DOTC slashes subsidy to winning bidder of LRT expansion project

By Lawrence Agcaoili, The Philippine Star

Posted at Apr 28 2014 12:09 PM | Updated as of Apr 28 2014 08:09 PM

MANILA, Philippines - The Department of Transportation and Communications (DOTC) has slashed the P6-billion subsidy to be extended to the winning bidder of the P65 billion Light Rail Transit line 1 (LRT1) Cavite extension project.

DOTC undersecretary Jose Perpetuo Lotilla said the agency’s special bids and awards committee (SBAC) would issue the revised instructions to bidders (ITB) for the public private partnership (PPP) project containing the amendments.

“A revised ITB will be issued following this bid bulletin,” Lotilla stated in General Bid Bulletin 12-2014.

One of the amendments is the reduction of the ceiling of the subsidy amount to P5 billion instead of P6 billion.

The DOTC said the reduction of the subsidy is consistent with the removal of the obligation of the concessionaire to fund the relocation under Section 11.7 of the draft Concession Agreement that would entail expenses of up to P900 million.

Last Feb. 10, the DOTC announced that the cap of the subsidy would be P6 billion.

After a failed bidding last Aug. 15, the National Economic and Development Authority (NEDA) Board chaired by President Aquino approved last Nov. 21 the revised terms for the project including the payment of real property taxes (RPT) by the government.

The government also approved a five-percent fare increase upon completion of the project, and allowed the submission of negative bids.

The DOTC has extended the deadline for the submission of bids for by another month to May 28 instead of April 28.

The groups interested in joining the bidding include the tandem of infrastructure giant Metro Pacific Investments Corp. and conglomerate Ayala Corp. through the Light Rail Manila Consortium, construction giant DM Consunji Inc., Filipino-owned Megawide Construction Corp., Spanish-owned Globalvia Inversiones SAU, SMC Infra Resources Inc. of diversified conglomerate San Miguel Corp., Eco Rail Services Inc. of businessman Reghis Romero II, and Malaysian-owned MTD Philippines Inc.