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SMC given 2 weeks to close funding deal

Failure to meet deadline to further delay MRT-7 project
/ 12:40 AM February 05, 2016

A San Miguel Corp.-backed consortium that is seeking to build the Metro Rail Transit Line 7 has two weeks to close a deal with lenders or face another round of delays, Transportation Secretary Joseph Abaya said yesterday.

Abaya told reporters in a press conference that SMC’s Universal LRT Corp. Ltd. has until Feb. 19, 2016 to finalize the financing for the massive elevated train line linking Metro Manila and Bulacan province.  Its original cost was estimated at $1.6 billion.

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If Universal LRT fails to do so, the project will need a fresh approval from the National Economic and Development Authority, Abaya said.

SMC president Ramon S. Ang said in a text message yesterday that his group “will meet” the deadline.

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“The 19th (of February) is a clear deadline,” Abaya said. “We are hoping they can make the financial close before this.”

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 involve the release of its performance undertaking, a type of financial guarantee, as well as 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.

The Department of Finance in 2014 issued the terms for the financial guarantee of the MRT-7, which is envisioned to be a 22.8-kilometer railway linking Quezon City in Metro Manila and San Jose, Bulacan.

The common station dispute, however, has yet to be resolved.

A unit of Consunji-led DMCI Holdings Inc. had won the project’s construction contract in 2012.

But years of delays prompted SMC to change its contractor as the construction cost assumptions were revised. SMC held a new bidding round in 2015, although it has yet to disclose the winning contractor.

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Ang said the group intended to proceed with the MRT-7, which would be the conglomerate’s first railway project.

SMC is separately eyeing public private partnership contracts for the Light Rail Transit Line 2 and the P171-billion south line of the North South Commuter Railway.

MRT-7 could take three years to complete, DMCI said earlier. 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.

Based on initial plans, the MRT-7 is 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.

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TAGS: Business, deal, MRT, MRT-7, project, San Miguel, SMC
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