Upon the request of bidders, the Philippines’ Department of Transportation and Communications (DOTC) has extended the deadline for submitting pre-qualification documents for the North-South Railway Project – South Line to December 1.
The government agency said in an announcement that the change of deadline should provide sufficient time for prospective bidders to prepare documents for the PHP170.7 billion (€3.25 billion; $3.72 billion) rail project, the country’s biggest public-private partnership (PPP) project to date.
The deadline for final bid submission has been set at March 28, 2016, to be followed by the award of the project on April 27.
According to local press reports, at least 27 companies have expressed interest in the railway project.
Two local conglomerates, Metro Pacific Investment Corporation (MPIC) and Aboitiz Equity Ventures, formally asked the agency to extend the deadline for qualification, which was originally scheduled for today.
MPIC president Jose Ma K Lim told reporters that it is difficult to find foreign partners given the scale of the project and the tight timetable.
Under the project’s terms, the concessionaire will be responsible for designing, constructing, financing, operating, and maintaining the railway services.
The planned services comprise a 56 kilometre (km) commuter rail service for daily riders on the Tutuban, Manila to Clamba, Laguna route and the 478km long-haul rail service for travellers on the Tutuban, Manila to Legazpi, Albay route, with two possible extensions including a 58km railway from Calamba, Laguna to Batangas City, Batangas, and a 117km railway from Legazpi, Albay to Matnog, Sorsogon.
The winning bidder will commit to a 34-year contract, including the construction period of four years.
Set to become operational in 2020, the project is expected to yield a demand of 316,000 passengers per day in its first year, and is projected to entice around 44,000 public and private vehicle users to shift their commutes to the new railway.
It is part of the $11.46 billion pipeline of PPP projects undergoing tender, while ten PPP projects worth a total of PHP189 billion have been awarded since the programme began in 2010.
Taking the market’s current banking capacity into consideration, the Aquino government is also looking for alternatives ways of funding from the capital market through the issuance of project bonds. Discussions have been ongoing to assess issuer and investor appetite.
Philippines’ PPP Centre executive director Cosette Canilao said the government needs to work on developing the interest of the private sector not only for operation and maintenance, but also in the financing of future infrastructure projects.
Valery Tubbax, head of the project finance advisory team for Asia at Sumitomo Mitsui Banking Corporation (SMBC), noted that project bonds for PPPs will only be possible if the projects are well structured.
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