Monday, January 26, 2009 [ manilatimes.net ]
By Darwin G. Amojelar, Reporter
THE World Bank may fund the huge financial requirements of the planned extension of the Light Rail Transit Line 1 (LRT 1) South Extension Project if the tight global credit condition continues, according to the National Economic and Development Authority (NEDA).
In a document, the agency said the $1.1 billion project, which includes purchasing rolling stocks, consulting services for design and construction supervision among others, would be implemented under a build-operate-transfer scheme, adding the Washington-based lender may fund this if the credit crunch persists.
The current global financial crisis may prevent private companies from raising money to finance the extension of the LRT 1 to Cavite.
“However, once financial markets stabilize and credit eases, the World Bank plans to privatize its participation,” the NEDA said.
The agency said the Millennium Challenge Corp. (MCC) may finance the government’s counterpart amounting to about $675 million, which will basically fund a portion of the civil works.
The MCC Millennium Challenge Account (MCA) is the foreign-assistance program that former US President George W. Bush announced at the 2002 Financing for Development Conference in Monterrey, Mexico.
From the original $683 million, the cost of the LRT 1 South Extension Project has climbed to $1.8 billion.
The Light Rail Transit Authority will resubmit the proposed project for approval, a NEDA official earlier said.
The extension is a priority project of the Arroyo administration and will pass through the southern cities of Parañaque and Las Piñas and neighboring municipalities of Bacoor, Imus and Dasmariñas in Cavite.
The bidding of the project was cancelled early last year because of the absence of counterpart government funds.
Companies that had expressed interest in the project were Isolux Corban of Spain, Rites Ltd. of India, Infrastructure Leasing and Network Services Ltd. of India, DM Consunji Inc., Sumitomo Corp., China State Construction Engineering Corp., China Railway South Group Co. Ltd. and Overseas Engineering Co. of China.
The winning bidder was supposed to fund the design, construction, installation and integration of the extension with the existing lines. It would also be in charge of the integrated operation and maintenance of the entire line and provision of enhancement works on the integrated system.
The project will have a 40-year concession period inclusive of four years of construction.
It will include eight new passenger stations with provision for two additional future stations. It is expected to serve 800,000 passengers a day and cut travel time from Bacoor, Cavite, to Monumento, Caloocan City, to less than an hour.
Earlier, the NEDA approved six projects worth $935.4 million to be funded by the MCA, and forwarded to MCC for its peer review by second week of December this year.
The government is also asking MCC to fund the Household Electrification of Remote Areas in Luzon, the Tabuk Hydropwer Project, the Feasibility Study for Missionary Electrification in 29 Selected Islands within Luzon, The Water Supply Development for Non-Operational/Non-Creditworthy Water Districts Project and the Rural Water Supply, the Sanitation Sector Project for Visayas and Mindanao, and Enhancement of Integrity Platforms in Government.
