THE GOVERNMENT has lowered the subsidy
ceiling for the Light Rail Transit Line 1 Cavite Extension (LRT-1 CavEx)
after cutting out an obligation borne by the concessionaire.
In its latest general bid bulletin, posted
last week, the Department of Transportation and Communications (DoTC)
noted that it had reduced the subsidy cap for the P64.9-billion railway
project to P5 billion from the original P6 billion it had set.
“The reduction of the cap on the Subsidy Amount is consistent with the
deletion of the obligation of the Concessionaire to fund the relocation
under Section 11.7 of the draft Concession Agreement up to the amount of
Nine Hundred Million Philippine Pesos (PhP900,000,000),” the DoTC said
in the notice.
It added that this includes all the taxes and the amount of value-added tax (VAT).
The DoTC previously disclosed the original P6-billion amount, which it
termed Viability Gap Funding (VGF), in a previous bid bulletin issued on
Feb. 10.
Public-Private Partnership Center Executive Director Cosette V. Canilao
explained in a phone interview that a subsidy cap refers to the maximum
amount that bidders can request from the government.
In a presentation during the project’s pre-bid conference last January,
either the VGF (also called the “lowest capital subsidy”) or the highest
concession fee is indicated in the bid parameter, which is part of the
financial proposal.
The lowest VGF will be doled out in four separate tranches based on
project completion, with the largest chunk, of 50%, to be given “upon
commissioning of the section between Baclaran and Dr. Santos” stations.
The deadline for the submission of documents for the project’s
single-stage bidding was supposed to have been today, but the DoTC has
postponed it to May 28.
The LRT-1 CavEx project will add ten stations to the existing railway,
increasing the line by 11.7 kilometers from its southern end in
Baclaran, Parañaque City, to Bacoor, Cavite.
This is the second time that the government is auctioning off the
project as bidding failed in August 2013, when only Pangilinan-led Metro
Pacific Investments Corp. (MPIC) submitted a bid that had been
conditional to boot.
Currently, potential bidders for the project include the Light Rail
Manila Consortium of MPIC and Ayala Corp., and Megawide Construction
Corp., which was awarded the contract for the P17.5-billion Mactan-Cebu
International Airport (MCIA) project on April 4.
The department has been trying to make the PPP project more palatable to
investors and recently permitted bidders to submit a design for the
P1.4-billion Common Station project, to connect the LRT-1 with Metro
Rail Transit Line 3 at the northern end of EDSA.
MPIC is the local unit of Hong Kong -- based First Pacific Co. Ltd.,
part owner of Philippine Long Distance Telephone Company. Hastings
Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary
MediaQuest Holdings, Inc., has a majority stake in BusinessWorld. -- Anton Joshua M. Santos
source: Businessworld
Monday, April 28, 2014
Thursday, April 24, 2014
LRT-1 deal sweetened
A KEY PUBLIC-PRIVATE partnership (PPP) deal
-- the P65-billion extension of the Light Rail Transit Line 1 (LRT-1)
-- has been sweetened by giving the winner a say in the construction of
another major infrastructure project.
Instead of bundling the proposed P1.4-billion LRT-Metro Rail Transit Common Station with the LRT-1 deal, the Transportation department will be offering bidders the right to dictate how the facility will look.
“The bidders will be asked to submit their concept design for the common station,” Transportation Undersecretary Jose Perpetuo M. Lotilla told BusinessWorld.
“There’s no bid bulletin yet but ... [it was] approved before Holy Week,” added Mr. Lotilla, who is also the chairman of the department’s Special Bids and Awards Committee.
Transportation chief Joseph Emilio A. Abaya earlier said the PPP deal would be repackaged to include the common terminal which, given a May 28 auction schedule -- moved from next week -- raised the prospect of a fresh bid process extension.
The May auction date now remains on track, with the contract for the construction of the MRT-LRT common station to be bid out separately.
Mr. Lotilla claimed that having design authority over the common station would make the LRT-1 extension project more attractive.
