LRT-1 Cavite extension bidding ‘a failure’

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The transportation department will rebid the rail project in the 4th quarter

A FAILURE. The government says bidding for LRT-1 Cavite extension failed. The project will be bid out again in the next quarter. Photo courtesy of the PPP Center

MANILA, Philippines (UPDATED) – The Department of Transportation and Communications (DOTC) will rebid the proposed P60-billion Light Rail Transit Line 1 (LRT-1) Cavite extension project in the 4th quarter of the year after declaring the first bidding a failure.

DOTC undersecretary Jose Perpetuo Lotilla said the joint Bids and Awards Committee (BAC) of the DOTC and the Light Rail Transit Authority issued a resolution declaring the August 15 bidding of the project a failure because the lone bidder did not comply with requirements.

Lotilla said the board of the National Economic and Development Authority (NEDA) will have to approve the revised terms of the largest Public-Private Partnership (PPP) project of the Aquino administration.

“The terms have to go back to NEDA for approval before the rebidding,” he said.

PPP Center head Cosette Canilao said they hope to get NEDA approval as early as next week.

She said only the set of criteria for the financial bid was “tweaked to respond to issues raised by previous prequalified bidders.”

The NEDA board is chaired by President Benigno Aquino III, who approved the LRT-1 project in March 2012.

Shorter bid process

Lotilla said the project will be bid out again in the 4th quarter. “Most probably in the 4th quarter considering the timing.”

Canilao said the second bidding will take about 4 months. The first bidding took about 17 months.

“Why shorter? It’s because all issues were already raised by previous bidders. Now we can bid the documents to interested parties in one bulk. DOTC is looking at a single stage for the rebidding,” she explained.

The LRT-1 project was supposed to have been awarded in the 2nd quarter so construction could start early 2014.

Failed bidding

In the August 15 bidding, the DOTC’s BAC received only one bid. Citing business risks, 3 of the 4 pre-qualified bidders withdrew from the race.

The proposal of Light Rail Manila Consortium of Pangilinan-led Metro Pacific Investments Corp. meanwhile failed to meet the requirements of the bidding.

Lotilla said the proposal had “conditions.” He explained that “in the invitation to bid, the government says here are the terms. In order to make a compliant bid, you have to say you accept all of these terms.”

Light Rail Manila was formed by MPIC and Ayala Corp. Ayala however dropped out of the consortium.

Ayala CFO Delfin Gonzalez Jr. informed the Philippine Stock Exchange Thursday that the conglomerate is now in talks with MPIC on how to proceed with the partnership for LRT-1.

Canilao said the rebidding will be “opened to everyone again.”

Construction by 2014

Transportation Secretary Joseph Emilio Abaya said the government revised the terms of the LRT-1 project to address the concerns of prequalified bidders on the viability of the rail system.

He pointed out that the primary concern of the government is to make sure that construction works will start in the second half of 2014.

The project will extend the existing 20.7-kilometer LRT-1 by 11.7 km, with a new south endpoint in Bacoor, Cavite.

Of the total project cost, P30.6 billion will be shouldered by the private sector, while government will spend P30 billion for the acquisition of 39 new light rail vehicles through an official development assistance loan from Japan International Cooperation Agency.

The new line is expected to increase the ridership of LRT-1 from 500,000 to 700,000 passengers per day, and provide faster and more convenient mode of transportation to residents of Cavite, Las Piñas and Parañaque. – with reports from Judith Balea,

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