DOTC on LRT bid: No favors granted to Ayala-MPIC consortium

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The agency says there is no conflict of interest in the bidding even if the brother of an undersecretary works for the Ayala group

NO CONFLICT OF INTEREST. The Department of Transportation and Communications says there is no conflict of interest in the bidding even if the brother of an undersecretary works for the Ayala group. Photo from the PPP Center

MANILA, Philippines – The Department of Transportation and Communications (DOTC) said Tuesday, July 8, it had acted properly in the bidding of the Light Rail Transit line 1 (LRT 1) Cavite extension project, dismissing allegations of conflict of interest.

DOTC clarified that the department’s undersecretary, Rene Limcaoco, did not favor the lone bidder for the P65-billion ($1.49 billion*) public-private partnership (PPP) project – the consortium of Ayala Corporation and Metro Pacific Investments Corporation (MPIC). Limcaoco’s brother, Jose Teodoro, is working for the Ayala group.

Light Rail Manila was the only one that submitted an offer for the PPP project. The consortium is led by MPIC, with a 55% stake, and Ayala, with 35%. Macquarie Infrastructure Holdings (Philippines) Pte. Ltd. holds the remaining 10%.

In June, Light Rail Manila submitted a bid of P9.35 billion ($213.15 million) to undertake the LRT-1 Cavite extension project, which was approved by the National Economic and Development Authority (NEDA) board, chaired by President Benigno Aquino III.

“There is no truth to the claim that a brother of Undersecretary Limcaoco was involved in the LRT 1 Cavite extension PPP bidding. We confirm from our records that Jose Teodoro Limcaoco is not a director, officer, or shareholder of AC Infrastructure Holdings Corporation or any other company forming the Light Rail Manila Consortium,” DOTC Spokesperson Michael Arthur Sagcal said.

The insinuations being made are clearly an attempt to cast doubt on the process that DOTC conducted, Sagcal stressed.

Limcaoco was appointed president of BPI Family Savings Bank in July 2010 after serving president of BPI Capital Corporation in 2007 and as managing director of Ayala Corporation in 1998, Ayala Corporation Group Head for Corporate Strategy and Development Jose Eric Francia stated.

“Mr. Limcaoco has no management function at Ayala nor its infrastructure arm, AC Infrastructure Holdings Corporation. He had no involvement in any of the PPP bids that the Ayala group has participated in. As such, we strongly affirm the absence of conflict of interest in any of the DOTC bids,” Francia clarified.

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

Pending approval

Meanwhile, the Light Rail Transit Authority (LRTA) board is set to meet next week to discuss the offer made by Light Rail Manila.

The LRTA board, chaired by DOTC Secretary Joseph Emilio Abaya, is scheduled to meet on Wednesday, July 16, LRTA Spokesman Hernando Cabrera said Tuesday.

“We are still determining the availability of members but we target next week,” LRTA Administrator Honorio Chaneco said in a text message.

The offer made by Light Rail Manila will have to be approved first by the joint Bids and Awards Committee of the DOTC and the LRTA, Cabrera said.

The offer will then have to be ratified by the LRTA board before it is finally approved by the DOTC chief, Cabrera added.

The LRTA board is composed of 8 ex-officio cabinet members namely the DOTC secretary as chairman; Department of Public Works and Highways, Department of Budget and Management, and Department of Finance secretaries; NEDA chief; Metropolitan Manila Development Authority chairman; Land Transportation Franchising and Regulatory Board chairman; the LRTA administrator; and a representative from the private sector.

The LRTA board issues, prescribes, and adopts policies, programs, plans, standards, guidelines, procedures, rules, and regulations for implementation, enforcement, and application by the LRTA management.

It also convenes to resolve operations-related issues and concerns and other matters requiring immediate attention and resolution. –




*($1 = P43.56)

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