Ayala says partnership with MPIC for rail projects still on

MANILA, Philippines - Listed conglomerate Ayala Corp. said its partnership with infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) has not been dissolved after it decided not to participate in the P60-billion light rail transit line 1 (LRT1) extension project.

Eric Francia, managing director of Ayala Corp., told The STAR that the joint venture entered between the company and MPIC last April is still on as the conglomerate’s decision only covers the LRT1 project and not future light tail projects.

“This decision is only for this specific LRT1 bid. We will continue to pursue future rail projects, and our framework agreement with MPIC is still live,” Francia said in a text message.

Last April, the Ayala Group and MPIC signed a memorandum of agreement forming an exclusive strategic partnership to jointly pursue and develop light rail projects to make Metro Manila’s public transport system at par with Japan and Hong Kong.

Under the agreement, Ayala and MPIC would each own half of the light rail projects and the real estate development component that comes with projects under the government’s public-private partnership (PPP) program.

In a last minute announcement, Ayala informed the Philippine Stock Exchange (PSE) last Aug. 15 that the company through AC Infrastructure Holdings Corp. was not joining the MPIC-led Light Rail Manila Consortium in bidding for the LRT1 extension to Niog in Bacoor, Cavite from Baclaran in Pasay City.

This puts in peril the chances of the Light Rail Manila consortium in bagging the project as the terms of the bidding of the Department of Transportation and Communications (DOTC) states that the consortium members of the prequalified bidders should be intact until the end of the bidding process.

MPIC president and chief executive officer Jose Maria K. Lim told reporters last Thursday that the infrastructure conglomerate would have to reassess its joint venture with the Ayala Group that is supposed to cover all the railway ventures of the tandem.

“We haven’t discussed yet.

It is supposed to cover all railways. We will probably want to review with them how to proceed in the future. I can’t confirm one way or another,” Lim said.

The consortium was the lone prequalified bidder that submitted technical and financial bids to the DOTC’s bids and awards committee (BAC) last Thursday while three other prequalified bidders — MTD-Samsung Group, San Miguel Infrastructure Resources Inc., and DMCI Holdings Inc. — withdrew their participation in the bidding process.

DOTC undersecretary Jose Perpetuo Lotilla said the agency’s BAC would make a decision this week whether or not to declare a failed bidding as the technical and financial bids submitted by the Light Rail Manila consortium was non-compliant.

For his part, Transportation Secretary Joseph Emilio Abaya said the government is looking at revising the terms of the P60 billion LRT1 Cavite extension project to make sure that construction of the Aquino administration’s biggest infrastructure project would start as scheduled in the second half of next year.

“The BAC is looking at the possibility of extending the bidding process and reevaluating the existing terms to further address the commercial issues raised by the pre-qualified bidders,” Abaya stressed.

For his part, SMC president Ramon S. Ang said SMC Infra Resources Inc. decided to withdraw from the bidding for the LRT line 1 extension as the project was not viable based on the existing terms.