MANILA, Philippines – On Wednesday, May 28, conglomerate San Miguel Corporation was all set to bid for the P65-billion LRT 1 Cavite Extension project, but backed out at the last minute. Why?
San Miguel president and COO Ramon Ang said the project was not viable.
“We were really serious in joining. At the last minute, while running the computation, the figures did not pass our hurdle rate,” Ang stressed.
According to him, a San Miguel representative brought 5 boxes containing the company’s technical and financial proposals to the venue of the bidding, but did not submit them. Instead, the representative gave the Department of Transportation and Communications (DOTC) a letter informing the agency that the company was not participating in the bidding.
Based on the company’s computations, Ang said the return on investment would likely materialize on the 20th year, even with the P5 billion subsidy to be extended by the government.
Aside from San Miguel’s SMC Infrastructure Resources Inc., other companies that did not submit their bids last Wednesday were Filipino-owned Megawide Construction Corporation, Spanish-owned Globalvia Inversiones SAU, Eco Rail Services Inc. of businessman Reghis Romero II, and Malaysian-owned MTD Philippines Inc.
The DOTC pushed through with the bidding despite receiving a lone bid from Light Rail Manila – the consortium of Metro Pacific Investments Corporation (MPIC), Ayala Corporation and Macquarie Group.
The LRT 1 Cavite Extension project, the Aquino administration’s largest Public-Private Partnership project thus far, will increase the span of Line 1 from 20.7 kilometers to 32.4 kilometers with a new south endpoint in Niog, Bacoor, Cavite.
Approximately 10.5 kilometers of the Cavite extension will be elevated and 1.2 kilometers will be at-grade level. The government set aside P30 billion to acquire up to 39 new Light Rail Vehicles for this project.
The extension will open up Line 1 services to nearly 4 million residents of the cities of Parañaque and Las Piñas, and the province of Cavite. – Rappler.com