Gov’t disputes LRT-1 compensation claim | Inquirer Business

Gov’t disputes LRT-1 compensation claim

/ 12:50 AM February 08, 2016

The private sector consortium that won the Light Rail Transit Line 1 Cavite extension project may have to wait longer, and accept a smaller amount of compensation, following a disagreement with the government on the true condition of the aging railway line.

Transportation Secretary Joseph Abaya said they were still in talks with Light Rail Manila Corp., the joint venture between Ayala Corp. and Metro Pacific Investments Corp., which had sought P1.8 billion in compensation for assuming a railway line that was below standards agreed upon in the concession contract.


Light Rail Manila said the amount was fair and would go toward helping rehabilitate the LRT-1 in Metro Manila that would cost about P10 billion over the next two years. The LRT-1 opened in the early 1980s, making it Southeast Asia’s oldest metro rail system.

“That P1.8 billion is not cast in stone, it is much lower than that,” Abaya told reporters last week, while saying they have yet to arrive at a final figure as talks were still ongoing.


Light Rail Manila bagged the P65-billion public-private partnership (PPP) deal in 2014 to operate the elevated LRT-1 and expand it by 11.7 kilometers to Bacoor, Cavite.

The consortium, which offered to pay the government P9.35 billion for the right to undertake the project, emerged as the sole bidder after other parties backed out, citing the unviability of the PPP deal.

Abaya admitted that the DOTC failed to deliver the project based on what was outlined in the concession agreement and agreed that the winning bidder should be paid. However, he questioned the method Light Rail Manila used in calculating the P1.8-billion figure.

“We have a different way of looking at things,” Abaya said. “This will be a long process of determining the claims. It’s natural in a PPP.”

Hoping to avoid a similar situation in the future, the DOTC is giving more detailed inspections of its LRT-2, whose operations and maintenance contract is being auctioned off also under a PPP scheme.

Ayala and Metro Pacific are also bidding for this project. Other prequalified groups are San Miguel Corp., Aboitiz Equity Ventures and the Consunji family’s DMCI Holdings.

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