Lock, stock & barrel bidding sets aside P20B offer on MRT

By Myla Iglesias
October 22, 2018

The government has decided to auction off the rehabilitation, operation and maintenance of Metro Rail Transit line 3 (MRT-3) this year, setting aside an unsolicited proposal submitted by the consortium of Metro Pacific Investments Corp. (MPIC) and Ayala Corp.

Arthur Tugade, Department of Transportation (DOTr) secretary, told reporters the agency will not pursue the unsolicited proposal for MRT-3 and will instead bid out the project in one package including the equity and  debt.

“I will make it (MRT-3) a solicited proposal. The package is lock, stock and barrel,” Tugade said.

The DOTr’s change in policy will set aside the P20-billon proposal of the MPIC-Ayala consortium to rehabilitate, operate and maintain the rail system for 30 years.

In September last year, DOTr awarded original proponent status to the group.

The consortium increased the project investment from P12.5 billion to P20 billion to cover the expenses for the buyout of the government and private sector stakeholders in the rail system.

It  has started the conduct of due diligence — evaluating the engineering, architectural and marketing aspects of the project.

The due diligence was put on hold in the middle of the year as the  government had wanted to address issues hounding MRT-3 , such as the need to appoint a new maintenance operator as well as the tests on the suitability of the trains provided by China’s Dalian Corp.

David Nicol, MPIC chief finance officer said, if the bidding is based on the proposal that the consortium submitted, the government should pursue  Swiss challenge. But he did not elaborate whether or not the consortium will challenge the bidding.

The DOTr is expected to turn over by next month the maintenance operation of MRT-3 to Sumitomo Corp. of Japan.

Sumitomo will conduct rehabilitation and maintenance works to restore MRT-3 to its original design condition and capacity. The contract period is  31 months, plus 12 months for defect liability period.

The scope of works of the project, with cost estimated at ¥34.480 billion or P16.985 billion,  covers the MRT-3’s trains, power supply system, overhead catenary system, radio system, CCTV system, PABX public address system, signaling system, rail tracks, road rail vehicles, depot equipment, elevators and escalators, and other station building equipment.

In November last year, the DOTr took over the maintenance operation of MRT-3 following the termination of a P3.8-billion contract with Busan Universal Railways Inc.

As of October 19, DOTr MRT-3 served 353, 553 passengers, traveled a total distance of 4,455 kms., and completed 135 loops. It also recorded an average of 15 running trains at peak hours, 15 running trains at off-peak hours, and an average headway of 7 minutes.