NEDA to study changes in LRT 1 Ext project

MANILA, Philippines - The Department of Transportation and Communications (DOTC) is set to present the proposed changes to the concession agreement of the P60-billion Light Rail Transit line 1 (LRT1) Cavite extension project to the board of the National Economic and Development Authority (NEDA) chaired by President Aquino.

Transportation Secretary Joseph Emilio Abaya said amendments to the agreement would be discussed by the NEDA Board in the second week of November.

 â€œI heard NEDA has scheduled it on the second week of November,” Abaya stressed.

There were five major issues addressed in the revised agreement that include real property tax, power rates, warranty on the structure, fare adjustments, and allowing a negative bid.

The government agreed to shoulder the real property taxes estimated at about P2 billion, to pay the difference in the sudden spike in power rates, the five percent increase in fare prior to the 100 percent completion of the project, and allowing bidders to submit a negative bid.

Aside from the real property tax, the government would also have to pay the excessive increase in power rates as well as the higher fares per passenger. It would also guarantee the structural integrity of the extended LRT1 line all the way to Cavite.

The revisions to the concession agreement, he said, have been presented to the NEDA-Investment Coordination Committee (NEDA-ICC) but would still have to be approved by the NEDA Board.

 â€œThe President will be there and he has his own questions. We are prepared for that,” Abaya explained.

It would be recalled that the DOTC and the Light Rail Transit Authority (LRTA) declared a failed bidding after only one of the four prequalified bidders submitted a bid last Aug. 15 while other major proponents backed out due to concerns about the viability of the project.

Three bidders - MTD-Samsung Group, San Miguel Infrastructure Resources Inc., and DMCI Holdings Inc. - withdrew from the process due to concerns including on who would shoulder the real estate taxes.

The Light Rail Manila Consortium managed to beat the Aug. 15 deadline and submitted its technical and financial proposals. The consortium is led by First Pacific’s infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) but its partner Ayala Corp. through AC Infrastructure Holdings Corp. decided not to participate in the bidding.

“Essentially we start from scratch,” Abaya said reiterating that the prequalified bidders would have to join the prequalification procedures.

Aside from the four prequalified as well as two disqualified bidders, the DOTC chief said several foreign and local firms have expressed interest in the project

“It is our obligation to maximize competition and to get the best that the world could offer,” he added.

According to him, the DOTC would publish the invitation to bid as early as next month and the deadline for the submission of bids would be some time in the first quarter of next year.

The Cavite Extension project would increase the span of Line 1 from 20.7 kilometers to 32.4 kilometers and will have a new south endpoint in Niog, Bacoor, Cavite. The extension project includes eight stations (with provision for two future stations), 10.5 kilometers of viaduct, support beams, and 3 intermodal facilities.

Approximately 10.5 kilometers of the Cavite Extension System would be elevated and 1.2 kilometers would be at grade level. The government has set aside P30 billion to acquire up to 39 new Light Rail Vehicles for this project.

The extension would open up the Line 1 services to the nearly 4 million residents of Parañaque, Las Piñas, and the Province of Cavite.