Thursday, 4 March 2010

SMC bags $1.5-B railway project linking QC to Bulacan

By Daxim Lucas
Philippine Daily Inquirer

MANILA, Philippines--Diversifying conglomerate San Miguel Corp. will take control of the $1.5-B Metro Rail Transit-Line 7 project by acquiring a majority stake in the firm that won the mandate for the deal, the Inquirer learned Wednesday.

According to a source familiar with the transaction, the publicly listed firm was in the “advanced stages of negotiation” to take control of Universal MRT Corp., which is the consortium tasked to build the MRT 7 project.

The deal puts SMC in a position to benefit from the potentially lucrative commuter rail business between Metro Manila and the rapidly growing region to the north of the metropolis.

At present, the MRT 7 project is controlled by businessman Salvador “Buddy” Zamora III who, in turn, acquired majority control of the consortium in 2008 from its original proponent, Israeli businessman Eli Levin.

MRT 7 is a build-“gradual transfer”-operate, maintain and manage project for the development, financing, operation and maintenance of a 22-kilometer light rail transit route that extends from the MRT Line 3’s North Edsa terminal to San Jose del Monte, Bulacan.

The project also includes an Intermodal Transport Terminal—a transportation hub for buses and other forms of public conveyances—in San Jose del Monte, as well as a 22-km, six-lane feeder highway from the northern end of the line to Bocaue, Bulacan. This highway will link the intermodal terminal to the North Luzon Expressway.

The source said the entry of SMC into the Universal MRT consortium is expected to be sealed “very soon,” but declined to reveal the pricing terms for the deal.

As envisioned by the proponents, the rail component of MRT 7 project will initially operate 108 rail cars in a three-car train configuration. Initial capacity is projected at 448,000 passengers a day, but will eventually be expanded to accommodate as many as 850,000 passengers daily.

The rail line will have 14 stations, namely: North Edsa, Quezon Memorial Circle, University Avenue, Tandang Sora, Don Antonio, Batasan, Manggahan, Doña Carmen, Regalado, Mindanao Avenue, Quirino, Sacred Heart, Tala and Araneta San Jose Del Monte.

The intermodal terminal, on the other hand, will be able to accommodate 60 buses and will also feature passenger facilities and amenities.

The entire $1.5-billion project is expected to be fully completed in 42 months, although parts of it may be made operational in phases.

Once completed, SMC will operate and maintain the rail service, the intermodal terminal and the highway for a period of 25 years. The government will get a 30-percent share of net passenger revenues and a 20-percent share of other earnings.

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