DOTC cuts proposed LRT subsidy
The Department of Transportation and Communications said it was reducing the subsidy to be offered to the group that would clinch the P65-billion Light Rail Transit Line 1 extension project.
A bid bulletin issued last week showed that the original P6 billion subsidy cap disclosed in February would be lowered to P5 billion.
DOTC said the “reduction of the cap on the subsidy amount is consistent with the deletion of the obligation of the concessionaire to fund the relocation under Section 11.7 of the draft Concession Agreement” involving up to P900 million.
The DOTC added that it would soon issue a revised instruction to bidders in line with the changes.
The bid deadline for the major public private partnership deal, which failed in its first bidding round in August last year, was set on May 28 after bidding groups sought an extension.
The seven groups vying for the project are San Miguel Corp., Ayala Corp. and Metro Pacific Investments Corp., Malaysia’s MTD Group, DMCI Holdings, Megawide Construction Corp., Globalvia Inversiones of Spain and Ecorail.
Despite earlier disagreements, some bidders said the DOTC had been more willing to address bidders’ concerns during this second bidding round.
MTD Philippines president Isaac David noted that improvements to the concession agreement were being made to make the deal more attractive to bidders.
MTD Philippines, whose major shareholder is based in Malaysia, is partnering with SMRT Corp. Ltd., a Singaporean state-run company that operates railways, taxis and buses.
One concession recently allowed by the DOTC was to include a common station for LRT-1 and Metro Rail Transit Line 3 in the bid package, upon the request of several bidders.
Doing so, they said, would give the private sector more control in terms of the construction timetable.
The project, to be located at the property of the Ayala Group’s Trinoma shopping mall in Quezon City, would cost about P1.4 billion and will be shouldered by the government.
The LRT-1 extension aims to provide an affordable commuting alternative for about 4 million people living in Parañaque, Las Piñas and Cavite, the DOTC had said.
Ridership at LRT-1, which served about 470,000 passengers a day last year, was projected to hit about 820,000 once the system is completed in 2019.
The winning bidder will operate the entire LRT-1 system for 35 years, including construction, information on the PPP Center website showed.