“The essence of having the bidder submit a concept design is to ensure that the bidder is not deterred from bidding [for the LRT-1 deal], because the common station might not be congruent with the bidder’s concept [of how the facility should look],,” he said.
“This way, the winning bidder is assured that the concept design will not stray from his design. Thereafter, the common station based on the winning [LRT-1] bidders’ design will be bid out and winner of that [common station] bid wins common station construction,” Mr. Lotilla said.
The LRT-1 project calls for extending the existing line by 11.7 kilometers to Bacoor, Cavite from its current Baclaran, Manila terminus. The government first tried to bid out the project last August but was forced to declared a failure after the sole bidder -- out of four pre-qualified -- submitted a conditional offer.
The government moved to revise the contract’s terms and the list of prospective bidders has since grown to seven groups. The Light Rail Manila Consortium led by Metro Pacific Investments Corp. (MPIC), San Miguel Corp.’s SMC Infra Resources Inc., Consunji-led DMCI Holdings, Inc., Malaysian-backed MTD Philippines Inc., Globalvia Inversiones S.A.U. of Spain, Megawide Construction Corp., and Ecorail Transport Service Inc. are expected to compete for the project.
MPIC was the sole bidder in last year’s auction. It has asked the Transportation department to clarify how the common station project would be implemented.
The MRT-LRT common station project is a coveted contract, with the group of tycoon Henry Sy having made a P200-million downpayment for the naming rights given the facility’s proximity to the SM City North Edsa mall. The government, however, has said it will return that money after indicating the terminal will be built near the Ayala-owned Trinoma mall instead.
Mr. Lotilla told BusinessWorld the naming rights could be offered at a separate auction.
“We have to deal with it (the naming rights issue) separately,” he said. -- Maria Eloisa I. Calderon
Instead of bundling the proposed P1.4-billion LRT-Metro Rail Transit Common Station with the LRT-1 deal, the Transportation department will be offering bidders the right to dictate how the facility will look.
“The bidders will be asked to submit their concept design for the common station,” Transportation Undersecretary Jose Perpetuo M. Lotilla told BusinessWorld.
“There’s no bid bulletin yet but ... [it was] approved before Holy Week,” added Mr. Lotilla, who is also the chairman of the department’s Special Bids and Awards Committee.
Transportation chief Joseph Emilio A. Abaya earlier said the PPP deal would be repackaged to include the common terminal which, given a May 28 auction schedule -- moved from next week -- raised the prospect of a fresh bid process extension.
The May auction date now remains on track, with the contract for the construction of the MRT-LRT common station to be bid out separately.
Mr. Lotilla claimed that having design authority over the common station would make the LRT-1 extension project more attractive.
“The essence of having the bidder submit a concept design is to ensure that the bidder is not deterred from bidding [for the LRT-1 deal], because the common station might not be congruent with the bidder’s concept [of how the facility should look],,” he said.
“This way, the winning bidder is assured that the concept design will not stray from his design. Thereafter, the common station based on the winning [LRT-1] bidders’ design will be bid out and winner of that [common station] bid wins common station construction,” Mr. Lotilla said.
The LRT-1 project calls for extending the existing line by 11.7 kilometers to Bacoor, Cavite from its current Baclaran, Manila terminus. The government first tried to bid out the project last August but was forced to declared a failure after the sole bidder -- out of four pre-qualified -- submitted a conditional offer.
The government moved to revise the contract’s terms and the list of prospective bidders has since grown to seven groups. The Light Rail Manila Consortium led by Metro Pacific Investments Corp. (MPIC), San Miguel Corp.’s SMC Infra Resources Inc., Consunji-led DMCI Holdings, Inc., Malaysian-backed MTD Philippines Inc., Globalvia Inversiones S.A.U. of Spain, Megawide Construction Corp., and Ecorail Transport Service Inc. are expected to compete for the project.
MPIC was the sole bidder in last year’s auction. It has asked the Transportation department to clarify how the common station project would be implemented.
