San Miguel, Ayala-MPIC, 23 others eye LRT-1 extension project
MANILA, Philippines - The country's largest business groups have expressed interest to participate in the bidding for the operations and maintenance (O&M) project of the Light Rail Transit (LRT) line 1 extension, which will connect Cavite and capital Manila.
This P55 billion infrastructure project will be the second project for bidding under the public-private partnership (PPP) scheme of the Aquino government. Transportation Secretary Manuel Roxas described this as the “largest single ticket in [the] infrastructure portfolio of President Benigno Aquino.”
On Tuesday, July 10, San Miguel Corp. as wells as the joint venture of Ayala Corp. and Metro Pacific Investments Corp. (MPIC) were among the 25 firms that purchased pre-qualification documents for the P55-billion rail project, which the Transportation Department is spearheading.
The project is meant to "capture a large population base that regularly travels between Cavite and Manila,” said Transportation Secretary Manuel Roxas. When completed, the estimated travel time from end-to-end would be one hour and 10 minutes.
“There is a possibility that we may bring in another member with technical expertise in the railway project. We are currently discussing it. We will make the proper announcement soon,” said MPIC president Jose Ma. Lim. The law firm Sycip Salazar Hernandez & Gatmaitan reportedly represented the Ayala-MPIC joint venture.
The 25 firms that bought the pre-qualification documents were:
1. San Miguel Infra
2. Macquarie Group
3. Mitsubishi Corp.
4. D.M. Consultant, Inc.
5. Hanjin Heavy Industries & Construction Co. Ltd.
6. Sumitomo Corp.
7. Leighton Contractors
8. Sycip Salazar Hernandez & Gatmaitan
9. FSG Capital Inc.
10. EFC Enterprises
11. FF Cruz & Co. Inc.
12. Marubeni Corp.
13. BPI Capital Corp.
14. ING Bank
15. Jorgman Planning & Development Corp.
16. RATP Development
17. Benchtel Overseas Corp.
18. Comm Builders & Technical Philippines Corp.
19. Lenvoisa Construction Inc.
20. APT Global Inc.
21. Makati Development Corp.
22. Tranzen Group
23. SERCO Group
24. Cathay Energy Service Corp.
25. SYSTRA Group
Discussed during an investors’ briefing and pre-qualification conference held Tuesday morning, July 10 are the project's two components.
First, the operation and maintenance of the existing 20.7 kilometer (km) LRT line 1 from Baclaran to Quezon City. It had transported 69 million passenger-riders as of June 30, 2012. Over 500,000 passengers ride the rail line daily.
Second component is the construction of an additional 11.7-km elevated railway system from Baclaran station of Line 1 all the way to Bacoor in Cavite City. It will have 8 stations inclusive of 3 intermodal facilities, with an option for two future stations. A satellite depot in Zapote will also be constructed.
Below are the expected timelines for the project:
- August - The government will hold a series of roadshows in London, Madrid, Japan and South Korea to entice more foreign investors to take part in the project. “We want the countries in Europe and Asia to know about this project. How many projects worldwide amount to about US$ 800 million?” said Roxas, adding that the cost of the project is expected to go down as more investors bid for it. He said foreign firms are welcome to partner with local groups to participate in the auction.
- August 22 - Deadline for those that have purchased the pre-qualification documents worth P10,000 to submit their requirements. That is also the time the parties reveal what are the parties or the members of of a concessionaire that are vying for the contract.
- October - Schedule for the pre-qualification of interested bidders and the issuance of bid documents to those who will pre-qualify. The pre-qualification process ensures that the companies or the consortia to be formed have the required financial, technical, and management capability to carry out the project.
- 1st quarter 2013 - Deadline for submission of bids.
- 2nd quarter 2013 - DOTC will issue notice of award.
This project was initially planned to be bidded out last year. After a long wait, the Transportation Department issued an invitation to interested private sector players to pre-qualify and bid on June 4.
Roles of government and contractor
The government and private contractor will equally split the estimated P55 billion project cost. The government will spend its P27.5 billion share to purchase up to 39 new car train sets, construction of the satellite depot, among others.
Roxas said the government’s obligation include the
- turn-over of the existing line 1 assets for rail operation and maintenance
- acquisition and delivery of right of way
- implementation of the automated fare collection system (AFCS) project
- ensure the application of periodic fare adjustments
The winning bidder, on the other hand, is responsible for:
- the finance, design and construction of the Cavite extension
- the immediate operation and maintenance of existing system and the integrated system upon completion of the extension project
- undertaking the future system maintenance and upgrades
- assuming ridership risk
- receiving fare box
- undertaking an approved commercial development
Automated fare collection
Roxas said the government will hold another auction for the centralized AFCS. “For the LRT fares, we will move from zone-based fare to boarding-plus-a-distance fare scheme. There will also be a periodic fare adjustments over the concession period. But the government will hold a separate bidding for the AFCS. This project shall be tendered parallel to line 1."
The Transportation Department has taped the International Finance Corporation (IFC) as its transaction advisor. IFC, in turn, has tapped URS and Pinsent Masons as its technical and legal specialists.
10 July 2012