Bidding opens for $400-million EDSA North railway project

REPORT FROM BUSINESSWORLD The government will open on Monday the tender for the EDSA North Transit (ENT) project that will interconnect existing and planned railways in Manila for an estimated cost of $400 million. Transportation Assistant Secretary Roberto R. Castañares said ENT will be fully financed by private companies, with the government paying for the asset over a concession period of 25 years. This early, Mr. Castañares said that four foreign companies from Europe, South Korea, Taiwan, and Japan have pledged to bid for the railway that will transport as many as 650,000 passengers daily from Malabon to North Avenue in EDSA. The companies are all doing business in the Philippines either through joint ventures or direct transactions. DESIGN Initial designs of ENT detailed that the railway will run for 6.8 km from North Avenue to Caloocan City and will have seven stations spaced along North Avenue, Roosevelt, Balintawak, and Monumento. ENT was supposed to cost only $300 million. The Transportation department, however, decided last week to further extend ENT from Caloocan to Malabon, where large volume of commuting public is expected to benefit from the railway, Mr. Castañares said. ENT will now run for 7.5 km with nine stations at North Triangle, Bansalangin, Roosevelt, Kaingin, General Malvar, Monumento, Caloocan Central, Caloocan West, and Tugatog. It will now cost $400 million. The additional capital spend will be used to build the 3.2-km underground railway tracks along the narrow Samson Road in Caloocan and a railway depot on Agham Road. Open tender processes for ENT is expected to last until September, while financial closing -- the period for allowing the successful bidder to secure funding sources for the project -- will last until December. Railway construction will start in first quarter next year, with completion scheduled for 2010. About 305,000 passengers are seen to use ENT beginning 2010, climbing to 650,000 passengers by 2030. FULL PRIVATE FINANCING "ENT will be a solicited project with full private financing, meaning government will pay for the project over several years through a gradual transfer of the asset to public hands. Government can legally subsidize and guarantee payment for this solicited project according to the BoT [build-operate-transfer] Law," Mr. Castañares said. "It will be subjected to full private financing with commercial rates for loans and not through ODA [official development assistance] because our ODA is fully allocated until 2008. If we wait for availability of ODA loans, then the project will have to wait for at least two years before it could be implemented. It will also not be subjected to public-private partnership with 50% funding share from the government because we cannot source half of the funds due to budgeting constraints," he added, when asked about the rationale of full private financing for ENT. LINK ENT will connect at North Avenue with Metro Rail Transit 3 (MRT-3) that runs from North Avenue to Pasay City and MRT-7 that is planned to run from Bulacan to North Avenue. It will also link at Monumento with Light Rail Transit 1 that runs from Pasay City to Monumento. ENT will also connect at Caloocan with the Southrail line that is being rehabilitated by the government to transport commuters and goods from Alabang to Caloocan. It will link with the Northrail line that runs from Caloocan and eventually to Clark, Pampanga. ENT will close the loop of railway systems in Manila, a project pushed by President Gloria Macapagal Arroyo since 2004. ENT should have been the MRT-3 Extension that was originally planned to seamlessly extend the existing MRT-3 line to Monumento. The government, however, has abandoned the idea of a seamless connection with MRT-3 to save it from payment of track access, as well as fees for wear and tear of tracks, once ENT trains pass through the right of way of MRT-3. - Kerlyn G. Bautista/BusinessWorld