Fate of largest PPP deal now up to P-Noy’s successor

THE FATE of the government’s largest public private partnership deal, a railway project linking Metro Manila to Legazpi City in Albay, rests in the hands of the next administration after the Department of Transportation and Communications (DOTC) admitted an award may no longer happen under the term of President Aquino.

Nonetheless, conglomerates interested in the P171-billion project expressed they were still backing the deal, formally known as the South Line of the North-South Railway PPP project.

The project was initially expected to begin full operations by 2020. However, the target may no longer be realistic since the pre-qualification process has yet to commence.

“Frankly, I think not,” Transportation Undersecretary Jose Perpetuo Lotilla said when asked about the possibility of awarding the project before the middle of next year.

The country has already entered the election season. Aquino’s bet, former DILG Secretary Mar Roxas, is lagging behind in surveys.

The DOTC recently moved the submission of qualification documents to Feb. 1, 2016 from Dec. 1 this year. It said this was to give bidders more time to prepare their documents.

Apart from the project being tied to whoever wins the upcoming presidential elections, other issues remain. Transportation Secretary Joseph Abaya said this includes the line’s integration with a northern train line to Bulacan province.

Abaya said the DOTC was also considering alternative funding from the Japan International Cooperation Agency (Jica) for the South Line PPP. The government has just sealed last week a $2-billion loan agreement with Jica for the 37-kilometer northern phase that will link Manila to Malolos, Bulacan.

But that decision, which Abaya said has yet to be made, would involve another board approval from the National Economic and Development Authority, spelling further delays.

The bigger south line PPP train project, involving 653 kilometer of railway lines, is seen to help decongest Metro Manila’s roads and improve connectivity to areas outside the capital district.

Those that have formally expressed their interest in the project are: San Miguel Corp., Ayala Corp. and Manuel V. Pangilinan-led Metro Pacific Investments Corp.

“Beyond the pre-qualification stage, we would need to get guidance from the next administration,” John Eric Francia, Ayala managing director, said last week. He said Ayala intends to qualify and “review initial set of documents.”

Raoul Eduardo Romulo, chief financial officer and treasury head of San Miguel Holdings Corp., said: “The viability of the project will be determined by the strength of the contract as part of our assessments and due diligence we always conduct.”

Jose Ma. Lim, Metro Pacific president, also said they “continue to be interested” in the railway deal. “We have exchanged views with them [DOTC] and await their final terms and guidelines.”