Ayala takes second look at LRT-1 Cavite project

MANILA, Philippines – Ayala Corporation, the country’s oldest conglomerate, remains keen on the P60 billion Light Rail Transit Line 1 (LRT-1) Cavite extension rail project that it had snubbed in August.

The change in heart comes after the government overhauled the terms of the project, which now includes state subsidies that made the rail project more commercially attractive.

Noel Eli B. Kintanar, executive vice president of Ayala unit AC Infrastructure Holdings, however, stressed to reporters on the sidelines of the The Asset Forum on Wednesday, October 23, that the group would still want to see the final bid terms before deciding to re-join the next round set for November.

“We continue to look at the look at the project. We are just waiting for government to reissue the new bid documents, which will address some of the commercial issues. We are hoping that they issue that
soon so we can commence the formal bidding process on our end,” Kintanar said.

“It is often not said that it’s one of the busiest light rail transit line in the world. The volume of riders is very interesting for the private sector to be a partner. It has to work out commercially,” he added.

Among the changes in the LRT-1 project terms is the inclusion of a possible “negative bid,” which means the government would shoulder the risks and most of the cost of the project.

These and other changes in the project terms are awaiting the approval of the President Benigno Aquino III who chairs the National Economic and Development Authority board.

Partnership with MPIC

Kintanar shared that while the Ayala group had decided withdraw from the LRT-1 Cavite bidding, the group is hoping that — if it does pursue the rail project — it could revive its partnership with Metro Pacific Investments Corporation.

The two groups have previously formed Light Rail Manila Consortium, which was supposed to be the partnership entity that would bid for the rail projects the government is privatizing. Ayala however dropped out of the consortium in August.

MPIC became the lone bidder for the rail project, but the government said its proposal did not meet the project terms. The auction was declared a failure.

“Our hope is yes we will be able to work as a team. We worked as a team originally. At the end of the bid, I guess well we didn’t join their submission. But I think there is synergy between the two, and I
hope we can continue that,” Kintanar said.

Aside from Light Rail Manila Consortium, the other previously pre-qualified bidders were San Miguel Corporation’s SMC Infra Resources Inc., DMCI Holdings Inc., and MTD-Samsung Consortium of Malaysia and Korea.

The Cavite extension project will extend the existing 20.7-kilometer LRT Line 1 system, which runs from Roosevelt Avenue in Quezon City to Baclaran in Parañaque, by an additional 11.7 km southward to Bacoor,
Cavite.

The new line aims to increase the number of passengers at LRT-1 from 500,000 to 700,000 passengers a day. – Rappler.com