$1.5-b rail rehab unveiled

The Transport Department unveiled Friday a “comprehensive rehabilitation” plan for Metro Rail Transit 3 and Light Rail Transit 1 lines costing a combined $1.5 billion.

Outgoing Transport Undersecretary Ruben Reinoso told reporters the privatization of operation and maintenance of MRT 3 and LRT 1 was prelude to a bigger plan to rehabilitate and integrate the railway systems, implement a new fare collection scheme and extend LRT 1 to Cavite.

The department has set July 11 as deadline for the submission of bid documents for the O&M contract of the two train systems and Aug. 22 as the tentative schedule for the award. Forty-five domestic and foreign companies have expressed interest on the project but only 16 to date had secured bidding documents.

“These firms are preparing for the big one,” Reinoso said.

He said Transportation had estimated that the comprehensive rehabilitation of the train systems would cost $1.5 billion. The government is expected to shoulder $500 million of the cost and the private company winning the auction will assume the balance.

The project includes the extension of LRT 1 to Cavite, its integration with MRT 3 and the operation, maintenance and expansion of capacity of the integrated systems.

The department will grant a long-term concession to the winning company, which will then assume the ridership, market and commercial risks. The government will receive concession fees for the use of its assets by the concessionaire.

Meanwhile, Reinoso said the privatization of the O&M of MRT 3 and LRT 1 involved a monthly assessment of the delivered capacity and payment according to the contractor’s achievement of a performance target.

“If they fail to do so, there will be penalty. The government will not pay unless they perform,” he said.

Thirty-three to 40 trains are expected to run on peak hours for LRT 1 and 21 to 24 the whole day for MRT 3. The government has set a ceiling of P15 billion for the four-year outsourcing contract.

“The bidding parameter will be the cost,” Reinoso said, adding the government had set a ceiling of P15 billion for the entire four years of contract period. –Jeremiah F. de Guzman, Manila Standard Today