News / PPP contract signed for Manila LRT 1 project

PPP contract signed for Manila LRT 1 project

🕔 October 6, 2014
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LRT-1 line in ManilaThe team formed by Metro Pacific Investments Corporation (MPIC)Ayala Corporation and Macquarie Infrastructure Holdings (Philippines) Pte Ltd signed with the Philippine government the concession agreement for the $1.45-billion Light Rail Transit 1 (LRT1) Cavite extension project on Thursday, October 2.

The team was the lone bidder for the public-private partnership (PPP) project. The consortium is led by MPIC (55%) with Ayala (35%) and Macquarie (10%).

The consortium has now 12 months to reach financial close and 48 months to complete the extension project. According to sources, the project will be financed by local banks, because the project is a peso revenue business.

During the concession agreement signing, the consortium paid the Department of Transport and Communications (DOTC) an upfront payment of 10% of its $209.05 million offer. The remaining amount will be paid throughout the 32-year concession period.

Transaction advisers to the project grantors are the International Finance Corporation, the Development Bank of the Philippines, Pinsent Masons LLP, and C&G Law.

The LRT-1 expansion project includes the operation and maintenance of the entire LRT-1 system for a 35 year concession period.

The LRT extension project will lengthen Line 1 from 20.7 kilometers to 32.4 km, with a new south endpoint in Niog, Bacoor, Cavite. Approximately 10.5 km of the Cavite Extension System will be elevated and 1.2 km will be at grade level. The extension will serve nearly 4 million residents of Parañaque, Las Piñas, and Cavite.

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