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
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