The MRT-LRT common station project is a coveted contract, with the group of tycoon Henry Sy having made a P200-million downpayment for the naming rights given the facility’s proximity to the SM City North Edsa mall. The government, however, has said it will return that money after indicating the terminal will be built near the Ayala-owned Trinoma mall instead.
Mr. Lotilla told BusinessWorld the naming rights could be offered at a separate auction.
“We have to deal with it (the naming rights issue) separately,” he said. -- Maria Eloisa I. Calderon
Monday, April 7, 2014
Quiambao cites benefits of PPP model in Guam
Businessman
Cezar Quiambao said the public-private partnership scheme in the
Philippines has led to the construction of big-ticket infrastructure
projects that became game-changers in the country’s business landscape.
Quiambao, speaking before members of the Guam Chamber of Commerce recently at the Hilton Hotel’s Micronesia Ballroom, discussed the evolution of the PPP in the Philippines where he participated as a proponent of the Metro Manila Skyway, the country’s first elevated expressway. The project is now being linked through a P34-billion road that would connect the South Luzon Expressway to the North Luzon Expressway.
He said the elevated road “provided the intersection to an economic renaissance.” Quiambao cited his participation in two other PPP projects—the LTO-IT modernization with Stradcom Corp., which he heads as the private partner of the government, and the partnership with the Land Registration Administration.
The LTO-IT project involved the release of driver’s licenses in under 30 minutes from the old model of six months, while the PPP project with LRA involves the electronic titling of property titles.
Quiambao, a recipient of a doctorate degree from the Polytechnic University of the Philippines, said he answered the “clarion call” of then President Fidel Ramos for overseas-based Filipino professionals to go back to the country of their birth and make a difference.
He said he left his comfort zone in Indonesia where he devised project financing for huge construction projects and from that experience structured the partnership via the PPP model between Indonesia’s leading infra firm, P.T. Citra Lamtoro Gung Persada, and Philippine National Construction Corp., holder of the franchise for the South Luzon Expressway.
The skyway project led to the construction of the Southern Tagalog Arterial Road, which in turn triggered a surge in business in Batangas and resulted in the big economic benefits for the export processing zones in the same province.
“PPP has become the empowering force for government to undertake major projects, especially those needing massive funding,” Quiambao said, adding PPP was an innovation that governments resort to when they lack the revenues to pursue infrastructure projects that prove to be a boon to a country’s economy.
source: Manila Standard Today
Quiambao, speaking before members of the Guam Chamber of Commerce recently at the Hilton Hotel’s Micronesia Ballroom, discussed the evolution of the PPP in the Philippines where he participated as a proponent of the Metro Manila Skyway, the country’s first elevated expressway. The project is now being linked through a P34-billion road that would connect the South Luzon Expressway to the North Luzon Expressway.
He said the elevated road “provided the intersection to an economic renaissance.” Quiambao cited his participation in two other PPP projects—the LTO-IT modernization with Stradcom Corp., which he heads as the private partner of the government, and the partnership with the Land Registration Administration.
The LTO-IT project involved the release of driver’s licenses in under 30 minutes from the old model of six months, while the PPP project with LRA involves the electronic titling of property titles.
Quiambao, a recipient of a doctorate degree from the Polytechnic University of the Philippines, said he answered the “clarion call” of then President Fidel Ramos for overseas-based Filipino professionals to go back to the country of their birth and make a difference.
He said he left his comfort zone in Indonesia where he devised project financing for huge construction projects and from that experience structured the partnership via the PPP model between Indonesia’s leading infra firm, P.T. Citra Lamtoro Gung Persada, and Philippine National Construction Corp., holder of the franchise for the South Luzon Expressway.
The skyway project led to the construction of the Southern Tagalog Arterial Road, which in turn triggered a surge in business in Batangas and resulted in the big economic benefits for the export processing zones in the same province.
