Business World, 04 June 2012
A THIRD public-private partnership (PPP) project — a P60-billion deal involving the extension and management of Metro Manila’s Light Rail Transit Line 1 (LRT-1) — has been rolled out by the government.
Bid invitations and contract details for the build-transfer — operate project, which includes the railway’s 11.7-kilometer expansion to Cavite from its current Baclaran terminus — were issued yesterday.
The winning bidder will be named next year, with the contract scheduled to be awarded by April at the latest.
The project involves the operation and maintenance (O&M) of the railway, design/construction/integration of the Cavite extension, and program for continued system enhancements.
“International companies can participate in all components, except for O&M. The entity operating a public utility should follow nationality requirements as prescribed by the Philippine Constitution and existing laws,” the Transportation department said in a notice published yesterday.
Interested investors can purchase invitation documents for P50,000, the department added, setting an August 22 deadline for the submission of initial requirements.
Bidders will be pre-qualified “based on minimum legal, technical and financial requirements … Only bidders who pre-qualify or are deemed eligible should be invited to prepare and submit their technical and financial proposals…”
Interested parties or consortiums should be registered with corporate regulators.
They should have built an elevated metropolitan passenger railway, bridge or a viaduct of at least six kilometers and have at least five years of experience in operating/maintaining a rail system.
A prospective bidder should also have a net worth of at least P10 billion, annual income of at least P3 billion as of end-2011 and the capability to raise a loan of at least P20 billion.
A pre-bid conference will be held in October, with offers to be submitted by January next year. The awarding and signing of the concession agreement will be in March or April .
Turnover of the existing line’s O&M will be on May 2013. Approval of the extension’s detailed engineering is scheduled for September that year, with construction to start the following month. Partial operations are set for the third quarter of 2015.
The government will also be bidding out the purchase of additional rolling stock via a separate contract. Delivery of the new carriages, and full operation of the extended LRT-1, is being eyed for the third or fourth quarter of 2017. Turnover of the system to the government is targeted in 2042-2047.
Under the build-transfer-operate format, the winning bidder will assume the risks of construction and operation even as ownership is transferred to the government. The state will take care of securing the needed right of way, contribute some assets and rehabilitation of the existing line.
Proposed fares will be disclosed during the release of the terms of reference and ridership will not be guaranteed by the government.
“The Republic of the Philippines shall not guarantee the ridership level but shall ensure the fare will be adjusted based in pre-agreed formula to be defined in the bidding document,” the Transportation department said.
Diversified conglomerate San Miguel Corp. has expressed interest in the rail project while Metro Pacific Investments Corp. and Ayala Corp. have formed a consortium that will participate in the auction.
Only one PPP project — the P1.96-billion Daang Hari-Southern Luzon Expressway link won by Ayala Corp. last December — has been awarded since the infrastructure program was launched in 2010.
Pre-qualification, meanwhile, has been completed for the P10.04-billion PPP for School Infrastructure Project that was rolled out earlier this year.
