Traders urge government to pursue Manila-Laguna rail project

By Lorenz S. Marasigan, BusinessMIrror

Posted at Jun 17 2014 07:24 AM | Updated as of Jun 17 2014 03:24 PM

MANILA - Private-sector sentiment on the proposed multibillion-dollar railway system that would connect Manila to Laguna is generally positive, with an infrastructure firm reminding the government to make the public-private partnership (PPP) deal commercially and economically viable for both the government and the investors.

Business groups polled by the BusinessMirror perceive the $7-billion commuter rail a much-needed project that the government must pursue, saying that this would effectively bring the country’s competitiveness rankings a notch up.

American Chamber of Commerce Senior Adviser John D. Forbes said adding train systems to the three current lines is the best solution to the growing congestion in the metropolis.

“Rail is the best solution to traffic congestion and is environmentally friendly. We badly need big, bold projects like this,” he said, noting that the government should also invite foreign parties to join the bidding for the deal.

“It should be open to foreign firms and advertised internationally,” Forbes stressed.

Makati Business Club President Peter Angelo V. Perfecto added that the lack of infrastructure has been a major driver why the country has been lagging behind its neighbors like Malaysia, China and Thailand in terms of global competitiveness rankings.

“Mass-transit systems and other transport infrastructure projects are key to addressing the infrastructure gaps that have weighed down our competitive rankings. This project is a most welcome development and we hope that more projects whether by the government alone or via a PPP arrangement will start rolling out at an accelerated pace,” he said.

Melito S. Salazar, former president of the Management Association of the Philippines, noted that the railway system should be at par with global standards, noting that mass-transportation systems in general should be upgraded to match those of other countries.

The sanctity of the contract, however, should also be ensured, MTD Philippines Inc. President Isaac S. David said. The businessman called on the government to package the key infrastructure deal attractively to generate private-sector support. This includes making the deal more commercially viable for the concessionaire.

“The approved fare and implementation of such fare—that needs to be ensured to attract investors. Also the clearing of right of way is paramount,” David said.

Philippine Chamber of Commerce and Industry President Alfredo M. Yao stressed that the government must assure that investors would see returns come during the concession period.

“We are committed to help the government in this project,” he said.

The commuter rail is a 90-kilometer elevated railway system that will link the northern and southern Luzon, and is seen to serve the mass base of Mega Manila. It will be the first mass transportation that will serve as far north in Malolos, Bulacan, and as far south in Calamba, Laguna.

Japan International Cooperation Agency is currently conducting a feasibility study for the said line that will interconnect three regions: the National Capital Region, Region 3 and Region 4.

Once the study is completed, the contract will be presented to the National Economic and Development Authority (Neda) Board, which is chaired by President Aquino.

The government aims to auction off the multibillion-dollar key infrastructure deal as early as the fourth quarter this year.

The government has awarded seven PPP contracts since the flagship infrastructure program was launched in late-2010, involving:

P1.96-billion Daang Hari-South Luzon Expressway project bagged by Ayala Corp. in 2011;

P16.42-billion first phase of the PPP School Infrastructure Program (PSIP), which went in 2012 to the consortium formed by Megawide Construction Corp. and Citicore Holdings Investment Inc., as well as the BF Corp.-Riverbanks Development Corp. consortium;

P15.68-billion Ninoy Aquino International Airport expressway, given to San Miguel Corp. unit Vertex Tollways Development Inc. in 2013; and

P3.86-billion PSIP Phase II contract, partially awarded last year to Megawide and the BSP & Co. Inc.-Vicente T. Lao Construction consortium;

P5.69-billion Modernization of the Philippine Orthopedic Center project that went to the Megawide-World Citi Inc. consortium also last year.

P1.72-billion Automatic Fare Collection System contract awarded to the AF Consortium of Ayala and Metro Pacific Investments Corp. in January;

P17.5-billion Mactan Cebu International Airport New Passenger Terminal project bagged in April by Megawide Construction Corp. and GMR Infrastructures Ltd.

It is poised to award the P64.9-billion Light Rail Transit Line 1 Cavite Extension contract to lone bidder Light Rail Manila Consortium of the Metro Pacific Investments Corp. and Ayala Corp.

The public works agency also aims to award the P35.2-billion Cavite-Laguna Expressway contract to Team Orion of the Aboitiz Land Inc. and Ayala Corp.