Ayala-Metro Pacific consortium submits lone bid offer for LRT 1 extension

Light Rail Transit (LRT) Line 1 FILE PHOTO

MANILA, Philippines—A lone group made an offer for a massive public private partnership (PPP) deal to extend the Light Rail Transit Line 1 (LRT-1) to Cavite province, the government’s biggest PPP project to date, as some bidders cited unattractive financial returns.

The Light Rail Manila Consortium, comprised of Ayala Corp. and Manuel V. Pangilinan-led Metro Pacific Investments, made the only offer as six other bidders, including conglomerates San Miguel Corp. and DMCI Holdings Inc., withdrew  or did not participate in the auction, Transportation Undersecretary Jose Perpetuo Lotilla said on Wednesday.

The P65-billion LRT-1 extension to Bacoor, Cavite is already on its second bidding round, and the low turnout Wednesday highlights the government’s struggle to attract bids for big-ticket and complicated projects like railways.

The government, however, downplayed the fact that a single company participated in the auction to expand and operate the aging elevated railway despite earlier expectations that more would make offers.

“At the end of the day, only one can win it based on the complexity of the project,” PPP Center executive director Cosette Canilao said in an interview.

She said the bids and awards committee of the Department of Transportation and Communications would evaluate Light Rail Manila Consortium’s qualifications over the next 10 days or less. The department would then proceed to open and evaluate the technical and financial proposals.

She said assuming all requirements were acceptable, the government would be able to award the project next month.

The other groups vying for the project are Malaysia’s MTD Group, Megawide Construction Corp., Globalvia Inversiones of Spain and Ecorail of the Romero family. Groups like MTD and Globalvia had sought added time, a source with direct knowledge of the matter said.

“Very low return,” San Miguel president Ramon S. Ang said in a text message on Wednesday, when asked why the company did not submit an offer.

Light Rail Manila, without Ayala Corp., was also the lone group that submitted an offer in last year’s failed auction but was eventually turned down as it was considered a “non-compliant” bid. San Miguel, DMCI and MTD withdrew from last year’s auction, citing issues with the project’s financial viability. The government later revised the contract to make it more attractive to the private sector.

Ayala managing director John Eric Francia said Wednesday that revisions like the government absorbing costly real property taxes made the LRT-1 deal more attractive for them.

The LRT-1 extension project  involves the construction of 11.7-kilometer track from the terminus of the LRT Line 1 at the Baclaran Terminal, to the Niyog Station at Bacoor. Most of the structure, or a 10.5 km stretch, will be elevated and 1.2 km will be at street level.

Ridership at LRT-1, which served about 500,000 passengers a day last year, was projected to hit a ridership of about 820,000 once the system is complete in 2019. The winning bidder will operate the entire LRT-1 system for a period of 32 years, including construction.

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