The government of Philippines rejected last week the only bid for the Light Rail Transit Line 1 (LRT1) Cavite Extension Project after the bidder sought conditions that the project committee deemed unacceptable. Three other teams submitted separate letters expressing their decision not to join the auction.

Cosette Canilao, executive director of the Philippine PPP Center said that the bidders who pulled out from last week's auction were mostly concerned about the real property tax (RPT) that local government units (LGUs) might impose. She said the RPT could surge to as high as P2 billion a year for an extended railway, however, for many of the bidders, Canilao said the RPT could be very volatile, based on the proponents' vast experience in dealing with LGUs.

Only Metro Pacific Investment Corp, through the Light Rail Manila Consortium, made an offer for the P60 billion project, one of the government's public-private partnership ventures.

Ayala Corporation and Metro Pacific Investment Corp earlier formed Light Rail Manila to bid for rail projects that the government would auction off under its PPP Program. However, last week, the Ayala Group announced that it had ditched its partnership with MPIC for the LRT1 Cavite Extension Project.

The list of teams qualified to bid for the project is the following:

• Light Rail Manila: Metro Pacific Investments Corp. (33%) and Ayala Corporation (33 %), Metro Pacific Light Rail Corp. (12%), AC Infra Holdings Corp. (12%) and Macquarie Infra Holdings Philippines PTE Ltd. (10%).
• SMC Infra Resources: SMC Infra Resources (San Miguel Corp.)
• DMIC Holdings,Inc 
• MTD-Samsung consortium: MTD Capital Bhd (33%), Samsung C&T Corp. (20%), Union Equities, Inc. (15%), DM Wenceslao and Associates, Inc. (12%), Primewater Infra Corp. (20%).

The day after bids submissions, on Friday Aug. 15th, the Department of Transportation and Communications (DOTC)  announced that the bids and awards committee is looking at the possibility of extending the bidding process and reevaluating the existing terms to further address the commercial issues raised by the pre-qualified bidders.

The announcement also stated that construction will proceed as scheduled on the LRT1 Cavite extension project.