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METRO
Rail Transit-7 (MRT-7) project proponent, Universal LRT
Corp., expects a number of interested investors to
purchase bid documents from the transportation
department. It doubts, however, that these firms will be
able to submit a proposal deemed most advantageous to
the government such as theirs.
Eli
Levin, Universal LRT chief executive officer and
managing director, said Wednesday that a number of those
that may consider to participate in the biggest
infrastructure project yet of the Arroyo administration
are those that also expressed interest to bid for the
Edsa North Transit project, which now has been modified
and renamed LRT North Avenue extension project.
“The
odds are that there will be companies, some of them
bigger than our company, that will purchase the bid
documents but whether or not they will submit a proposal
is a different story,” said Levin. He said these
companies are based in Japan, Korea, US, China and in
Europe.
The
transportation department is expected to publish from
today until next week the bid invitations for the
construction of a $1.23-billion mass rail transit
system.
Given
the magnitude of the investment and the stringent
requirements of the government, Levin doubts that their
proposal will be matched.
The MRT7
project is a mass rail transit system that will connect
the MRT3 all the way to Commonwealth Avenue ,
Regalado Avenue
, Quirino Avenue extension up to San Jose Del Monte,
Bulacan, covering approximately 23 kilometers.
The bid
invitations should be published for three consecutive
weeks. Thereafter, bid documents will be made available
after 10 days. Interested parties have 60 days to submit
their proposals.
The
Department of Transportation and Communications (DOTC),
for its part, will evaluate the proposals for at least
30 days. If there is a better proposal than Universal
LRT’s, then Levin’s group has 30 days to match the
offer.
If there
are no challengers, the government will finalize a
contract with Universal LRT, a consortium led by EL
International Holdings, a member of the EL Group of
Companies of Hong Kong.
Other
members include Yuchencgo-owned EEI Corp., TCGI
Engineers, Tyco-subsidiary Eart Tech, Alstom Phils,
Merlin Capital of the Tong family, Siemens and China
Railway 18.
The SM
Group also owns 60 percent of MRT-7’s real estate
venture and 25 percent of the railway project.
“If we
can have the final contract signed by June this year
then we could start construction at the end of 2008 and
finish it by mid-2012,” said Levin.
Levin
said project financing include $309-million equity
investment and $926-million debt.
Of the
$926-million debt, Levin said $126 million would be in a
form of untied loans to finance the civil works portion
of the project. A number of foreign banks have already
expressed interest to facilitate the loan. The remaining
$800 million will be sourced from export credit
agencies.
Meanwhile, the $309-million equity will be equally
shouldered by the contractors, multilateral institutions
such as the Asian Development Bank and World Bank, and
real-estate developer.
“There
will be an equity investment coming from people who have
interest in the project,” said Levin.
The
closing of the project’s financial aspect is expected to
happen 18 months after the contract is awarded to
Universal LRT, Levin added.
The MRT7
project has a real estate component to allow government
to sufficiently recover the subsidy that it would
provide.
The
consortium had planned to construct 2,500 residential
units and 300 office units every year on a 174-hectare
area in Bulacan. Universal LRT had also planned to
construct a 22-kilometer road and a 20-ha. bus and train
depot in the same area.
Fares
for the railway system, designed to decongest the East
Avenue and Commonwealth corridor, will be pegged at an
average of P27. This will go up every year.
Under
the proposed contract, government will support the MRT7
project by making a total of $108 million in advance
payments to Universal LRT for 10 years. |
