Gov’t offers P6-B subsidy to winning LRT bidder

The government will offer a P6-billion subsidy to the bidder who will clinch the P65-billion Light Rail Transit Line 1 extension project under the government’s public-private partnership program.

The government recently revised the terms so that the project would be more acceptable to the private sector.

In a bid bulletin, the transportation department said the subsidy would come in the form of a so-called viability gap funding. It was approved by the board of the National Economic Development Authority, led by President Aquino, last Nov. 21.

Other revisions to the project terms include: A government offer to absorb real property taxes; ensuring the integrity of the facility’s structure for a two -year period; permitting a 5-percent fare increase upon completion of the project; and allowing the submission of negative bids.

The Department of Transportation and Communications earlier invited bidders to participate anew in the LRT-1 PPP extension deal, after the initial round failed when bidders either withdrew or submitted noncompliant offers.

The bid deadline has been set on Aug. 28.

There are currently seven groups keen on participating in the Aquino administration’s largest PPP project to date.

The original bidders are Ayala-Metro Pacific, DMCI Holdings, San Miguel Corp. and MTD of Malaysia.

Also joining are Romero family’s Ecorail, which failed to prequalify during the first round of bidding last year, and two new players—Globalvia Inversiones of Spain and Megawide Construction Corp.

During the prebid conference conducted last month, the transport agency reported that it had completed 92.34 percent of the right-of-way acquisition requirement for the Baclaran-Dr. Santos segment; 69.2 percent of the Dr. Santos-Zapote segment; and 84.2 percent of the Zapote-Niog segment.

The LRT-1 project involves the construction of a mostly elevated 11.7-kilometer railway extension from Baclaran terminal to Bacoor in Cavite. The winning bidder will then operate the entire LRT-1 system for a period of 32 years.

The extension project aims to provide an affordable commuting alternative for about four million people living in Parañaque, Las Piñas and Cavite, the DOTC had  said.

The transportation department has so far awarded one PPP project, the P1.72-billion automatic fare collection system, to the Ayala-Metro Pacific consortium.