Ayala may re-join LRT-1 Cavite bid

MANILA, Philippines- Ayala Corp. may still join Metro Pacific Investments Corp. (MPIC) in the bidding for the P60 billion LRT-1 Cavite extension project.

“We will definitely bid. We, as Ayala, will bid for the project,” said Ayala Corp. managing director John Eric Francia on Wednesday at a briefing with business reporters on Wednesday, August 28. 

Ayala and MPIC are strategic partners for rail projects the government is bidding, but Ayala, through unit AC Infrastructure Holdings Corp., had announced it was dropping out of the race for the LRT-1 extension project.

This left MPIC-led Light Rail Manila Consortium to bid on its own for the project last August 15, the deadline of Submission of Proposals and Opening of Envelopes.

Francia said there are ongoing talks with MPIC on how to go proceed with their joint venture because their partnership extends to all railway projects in Metro Manila. Under their original agreement, the two conglomerates would each own half of the light rail projects and the real estate development component that comes with these.

“We would be open to continue our partnership with MPIC but at the end of the day both parties have to agree,” Francia said, adding that it was a “business judgment” that prompted Ayala Corp. to pull out from the JV.

MPIC president Joey Lim earlier said that it is necessary for both Ayala Corp. and MPIC to discuss how both of them will take part in other railway projects that will be bid out by the government. “I think we will probably want to review with them how to proceed in the future,” said Lim.

For now, Francia said Ayala Corp.’s s focus is centered on the LRT-1 Cavite extension project. “We, meaning Ayala and MPIC, can always discuss the broader picture later on as we would like to see clarity and finality with regards to the government’s decision on the LRT1 auction.”

Francia earlier said the joint venture of  Ayala and MPIC last April remains in tact as the conglomerate’s decision only covers the LRT1 project and not future light rail projects.

“This decision is only for this specific LRT-1 bid. We will continue to pursue future rail projects, and our framework agreement with MPIC is still live,” Francia said earlier.

Rebidding

The proposal of Light Rail Manila Consortium, the joint venture vehicle of Ayala and MPIC, and the lone bidder, for the LRT Line 1 project, was considered unacceptable by Special Bids and Awards Committee (SBAC) of the Department of Transportation and Communications (DTOC). 

DOTC Secretary Joseph Emilio Abaya has earlier announced that SBAC is mulling the option of   extending the bidding process to address the concerns raised by prequalified bidders that withdrew their participation.

Three of the 4 pre-qualified bidders withdrew their participation from the project.

“An option to move the project forward under the Build-Operate-and-Transfer Law is to re-bid it. In case of a re-bidding, a single-stage process is possible in order to meet the project?s original deadlines. Once the BAC’s recommendation is approved, the DOTC will announce the next steps for the bidding of the project to the public,” said the agency.

In a previous interview, Abaya said the bid committee is”looking at the possibility of extending the bidding process and reevaluating the existing terms to further address the commercial issues raised by the pre-qualified bidders.”

The transportation chief said that the government is exerting effort to ensure that the construction of the railway project remains on schedule.

DOTC spokesperson Atty. Michael Arthur Sagcal said the SBAC will convene and pass a resolution this week to open the rebidding of the project.

“In case of a re-bidding, a single-stage process is possible in order to meet the original deadlines,” Sagcal said. He explained  that under a single-stage process all interested parties would be required to submit the prequalification documents together with the technical and financial proposals.

“Once the final decision of the DOTC is made then we really need to finalize a decision with respect to the JV with MPIC,” said Francia. – Rappler.com