P65B LRT-1 Cavite PPP deal awarded to Manny V. Pangilinan-backed group

Light Rail Transit (LRT) Line 1. FILE PHOTO

The Department of Transportation and Communications (DOTC) ordered the award of a P65-billion railway public-private partnership (PPP) contract to a sole bidder late on Friday after weighing the legal implications for weeks.

The project would link Metro Manila to Cavite province through an elevated light-rail service.

Michael Sagcal, spokesperson for the DOTC, said in a text message that the LRT 1 Cavite extension PPP, which went through two auctions due to poor investors’ reception, was awarded to Light Rail Manila Consortium.

MVP-backed group

Light Rail Manila, which is backed by Manuel V. Pangilinan-led Metro Pacific Investments Corp. and Ayala Corp., confirmed the award, a source with knowledge of the deal said.

The decision marks the eighth and largest PPP deal to be awarded by the Aquino administration, which has been trying to bolster infrastructure investment through the PPP program to support gains in the broader economy.

It is also the third to be won by Ayala, which bagged the government’s first PPP project, the 4-kilometer Daang-Hari SLEx Link Road, and the second to be won by Metro Pacific.

Sagcal said Light Rail Manila had 20 days to comply with the postaward requirements, after which a concession agreement could be signed.

The award suggested that legal challenges the DOTC was earlier worried about had been cleared.

Light Rail Manila had been poised to win the LRT 1 deal in late July before the SM Group obtained a Supreme Court order temporarily halting the transfer of the location of a common station mentioned in the PPP contract.

SM Prime Holdings said it was not interested in stopping the PPP process, as it was only protecting its interests based on a 2009 agreement.

Nevertheless, the DOTC took a step backward and decided to review whether it could award the project despite the temporary   restraining order.

The award means Light Rail Manila can start the process that will allow the construction of a new 11.7-km extension of LRT 1, currently one of Metro Manila’s busiest railway lines serving about half a million people daily.

Under the deal, Light Rail Manila will also operate the entire LRT 1 line for 32 years.

More deals coming

Much is riding on the success of these big-ticket PPP deals, partly because investors will look to how these are implemented ahead of much larger infrastructure contracts the government is seeking to auction off in the next two years.

These include the country’s first subway system, valued at $3 billion, linking Metro Manila’s central business districts, and a “north-south commuter railway” valued at $6 billion, information provided by the PPP Center showed.

Originally posted: 9:19 pm | Friday, September 12th, 2014

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