Gov’t must settle MRT-LRT loop bidding issues to avoid delay

MANILA, Philippines - The government has two months to resolve the budget issues hounding the electromechanical component of the mass rail link project that seeks to connect the Light Rail Transit (LRT) Line 1’s Monumento station in Caloocan City with the Metro Rail Transit’s (MRT) North Avenue station in Quezon City. Package C of the project, which involves the installation of signal and wiring equipment, was declared a failed bid after DMCI-First Balfour, the only party qualified to join the bidding, failed to submit its engineering design documents. The P6.3 billion loop is part of a government plan to create seamless travel and decongest traffic in Metro Manila. In an interview, D.M. Consunji, Inc. (DMCI) Executive Vice-President Edilberto Palisoc said they had opted not to bid because package C’s budget at P2 billion is not enough. "If you have to strictly follow [the Light Rail Transit Authority’s] technical specifications, P2 billion is certainly not enough," Mr. Palisoc said. He added that package C should be priced P2.8-P3 billion based on the prices of construction materials such as steel, which he claimed to have doubled. If the budget is not increased, the state-run LRTA should consider buying the materials directly from suppliers and have the contractor handle the installation. "They have to resolve the issue within the next two months for package C, otherwise [the MRT-LRT Loop] will be delayed," Mr. Palisoc added. In a telephone interview yesterday, an LRTA official who wished to remain unnamed said they are back to square one following DMCI-First Balfour’s retreat. The LRTA official admitted that going back to the pre-qualification process could delay the project. He said the notice to proceed on all the packages should be given by June 9. "The [approved budget cost] is just enough, but the LRTA board is doing its due diligence if their proposal [for direct procurement] is viable," the official said. The MRT-LRT Loop has three components: package A, which is divided in two phases and involves the construction of a viaduct and pedestrian overpass; package B, which will build and modify train stations; and package C, which entails electromechanical works. The LRTA is examining the engineering designs submitted by the bidders for package A and B. The 5.4-kilometer link is expected to start operating by 2009. The LRT, operated by the LRTA, has two lines: LRT-1, called the Yellow Line and MRT-2, called the Purple Line. In a related development, Finance Undersecretary and National Treasurer Roberto B. Tan said the government might opt for a combination of borrowings from the bond market and banks to raise funds for the buy-out of the MRT-3. The MRT, operated by the Metro Rail Transit Corp. (MRTC), has a single line called the MRT-3 or Blue Line. "We will determine the best structure with the best financing mix this quarter. It could be bonds or syndicated loans from banks," he told reporters last week. The state has been wanting to buy back the rail transit system running on EDSA to save on the costs of subsidizing its operations. The government is also shouldering maintenance costs worth $1.67 million. The government could save as much as $500 million if it takes over the MRT-3 now. - BusinessWorld