“PPP has become the empowering force for government to undertake major projects, especially those needing massive funding,” Quiambao said, adding PPP was an innovation that governments resort to when they lack the revenues to pursue infrastructure projects that prove to be a boon to a country’s economy.
source: Manila Standard Today
Friday, April 4, 2014
China shelves Recto gas talks
Philex Mining
Corp. and China National Offshore Oil Co. Ltd. have temporarily shelved
talks over the joint development of the gas-rich Recto Bank in South
China Sea, an area claimed by both Manila and Beijing.
Philex Mining chairman Manuel Pangilinan said negotiations between the two companies had stopped and that there were no plans to revive the talks soon.
Philex Mining owns 64.45 percent of Forum Energy Plc, which holds a 70-percent interest in Service Contract 72, including Recto Bank. CNOOC is an upstream oil and gas firm owned by the Chinese government.
“We have not heard from them in a few months… Well, I guess by default. There is no communication to that effect. The communication just died down,” Pangilinan said.
He said there were no plans yet to revive the talks with CNOOC. “For a moment, there’s no plan. We are busy for some other matters,” he said.
Pangilinan earlier expressed hope about forging an agreement with CNOOC that would pave the way for exploratory drilling at SC 72, which covers an 8,800-square kilometer area west off Palawan. SC 72 is estimated to contain as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
“We would hope to do that...reach a commercial basis to further exploratory and drilling work on the concession but further subject to approval of their government and our government,” Pangilinan said earlier.
Pangilinan also said having CNOOC as a partner could defuse the political tensions hounding SC 72.
“I cannot predict the political situation, but if, and if, that is a speculative if…They are a state-owned clearly identified with China, so I’m assuming the political aspects would recede in the background,” Pangilinan said.
Pangilinan said Forum was keen on developing SC 72, but security issues under the territorial dispute prevented them from doing so.
He said Forum wanted to conduct exploratory drilling “as soon as possible,” or once the security issues were addressed.
Forum Energy’s work program called for the drilling of two exploratory wells until August 2015.
“We are a Philippine contractor so we are bound by Philippine law so we cannot do that if we do not conform to Philippine laws. We have to recognize Philippine sovereignty,” Pangilinan said.
Philex Mining chairman Manuel Pangilinan said negotiations between the two companies had stopped and that there were no plans to revive the talks soon.
Philex Mining owns 64.45 percent of Forum Energy Plc, which holds a 70-percent interest in Service Contract 72, including Recto Bank. CNOOC is an upstream oil and gas firm owned by the Chinese government.
“We have not heard from them in a few months… Well, I guess by default. There is no communication to that effect. The communication just died down,” Pangilinan said.
He said there were no plans yet to revive the talks with CNOOC. “For a moment, there’s no plan. We are busy for some other matters,” he said.
Pangilinan earlier expressed hope about forging an agreement with CNOOC that would pave the way for exploratory drilling at SC 72, which covers an 8,800-square kilometer area west off Palawan. SC 72 is estimated to contain as much as 16.6 trillion cubic feet of gas and 416 million barrels of oil.
“We would hope to do that...reach a commercial basis to further exploratory and drilling work on the concession but further subject to approval of their government and our government,” Pangilinan said earlier.
Pangilinan also said having CNOOC as a partner could defuse the political tensions hounding SC 72.
“I cannot predict the political situation, but if, and if, that is a speculative if…They are a state-owned clearly identified with China, so I’m assuming the political aspects would recede in the background,” Pangilinan said.
Pangilinan said Forum was keen on developing SC 72, but security issues under the territorial dispute prevented them from doing so.
He said Forum wanted to conduct exploratory drilling “as soon as possible,” or once the security issues were addressed.
Forum Energy’s work program called for the drilling of two exploratory wells until August 2015.
“We are a Philippine contractor so we are bound by Philippine law so we cannot do that if we do not conform to Philippine laws. We have to recognize Philippine sovereignty,” Pangilinan said.
source: Manila Standard Today
China shelves Recto gas talks
source: Manila Standard Today
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