Awarding of LRT-1 PPP set tomorrow

Light Rail Transit (LRT) Line 1 FILE PHOTO

The bids and awards committee of the Department of Transportation and Communications (DOTC) issued Monday a recommendation to award the P65-billion Light Rail Transit Line 1 (LRT-1) public private partnership (PPP) deal, a key step before the sole bidding group, led by Metro Pacific Investments Corp. and Ayala Corp., can win the project.

DOTC spokesperson Michael Sagcal said in an interview that the recommendation was given to the board of the Light Rail Transit Authority, which will convene on Wednesday. The LRTA board’s approval is required before the DOTC bids and awards committee can issue a notice to award.

An award is important as it is a requirement for the LRT-1 PPP deal, which calls for the extension of the existing line by 11.7 kilometers to Bacoor, Cavite, to move forward. The PPP deal is among the biggest under the Aquino administration’s flagship PPP program and also one of the most complex, according to bidders.

An award was expected as early as last week but both the DOTC-BAC meeting and the LRTA meeting were cancelled Wednesday when Typhoon “Glenda” (international codename: Rammasun) struck the country, including Metro Manila.

LRTA is chaired by Transportation Secretary Joseph Abaya and its other members include Cabinet secretaries across the finance, economic and road infrastructure departments.

Only the joint venture between Ayala and Metro Pacific made a bid for the LRT-1 PPP, which involves the construction of an extension railway line to Bacoor, Cavite, and the operations of the aging railway.

Six other interested groups, which included San Miguel Corp., Malaysia’s AlloyMTD and DMCI Holdings Inc., did not participate in the second auction as some cited its unattractive financial prospects.

The government, in this case, took several more steps in evaluating the offer of Ayala-Metro Pacific’s Light Rail Manila Consortium given that there was only one bidder. These steps included securing the approval of the National Economic and Development Authority.

Light Rail Manila offered P9.35-billion for the right to expand and operate the entire LRT-1 for a period of 32 years.