DOTC to award LRT 1 Cavite extension project in 2 weeks

MANILA, Philippines – The tandem of infrastructure giant Metro Pacific Investments Corporation (MPIC) and conglomerate Ayala Corporation would still have to wait for 2 more weeks before getting the green light for the P65-billion ($1.48 billion) Light Rail Transit line 1 (LRT1) Cavite extension project.

Transportation Secretary Joseph Emilio Abaya said the Department of Transportation and Communications (DOTC) joint bids and awards committee (BAC) and the Light Rail Transit Authority (LRTA) are now negotiating with the Light Rail Manila Consortium.

“In 2 weeks we expect to make an award. We are in the process of negotiating with the lone bidder,” Abaya stressed.

The government will try to convince the Light Rail Manila Consortium to further improve its P9.35-billion ($213.15 million) premium payment to the government for the public-private partnership (PPP) project under the Build Operate Transfer (BOT) law or Republic Act 7718.

“We are mandated to negotiate,” Abaya explained.

The Cavite extension project will increase the span of Line 1 from 20.7 kilometers to 32.4 km with a new south endpoint in Niog, Bacoor, Cavite. Approximately 10.5 km of the Cavite Extension System would be elevated and 1.2 km would be at grade level. The extension would serve nearly 4 million residents of Parañaque, Las Piñas, and Cavite.

The construction of the tracks, the stations and all its attendant facilities, operation and maintenance worth about P30 billion ($683.91 million) comprised the contract bid out by government. The other half of the P65-billion project ($1.48 billion), covering the purchase of the coaches, will be funded by the government through official development assistance.

NEDA-approved

The National Economic and Development Authority (NEDA) Board chaired by President Aquino approved on June 19 the offer made by the Light Rail Manila Consortium.

“We haven’t awarded yet,” Abaya clarified.

Light Rail Manila is led by MPIC with a 55% stake, and Ayala Corporation with 35%. Macquarie Infrastructure Holdings (Philippines) Pte Ltd holds the remaining 10%.

After a failed bidding, the NEDA board approved on November 21 the revised terms for the project including the payment of real property taxes (RPT) by the government. The government also ensured the integrity of the facility’s structure for a two-year period, approved a 5% fare increase upon project completion, and allowed the submission of negative bids.

MPIC President Jose Ma. Lim said the consortium was ready to remit 20% of the premium payment before the signing of the concession agreement for the PPP project. The balance of 80% would be paid during the 32-year concession period, he added.

“We are expecting the right of way to start in 2015 and we have to complete the construction of the entire extension by 2020,” Lim said. – Rappler.com