Major changes in LRT-1 Cavite project terms

The transportation chief says even previously disqualified bidders may participate and private firms may form new partnerships for the next bidding

 Major overhaul for the LRT1 extension project terms. Photo courtesy of the Public-Private Partnership Center

MANILA, Philippines – The terms of the P60-billion LRT-1 Cavite Extension project, one of the big ticket infrastructure projects under the Public Private Partnership (PPP) scheme, have undergone a major revamp to make the project more attractive to investors after the August bidding was declared a failure.

On the sidelines of the Philippine Transit App challenge on Monday, October 14, Transportation Secretary Joseph Emilio Abaya said the changes in the concession agreement were made following consultations with pre-qualified bidders.

“We’ve listened to everybody. We basically addressed their requests,” Abaya stressed.

Abaya said the major changes in the terms are as follows:

  • Absorption of the real property taxes by the government
  • Warranty for existing structure
  • Protection mechanism for power rate increases
  • Acceptance of negative bids

Back to square one

The transportation secretary stressed that the re-auction for the project will be open to all bidders.

Abaya added that even previously disqualified firms may participate and private firms may form new partnerships for the next bidding.

“[It will be] open to all, even those disqualified previously. They can always reorganize themselves, everyone can start from scratch,” he noted.

Only Manuel V. Pangilinan-led Metro Pacific Investments Corporation participated in the August 15 bidding after the 3 other prequalified groups withdrew their participation due to concerns on the commercial viability of the rail project.

The revision of the project terms is not unique to the LRT-1 extension project.

Similarly, the concession agreements for the Mactan-Cebu International Airport project and the MRT Automated Fare Collection System were also changed to make them more attractive to investors.

The re-auction of the LRT-1 extension project is set before yearend, after the DOTC gets the approval of the highest social and economic development planning and policy coordinating body this October or November. (READ: LRT-1 Cavite project rebid in 2013 not 2014). –


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