Hari, Salitran, Congressional Avenue, and Governor’s Drive.