San Miguel, MTD want govt to amend LRT 1 project terms
MANILA, Philippines - San Miguel Corp. (SMC) and MTD Capital Bhd. of Malaysia will renew their interest to take part in the P60-billion Light Rail Transit (LRT) Line 1 Cavite extension project if the government will address their concerns by amending some of the terms of the concession agreement.
“We will join if fare collection is included,” said SMC President Ramon Ang in a text message.
SMC Infra Resources Inc. was prequalified in the biggest infrastructure project yet under the Aquino administration’s public-private partnership (PPP) scheme. It, however, withdrew its interest to participate because “the project itself is not viable,” a source said.
SMC, according to a BusinessMirror source, raised concern on the P 1.72-billion Contactless Automatic Fare Collection System (AFCS) PPP project envisioned to replace the ticketing systems being used in LRT Lines 1 and 2 and Metro Rail Transit Line 3. This project has yet to be bid out.
Fare collection for the rail project that will connect Metro Manila and the highly populated Cavite province will be divided between the concessionaire and the winning bidder for the AFCS project, revealed the source. “The winning concessionaire will still get the big chunk of the fares collected for LRT 1 extension. The scenario here, however, is that bidders for the LRT 1 extension would naturally want to know first the scope of the AFCS contract because, at the end of the day, there will be another set of terms between the concessionaire for LRT 1 extension and the AFCS operator. There lies the problem. The AFCS contract has yet to be bid out and yet the winning concessionaire should commit now,” explained the source.
Meanwhile, MTD Philippines President Isaac David said fare collection is just one of the many issues that the Department of Transportation and Communications has yet to resolve.
“Among others, our concerns are the delivery of right-of-way involving relocation of about 3,000 squatters, the up-front fee to be paid even before financial closing is already a bank ability issue, the undetermined road worthiness of existing facilities, including the 30-year-old trains and structures, are risks which are difficult to determine,” he said in a text message.
MTD forms part of the MTD-Samsung Corp., which also failed to submit its bid proposal last week. David said the consortium is “very serious” but “our bankers find the foregoing a big part of a deal to be ignored.”
“We raised these matter during the one-on-one meetings but [these] were not addressed by the agency,” added David. Nonetheless, David said the consortium is keen on participating again if the terms are revised.
DMCI Holdings Inc. said its decision not to submit a bid proposal was prompted by risks surrounding the existing bid terms causing uncertainties in investments in the project.
Still, DMCI awaits the revision of the terms of the contact. “We will study [the] amendments,” said DMCI President Isidro Consunji in a text message.
A DOTC statement issued on Friday said the Special Bids and Awards Committee is looking at the possibility of extending the bidding process and re-evaluating the existing terms to further address the commercial issues raised by the pre-qualified bidders.
The lone bidder, Light Rail Manila Consortium of the Metro Pacific group and the Ayala Corp., submitted its technical and financial bid on Thursday. However, its bid proposal was declared non-compliant because it sought conditions which the committee found acceptable. “Though they submitted a bid, Light Rail raised conditions which I can’t disclose because the SBAC will still have to study,” said bids and awards committee chairman Jose Perpetuo Lotilla.