Bidding for LRT-1 deferred anew

Light Rail Transit (LRT) line 1

The transportation department has moved the bid submissions for the Light Rail Transit Line Cavite extension deal to the second quarter of 2014 from the previous first quarter target in an effort to draw more bidders.

The department, in a statement issued Monday, also explained the unexpected increase in project cost, now valued at P64.9 billion from about P60 billion previously, as it added more components originally intended to be auctioned off separately.

The LRT-1 Cavite extension, which involves the construction of a mostly elevated 11.7-kilometer railway line from Baclaran to Bacoor, Cavite, is the single-biggest project under the Aquino administration’s public private partnership (PPP) program. It was also deemed among the PPP program’s most complicated projects, resulting in several delays and a failed bidding exercise last Aug 15.

“This timeline is meant to foster competitive bids. We believe that the improved terms will attract more players who will need a reasonable period to study the project and prepare their proposals,” said Michael Sagcal, spokesperson for the Department of Transportation and Communications.

The DOTC said it would give four to six months from the start of the bidding process to allow new players to come into the picture.  The bidding process begins upon the publication of an invitation to bid, which the transport agency will do within December 2013.

Improved terms, mainly taking into account inputs from the private sector, were approved by President Aquino last week.

These include the government absorbing the obligation to pay real property taxes (RPT), ensuring the integrity of the facility’s structure for a two-year period, subsidizing unexpected surges in power rates beyond a particular range, permitting a 5-percent fare increase upon completion of the project and allowing the submission of negative bids.

The Neda Board’s approval also entailed an increase in the project cost to P64.9 billion due to the addition of new components to the project’s terms.

The first was remedial and rehabilitation works for the existing system, which has been operating since the 1980s, such as repairing the carriage viaduct, rehabilitating existing trains especially their roofing, as well as making the LRT-1 system compliant with laws and regulations.

Also included was the installation of equipment that will be part of the common ticketing system called the Automatic Fare Collection System (AFCS), which is being bid out by the DOTC separately, only for the Cavite extension portion of LRT-1.