Diversifying conglomerate San Miguel Corp., the Lopez group and seven other firms have formalized their intention to join the June auction of the MRT 3 (Metro Rail Transit 3) and LRT 1 (Light Rail Transit Line 1) operation and management (O&M) contract.
A list provided by a BusinessMirror source showed the following entities that submitted written expression of interest before the Special Bids and Awards Committee (SBAC) of the Department of Transportation and Communications (DOTC).
The nine firms are Autre Porte Technique Global Inc.; Miescorrai Inc., First Balfour Inc.; Abratique & Assoc. Phil. Inc.; Strategic Alliance Holdings Inc.; Federal Mgmt & Maintenance Inc.; Optimal Infrastructure Development Inc.; Gracia Y Caridad Ministry Foundation; and PMP Inc.
Optimal Infrastructure is 99.9-percent owned by San Miguel Holdings Corp. SMC president Ramon Ang sits in as chairman of Optimal Infrastructure.
First Balfour Inc., meanwhile, is a Lopez group company. It is a fully owned subsidiary of First Philippine Holdings Corp. It was awarded a contract in 2008 to build the LRT North Extension project together with D.M. Consunji Inc. The company also became part of the consortium of local contractors that won the bid to construct the Tarlac-La Union expressway.
Miescorrail is a subsidiary of Meralco Industrial Engineering Services Corp. or Miescor.
Autre Porte Technique offers complete railway solutions and is touted as one of the fastest-growing railway service provider in the country. It holds office in Makati.
Abratique & Assoc. is a professional civil and traffic engineering firm of consultants specializing in the design, deployment and maintenance of advance traffic control.
Strategic Alliance Holdings is engaged in large infrastructure projects, including Skyway, Star Tollway and automated election in the Autonomous Region of Muslim Mindanao.
Transportation officials expect more entities to submit their written expression of interest before the April 15 deadline. They also raised the possibility of extending the deadline but the committee has yet to decide on this.
The agency recently published an invitation to submit expression of interest and to apply for eligibility to bid for the four-year O&M contract of services for the operation and maintenance of LRT line 1 and MRT line 3 systems, extendable by one year.
The procurement of the required services shall be conducted through open competitive bidding procedures provided for by Republic Act 9184, otherwise known as the Government Procurement Reform Act, and its Implementing Rules and Regulations.
In order to qualify, prospective bidders should have completed a similar single contract with a value of at least 50 percent of the approved budget for the contract (ABC) and should meet all other minimum eligibility requirements stated in the eligibility documents.
Any firm or entity interested in the project must submit a formal expression of interest not later than April 15, accompanied by payment of a norefundable fee of P10,000.
Only those that have duly submitted their respective formal expressions of interest and paid the required fee on time will be issued eligibility documents by the committee.
The DOTC will also issue tender documents to entities found eligible to participate in the tender stage.
The schedule of submission of eligibility applications and tender documents shall be provided by the agency later to those which have submitted formal expressions of interests.
Whoever wins in the auction will have the right to expand and operate the LRT line 1 and MRT 3. This approach is geared towards achieving an integrated LRT 1/MRT 3 privatization.
But the Pangilinan-led Metro Pacific Investments Corp. (MPIC), which is expected to bid for the O&M contract, cautioned the government on this plan. “A structure that offers for bidding the expansion of LRT 1 but awards the O&M of LRT 1 and MRT 3 to the winning bidder of such expansion gives little value to the MRT 3 business and potential. This approach is neither beneficial to the government nor to the private shareholders of MRT 3,” said MPIC in its proposal sent to the DOTC in January.
The local flagship of the First Pacific Co. Ltd. seeks to double the railway system’s capacity by infusing $300 million. Separately, MPIC wants to gain control of the railway, which services the high-traffic Edsa highway by buying out government’s interest in MRT 3 for $1.1 billion.
It added that it would be difficult for any new investor to bid for the expansion of LRT 1 should they be made liable for the $1.1-billion MRT 3 equity value buyout (EVB) cost; assume LRTA’s existing debt of over $1.4 billion; and buyout Metro Rail Transit Corp.’s existing expansion rights valued at over $150 million. “These obligations aggregate $2.65 billion before any new investments for rehabilitation and expansion for all three systems are expended,” stressed MPIC.
Should government insists on this approach, the winning bidder will also be forced to set the initial average fare at no less than P60 per trip for MRT 3 alone, said MPIC. “The government assuming the cost of servicing $2.65 billion in existing obligations doers not, in our view, constitute a prudent or wise decision,” it added.
MPIC said it has not received any formal reply from the DOTC about the proposal.
Early this week, MPIC said it was still uncertain whether to participate or not in the planned auction. But it stressed that it has not withdrawn its proposal.
Thursday, 14 April 2011