MANILA, Philippines – Operations of the P60-billion extension of the Light Rail Transit Line 1 (LRT-1) to Bacoor, Cavite will be subsidized by the government to attract more bidders, Transportation and Communications Secretary Joseph Emilio Abaya said.
Abaya said only one of the four pre-qualified bidders submitted a bid last Aug. 15, prompting the Department of Transportation and Communications (DOTC) to revise the concession agreement for the proposed extension project.
He said the government will shoulder real property taxes of about P2 billion to pay the difference in sudden spike in power rates, the 5 percent increase in fare, and allowing a negative bid.
“The regulatory risk is passed on to the government because we are in a better position to handle regulation. The market risks remain with the concessionaire,” said Abaya.
Abaya said the issue on warranty on the structure was also addressed in the revised agreement, which has been presented to the National Economic and Development Authority-Investment Coordination Committee (NEDA-ICC).
It is currently awaiting the approval of the NEDA Board chaired by President Aquino.
DOTC and the Light Rail Transit Authority (LRTA) declared a failed bidding after only one pre-qualified bidders submitted a bid while other major proponents backed out due to concerns.
MTD-Samsung Group, San Miguel Infrastructure Resources Inc., and DMCI Holdings Inc. all withdrew from the bidding process due to concerns including who will shoulder real estate taxes.
Abaya said the process will “start from scratch,” noting that the pre-qualified bidders will have to join the pre-qualification procedures.
He said several foreign and local firms have also expressed interest in the project
“It is our obligation to maximize competition and to get the best that the world could offer,” he said.
The DOTC will publish the invitation to bid by November, with the deadline for the submission of bids set for the first quarter of next year.
A new south endpoint in Niog, Bacoor, Cavite will open under the LRT’s Cavite Extension project which includes eight stations (with a provision for two future stations), 10.5 kilometers of viaduct, support beams, and 3 intermodal facilities.
The P30 billion construction of the tracks, stations and all its attendant facilities will be bidded out, while the other P30 billion will be provided by the government through official development assistance (ODA).