SMC-led group expects MRT 7 contract awarded within 2015

The planned Metro Rail Transit Line 7 (MRT 7) that runs from Metro Manila to Bulacan is moving forward, with its San Miguel Corp.-backed concessionaire set to announce a contractor before the year ends.

San Miguel president Ramon S. Ang told reporters in a recent interview that the consortium known as Universal LRT Corp. Ltd. was in final state of negotiations and that the awarding of the contract would happen “in the next few months or within the year.”

The project’s final cost, earlier estimated at $1.6 billion, may also be revised, he said.

A unit of Consunji-led DMCI Holdings Inc. was originally tapped by the consortium to build MRT 7, which is envisioned to be a 22.8-kilometer railway linking Quezon City in Metro Manila and San Jose, Bulacan.

That was before a string of delays, mainly on the government’s side, hit the MRT 7 project, which was awarded to Universal LRT before the Aquino administration.

These issues include the release of its performance undertaking, a type of financial guarantee that was finalized last year, and a legal dispute over the location of a railway common station in Quezon City, since MRT 7 is intended to connect with the busy MRT 3.

Universal LRT is not a party to the case. Still, it is involved in talks with the Department of Transportation and Communications (DOTC) as well as SM Prime Holdings Inc. and Ayala Land Inc. to settle the common station issue.

Ang said with the awarding of the construction contract, and the financial close with lenders, his group hoped to start the project which was designed to help alleviate congestion in Metro Manila.

MRT 7 could take three years to complete, DMCI earlier said. The new line would complement three other elevated trains: the MRT 3 and Light Rail Transit Lines 1 and 2, which serve the capital district of about 12 million people.

The three existing lines handle more than a million commuters per day, leaving the rest to use private vehicles or other forms of public transportation.

“It [MRT 7] will be a very good project,” Ang said. “This will help decongest Quezon City and also help the commuting public travel quicker.”

MRT 7 is one of the larger infrastructure plays that San Miguel has ventured into since the launch of an aggressive diversification strategy from its traditional food and drinks business.

San Miguel, which has already made investments in power generation, oil refining, telecommunications, airports and toll roads, announced in March that it would spend about P168 billion in infrastructure projects over the next five years.

In the public private partnership space, it recently won the Naia Expressway Project-Phase 2.

Based on initial plans, MRT 7 was estimated to operate as many as 108 rail cars in a three-car train configuration. Capacity was projected at 448,000 passengers a day, but will eventually be expanded to accommodate as many as 850,000 passengers daily.