Cancel LRT-1 extension award to Metro Pacific-Ayala consortium

IT has been more than three years since the Light Rail Manila Corp. — the consortium of Ayala Corp., Metro Pacific Light Rail Corp. of Metro Pacific Investments Corp. and Macquarie Infrastructure Holdings Phil. — won the award to build, operate and maintain the P64.9-billion Light Rail Transit (LRT) Line 1 extension project to Cavite. But until today, not a single concrete post for the extension line has been erected by the consortium.

Metro Pacific Light Rail Corp. holds a 55 percent stake in the consortium while AC Infrastructure Holdings Corp. of Ayala Corp. has 35 percent. Philippine Investment Alliance for Infrastructure’s Macquarie Infrastructure Holdings Phil. controls the remaining 10 percent.

Awarded sometime in September 2014 by then Transportation and Communications Secretary (and Liberal Party President) Joseph Emilio A. Abaya, the Ayala-Metro Pacific consortium was supposed to begin construction works for the LRT-1 extension within a maximum of one year from the signing of the concession agreement, or by October 2015. Under the terms of the award, the project should be fully operational within 54 months, or by May 2019. With less than seven months to go, it’s a foregone conclusion that the Ayala-Metro Pacific consortium will violate its contractual commitment to finish the LRT-1 extension to Cavite before the imposed deadline.

This certainly puts current Transportation Secretary Arturo Tugade in a bind. If he tolerates further delays, the DOTr stands to be accused of being a “captured agency” of Philippine business behemoths. The only logical and transparent way out for Tugade therefore is to cancel the LRT-1 extension award to the Ayala-Metro Pacific consortium. He certainly would have all the factual and legal bases to do so.

As early as 2014, then Transportation Secretary Abaya already announced that the Ayala-Metro Pacific consortium could start with the P65-billion LRT-1 extension project even without the decision of the Supreme Court on the common station in North Avenue, Quezon City.

This was after the high tribunal issued a temporary restraining order (TRO) when the SM Group contested the then DoTC’s move to relocate the P1.4-billion MRT-LRT common station project to Trinoma, an adjacent mall owned by competitor Ayala Land. “The TRO is in the transfer of the station. There is no restraint in the award of LRT 1 Cavite Extension,” Abaya clarified then.

Since then, the Metro Pacific-Ayala consortium has moved forward with the project but only in press releases rather than construction activities.

Six months after it was supposed to begin civil works on the extension project, the Metro Pacific-Ayala consortium tried to wiggle out of its contractual timeline by blaming the Yellow government (yes, their benefactor) for supposed delays in the delivery of right-of-way and in the procurement of new trains. That’s’ a bunch of crap — and they know it!

Even before the concession for the LRT-1 extension was bid out, all the six prospective bidders for the project (including the Metro Pacific-Ayala consortium) were aware that the right-of-way (ROW) acquisition requirement was already close to being completed. As far back as January 2014, the then DoTC had already completed 92.34 percent of the ROW acquisition requirement for the Baclaran-to-Dr. A. Santos segment; 69.2 percent of the Dr. A. Santos-to-Zapote segment; and 84.2 percent of the Zapote-to-Niog segment.

The ROW requirement becomes even less significant since it reportedly comprises less than 15 percent of the entire extension project. This means that the Metro Pacific-Ayala consortium could have started civil works on the other 85 percent — the non-contentious segment — if it wanted to as far back as 2016. Instead, the consortium dilly-dallied with all sorts of lame excuses.

Why? Because they didn’t want the billions of pesos needed to fund the project to come out from their pockets. Apparently, the ultimate strategy was to have LRT-1 passengers to pay for a big chunk of the extension line to Cavite.

This much was admitted by the Metro Pacific-Ayala consortium when it said that it was seeking a P5 increase in LRT-1 fares to fund the extension of the line to the Cavite suburbs. In fact, the company even warned that it might not be able to complete the 11.7-kilometer extension project by 2021 without the fare hike.

Genius talaga itong Metro Pacific-Ayala! Imagine, frying the riding public in its own lard.

So, whatever happened to the consortium’s express guarantee in its winning bid that it had the financial muscle to fund the P65-billion extension project? And what about its public statements that the Metro Pacific-Ayala consortium had already secured a P25-billion loan facility from three banks and that the remainder could be easily funded by equity from LRMC?

The consortium’s ingenious funding scheme earned a quick retort from Tugade — as it should. The Transportation secretary said companies should stop making the government a “hostage” by saying the construction of vital infrastructure is dependent on tariff increases under their concession agreements. “They should not say the extension of the LRT is dependent on the rate increase. They should not make us a hostage,” Tugade said.

Tugade also thumbed down the suggestion by the Metro Pacific-Ayala consortium for the government to subsidize the fare increase, saying that “if you will do business with the government, there should be no form of subsidy and guarantee.”

After quickly being cut down by the DOTr chief, the consortium replied that it will move forward with the construction of the extension even without the tariff adjustment. Yun naman pala eh. What are you waiting for, then?

If the Metro Pacific-Ayala consortium can’t put up a single post by the end of this year, it doesn’t deserve to keep the concession for the LRT-1 extension a minute longer.

https://www.manilatimes.net/cancel-lrt-1-extension-award-to-metro-pacific-ayala-consortium/466774/