DOTC scraps LRT south extension project

Department of Transportation and Communications (DOTC) Secretary Leandro Mendoza said they have left the implementation of the Light Rail Transit Line 1 South Extension Project (LRT-1 SEP) from Baclaran to Bacoor, Cavite to the next administration even as he welcomed any Senate inquiry into its alleged irregularities.

Mendoza said the DOTC technical working group and the Light Rail Transit Authority (LRTA) board of directors, which he headed as DOTC secretary, “were very cautious” in conducting “due diligence” reviews of four proposals submitted to them by interested financiers and contractors.

“We have stopped the due diligence because we decided that there’s no more time for it. The project has a gestation period of two years and there’s no more time. So we decided to leave it to the next administration,” Mendoza said.

DOTC said four proposals were submitted to the DOTC to build the LRT-1 SEP: the SNC Lavalin proposal, the International Finance Corp. (IFC) proposal, the Shanghai Group Corp. for Economic and Technological Cooperation (SFECO) proposal and the R-I Holdings Inc. or EcoRail Transport Services Inc. proposal.

Mendoza made the statement during an interview Friday at the groundbreaking ceremonies for the P2.5-billion build-rehabilitate-operate-transfer Caticlan domestic airport upgrade project to be undertaken by the Caticlan International Airport Development Corp.

Mendoza clarified that contrary to allegations made by STAR columnist Jarius Bondoc, the DOTC had not signed any contract with a Chinese firm for the project.

Mendoza pointed out that they have not even submitted the project to the National Economic Development Authority Investment Coordination Committee (NEDA-ICC) for review.

DOTC Undersecretary for Rail Transport Guiling Mamondiong said the LRT 1 south extension project was still undergoing a rigorous evaluation and approval process by the DOTC and the NEDA, hence, no contract has been signed yet.

Mamondiong said that on March 24, 2009, the NEDA requested the DOTC and LRTA to evaluate the cost-effectiveness of various possible sources of financing for the LRT-1 SEP including, among others, official development assistance (ODA) from Japan, loans from Korea and private sector financing, and make recommendations.

On Dec. 9, 2009, NEDA released the results of the study and cited that the most cost-efficient mode to implement the project is through the ODA.

“Also, contrary to reports, the project cost involving the Chinese ODA proposal by SFECO is $1.016 billion, not $1.78 billion,” he said.

However, he said they are trying to see where they can reduce the project cost.

Mamondiong said the IFC proposal submitted in August 2008 “has a project cost which increased from $682.2 million to $1.78 billion. This did not materialize due to the increase in project cost.” The IFC is the private investment arm of the World Bank.

He also clarified that the LRTA will operate the extended LRT system (about 32.4 kilometers) and not the SFECO, as reported.

The DOTC said the LRT Line 1 South Extension Project involves extending the existing 15-km LRT Line 1 system southward by approximately 11.7 kilometers. The extension will start from the Baclaran terminal of the existing Line 1 and will traverse Parañaque and Las Piñas up to Bacoor, Cavite. 

It includes the construction of eight new passenger stations with a provision for two additional passenger stations. The construction of the Cavite Extension Line is divided into two phases —the first phase shall be from Baclaran to Dr. Santos Avenue Station (Phase 1A) and the second phase shall be from Dr. Santos Avenue to Niyog Station (Phase 1B).