LRTA-Lavalin pact paves way for LRT 1 extension funding

The Department of Transportation and Communication (DOTC) said yesterday that Canadian firm SNC Lavalin, the company that will undertake the $600-million Light Rail Transit (LRT) 1 extension project, is negotiating with its creditors to secure financing for the project.

Representatives from SNC Lavalin, the DOTC and Light Rail Transit Authority (LRTA), signed last month the much-delayed implementation agreement that provides for the details of the joint venture SNC Lavalin and LRTA.

The DOTC has also submitted to the NEDA Investment Coordinating Council (ICC) the initial draft of an agreement between the department and the Metro Rail Transit Corp. (MRTC), a private sector consortium, covering the extension of MRT3 from North Ave.-EDSA in Quezon City all the way to Monumento and allowing it to be connected to the LRT.

MRTC will spend around $203 million for the project plus $10 million for cost escalation under a build-transfer (BT) scheme. The agreement covered only the civil works. " The rolling stocks that will cost another $90 million will be covered by a supplemental agreement since there are issues that remain. One of this is the fact that the MRTC has proposed a certain vehicle which our consultants feel varies technically from the specifications," DOTC Undersecretary Wilfredo Trinidad said.

Meanwhile, Trinidad revealed that as far as LRT 1 extension is concerned, the ball is now in the court of SCN Lavalin.

"It is now up to SNC Lavalin to push for the financial closure, which normally takes around eight to 12 months. It is responsible for securing financing for the project and is already negotiating with its creditors to get the needed equity and loans," Trinidad said.

The implementation agreement contains all the details of construction, day to day operation and maintenance of the LRT1 extension, which will start from Baclaran to Dasmariñas in Cavite.

In July last year, discussions between LRTA and Lavalin hit a snag after the LRT1 Extension project cost escalated by 25 percent. The proponents have to raise their proposed fare scheme to ensure the profitability of the project.

The LRT 1 Extension project is a light rail transit system operating on a fully elevated dual track guideway using a technology that is compatible with that of the existing LRT Line 1. – MaryAnn Reyes