Bidding for LRT-1 extension moved to 2014

Transportation Secretary Joseph Abaya: No intended delays

The Department of Transportation and Communications (DOTC) is targeting to auction the P60-billion extension of the Light Rail Transit Line 1 (LRT-1) to Cavite province, its biggest public-private partnership deal, by the first quarter of 2014, Transportation Secretary Joseph Abaya said on Tuesday.

The project, which the government earlier projected would be re-auctioned before the end of the year, was delayed due to scheduling issues. The auction failed last Aug. 15 as three bidders withdrew and one submitted a noncompliant offer. The bidders backed because of the project’s lack of viability in the way the original terms were structured.

“The [bidding] is flexible between January and February [2014]. We need to go up to Neda (National Economic and Development Authority) and talk about changes. Once we get that, we will do a single-stage procurement process,” Abaya said at the sidelines of the Philippines’s mid-year economic briefing.

“It’s basically the schedule and waiting for Neda to convene,” Abaya added, citing issues like the ongoing clash in Zamboanga. “These are not intended delays.”

The talks with Neda are aimed at smoothing over concerns raised by the private sector. These include real property taxes, the predictability of power rates, tariff prices, warranty on the existing structure and allowing a negative or subsidy bid. The DOTC was earlier targeting the LRT-1 expansion project to begin construction by the second half of 2014.

The LRT-1 extension will involve the construction of a 10.5-kilometer elevated section while 1.2 km will be at street level. It aims to increase average weekday ridership from 560,000 passengers to 820,000 passengers by 2015.

The whole stretch of the integrated LRT-1, with a total length of 32.4 km, will be operated and maintained by the private proponent for a period of 35 years, including construction, information on the PPP Center website showed.

Only Metro Pacific Investments Corp., through Light Rail Manila Consortium, submitted a bid for LRT-1 expansion last Aug 15.

Metro Pacific’s partner Ayala Corp. did not participate while three other consortiums led by San Miguel Corp., DMCI Holdings and MTD-Samsung of Malaysia and South Korea withdrew their bids.

Abaya, who reiterated that PPPs were a complicated process when addressing a query on perennial delays, said they were looking to proceed with the auctions for the P17.5-billion Mactan-Cebu International Airport and a P1.72-billion smart card system for Metro Manila’s railways by next month.

Both projects were originally due to be auctioned in late August. However, this was pushed back as the DOTC needed more time to fine-tune their respective concession agreements.