No further delay in rebidding of P65-B LRT1 Cavite extension

MANILA, Philippines – No further delays. The May 28 scheduled rebidding of the P65-billion Light Rail Transit Line 1 (LRT-1) Cavite extension project should push through as scheduled.

“I think there is no reason to further delay it,” Department of Transportation and Communications (DOTC) Undersecretary Jose Perpetuo Lotilla said. The government, according to him, has addressed concerns that prompted the private sector to boycott the bidding last year. 

Bidding failed last year because the lone bidder did not meet requirements. Rebidding was initially scheduled on April 28 but it was moved another month. 

Lotilla said none of the interested bidders have signified an intention to defer submission of their bids.

The groups interested in the project are the following:

• Light Rail Manila Consortium – the tandem of infrastructure giant Metro Pacific Investments Corporation and conglomerate Ayala Corporation
• Construction giant DM Consunji Incorporation
• Filipino-owned Megawide Construction Corporation
• Spanish-owned Globalvia Inversiones S.A.U
• SMC Infra Resources Incorporated of diversified conglomerate San Miguel Corporation
• Eco Rail Services Incorporated of businessman Reghis Romero II
• Malaysian-owned MTD Philippines Incorporated

Last year’s boycott

The DOTC and the Light Rail Transit Authority (LRTA) declared a failed bidding August 2013 when only one of the 4 prequalified bidders – Light Rail Manila Consortium – submitted a bid. Other major proponents backed out due to concerns about the viability of the project.

“As far as the government is concerned we’ve tried to make the bid parameters as fair as possible taking into consideration the concerns of the private sector on viability,” Lotilla said.

The National Economic and Development Authority (NEDA) Board chaired by President Benigno Aquino III approved in November 2013 the revised terms for the project, including the payment by the government of real property taxes (RPT).

In addition, the government ensured the integrity of the facility’s structure for a 2-year period, approved a 5% fare increase upon completion of the project, and allowed the submission of negative bids.

The cost of the public private partnership (PPP) project increased by P5 billion from P60 billion due to additional components originally intended to be pursued as separate projects but which were later included in the project.

Slashed subsidy

The agency also slashed the P6-billion subsidy to only P5 billion. The subsidy is supposed to be offered to the winning bidder and would be contained in the revised instructions to bidders (ITB) of the LRT1 Cavite extension project.

This subsidy reduction is consistent with the deletion of the concessionaire’s obligation to fund up to P900 million the relocation specified in the draft Concession Agreement.

Last February 10, the DOTC said the subsidy amount (inclusive of taxes and value added tax) would have a ceiling of P6 billion. The department will also be asking for bids that will cover the construction of a common station connecting LRT-1 with the Metro Rail Transit Line 3, and with the MRT Line 7 that will be built in the EDSA-North Avenue area. This station is estimated to cost P1.4 billion.

The design of the proposed common station, according to Lotilla, will be included in the LRT1 Cavite extension project bid.  – Rappler.com