10 July 2012, Business Mirror
by Lenie Lectura
A TOTAL of 25 companies have so far indicated their interest to participate in the multibillion-peso priority rail project of the Aquino administration.
The 25 firms that bought pre-qualification documents for the P55-billion Light Rail Transit (LRT) Line 1 extension, operations and maintenance project are San Miguel Infra, Macquarie Group, Mitsubishi Corp., D.M. Consunji Inc., Hanjin Heavy Industries & Construction Co. Ltd., Sumitomo Corp., Leighton Contractors, SyCip Salazar Hernandez & Gatmaitan, FSG Capital Inc., EFC Enterprises, FF Cruz & Co. Inc., Marubeni Corp., BPI Capital Corp., ING Bank, Jorgman Planning & Development Corp., RATP Development, Benchtel Overseas Corp., Comm Builders & Technical Philippines Corp., Lenvoisa Construction Inc., APT Global Inc., Makati Development Corp., Tranzen Group, SERCO Group, Cathay Energy Service Corp. and SYSTRA Group.
During an investors’ briefing and pre-qualification conference yesterday, Secretary Manuel Roxas II of the Department of Transportation and Communications (DOTC) said the number of prospective bidders is expected to balloon as soon as the agency holds an international road show within the month until August.
“It will be sometime in August. We expect that there will be more joining because we want only the best firms with the best qualification insofar as operating and maintaining a busy train system such as the LRT is concerned,” said Roxas, who added that foreign firms are welcome to partner with local groups to participate in the auction.
The road show will be held in London, Madrid, Japan and South Korea to entice more foreign investors worldwide to take part in this project. “We want the countries in Europe and Asia to know about this project. How many projects worldwide amount to about $800 million?” said Roxas, adding that the cost of the project is expected to go down as more investors bid for it.
The project has three components. First, the operation and maintenance of the LRT Line 1. The ridership of the 20.7- kilometer existing Line 1 which spans Baclaran to Quezon City stood at 69 million at end-June this year. It transports over 500,000 passengers daily. The 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 eight stations inclusive of three intermodal facilities, with an option for two future stations. A satellite depot in Zapote will also be constructed.
“The extension is meant to capture a large population base that regularly travels between Cavite and Manila,” Roxas said.
The last component involves the operation and maintenance of the integrated Line 1 train system. Upon completion, the estimated travel time from end to end would be one hour and 10 minutes.
The project cost will be equally split between the Philippine government and the private sector.
The government’s share will be P27.5 billion. The amount will be used to spend for the purchase of up to 39 new car train sets, construction of the satellite depot, among others.
Roxas said the government’s obligation include the turnover of its possession of the existing Line 1 assets for rail operation and maintenance, acquisition and delivery of right-of-way, implement the automated fare collection system (AFCS) project, and ensure the application of periodic fare adjustments.
The winning bidder will be obligated to finance, design and construct the Cavite extension; undertake immediately the operation and maintenance of existing system and the integrated system upon completion of the extension project; undertake future system maintenance and upgrades; assume ridership risk; receive fare box; and undertake an approved commercial development.
Philippine and foreign companies, either individually or grouped in a consortium are welcome to join, said Roxas.
Interested firms that have bought the pre-qualification documents worth P10,000 have until August 22 to submit their requirements.
The pre-qualification of interested bidders and the issuance of bid documents to those who will pre-qualify is set in October. Submission of bids is slated in the first quarter of next year. After which, the notice of award is set to be issued in the second quarter of 2013.
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,” Roxas said.
The DOTC has tapped the IFC (International Finance Corp.) as its transaction advisor, which in turn, has tapped URS and Pinsent Masons as its technical and legal specialists.
Meanwhile, the Metro Pacific and Ayala groups may bring in another member into their railway consortium.
“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 Metro Pacific Investments Corp. President Jose Ma. Lim.
A series of road shows in London, Madrid, Japan and South Korea, is tentatively scheduled sometime in August to entice more foreign investors worldwide to take part in this project.
“We want the countries in Europe and Asia to know about this project. How many projects worldwide amount to about $800 million?” said Roxas, adding that the cost of the project is expected to go down as more investors bid for it.
