LRT 1 extension: MPIC-Ayala offers P9.35-B premium

MANILA, Philippines - The Light Rail Manila Consortium led by infrastructure giant Metro Pacific Investments Corp. (MPIC) and conglomerate Ayala Corp. offered yesterday to pay a P9.35-billion premium for the P65 billion Light Rail Transit line 1 (LRT1) Cavite Extension project.

Transportation Secretary Joseph Emilio Abaya told reporters that the financial bid of the Light Rail Manila Consortium was above the expectation of the Department of Transportation and Communications (DOTC) which offered a subsidy or viability gap funding of P5 billion for the public private partnership (PPP) project.

 â€œIn fact we are willing to give a subsidy or VGF. So we were ready but it’s a good thing the proponent saw it in a different light. They see more potential than what the government sees,” Abaya said.

The DOTC expects to get P25.55 billion from three major infrastructure projects including P9.35 billion from the LRT1 Cavite extension project, P14.4 billion from the Mactan-Cebu international airport project, and the P1.8 billion automated fare collection system (AFCS).

“So that is more than P25 billion that the private sector is paying the government and we get a free airport, a free LRT1 extension, and a free single ticketing system,” Abaya said.

Atty. Michael Arthur Sagcal, DOTC spokesperson, said the agency’s Bids and Awards Committee (BAC) has approved the technical bid of Light Rail Manila Consortium resulting to the opening of the financial bid yesterday.

The lead member of the group is MPIC Light Rail Corp. of infrastructure giant Metro Pacific Investments Corp. (MPIC) with 55 percent while other members  include Ayala Corp.’s AC Infrastructure Holdings Corp. with 35 percent and Macquaire Infrastructure Holdings (Philippines) Pte Ltd. with 10 percent.

She pointed out that the private sector is confident about the viability of the PPP projects being offered by the Aquino administration.

MPIC president Jose Maria K. Lim said the consortium is ready to make a 20 percent of the premium payment before the signing of the concession agreement for the PPP project.

Lim said the balance of 80 percent would be paid during the 32-year concession period.

 â€œWe are expecting the right of way to start in 2015 and we have to complete the construction of the entire extension by 2020,” he added.