Govt considers P2-B subsidy for LRT-1 Cavite

The DOTC seeks the approval of NEDA for government to shoulder some costs for the LRT1 Extension project

SUBSIDY. The government may shoulder P2-billion-worth of real property taxes in the LRT-1 Cavite extension project. Photo courtesy of the PPP Center

MANILA, Philippines – After several delays and the failed bidding for the P60 billion LRT-1 Cavite extension project, the government is mulling a P2 billion subsidy to get the rail project going.  

This is among the changes in the project’s terms of reference that the Department of Transportation and Communications (DOTC) is seeking approval for, according to Public-Private Partnership (PPP) Executive Director Cosette Canilao. 

Canilao said the DOTC’s Special Bids and Awards Committee is working on getting the nod of the National Economic and Development Authority (NEDA) Board for government to subsidize the real property taxes (RPT) to be included in the new concession agreement.

“We need the approval of the NEDA Board, but we’re still taking away the variables. RPTs will be absorbed by government, “ she added.

Canilao has earlier said RPTs amount to almost P2 billion.

She explained that payment of the real property taxes, which will be imposed by the local government units,  was the deal breaker when 4 of the pre-qualified bidders withdrew.

“For LRT-1, the RPT really became an issue,” she explained.

Three out 4 firms withdrew their participation shortly before the opening of the technical proposals last August 15.

The lone bidder, Light Rail Manila Consortium of Pangilinan-led Metro Pacific Investments Corp., however, failed to meet the requirements of the bidding, which resulted in a failure of bidding.

Canilao said rebidding for the railway project will be conducted before year-end.

The LRT-1 Cavite Extension project is among the biggest PPP projects under the Aquino administration.

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

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. – Rappler.com

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