Light Rail Manila Corp., a joint venture of Metro Pacific Investments Corp. and Ayala Corp., has allotted $200 million over the next two years for the rehabilitation of the oldest metro system in Southeast Asia.
AC Infrastructure Holdings Corp. president and chief executive Eric Francia told reporters his company would spend $150 million to $200 million, or P10 billion, to rehabilitate and upgrade the rolling stocks, railway stocks, train stations and signaling system of the LRT Line 1.
“Our primary purpose is to serve the public and to get reasonable returns because we are answerable to our shareholders also,” Francia said.
LRMC plans to increase the capacity of LRT Line 1 by 30 percent within the next 12 months.
Francia also said the company was in talks with the Department of Transportation and Communications on the compensation for the proposed rehabilitation of the system.
LRMC took over the operation and maintain of LRT Line 1 on September 12. It currently accommodates a daily average of 400,000 commuters from Baclaran in Pasay City to Roosevelt in Quezon City.
Francia added the consortium expects to sign financing package for the P65-billion Light Rail Transit Line 1 Cavite extension project and upgrade of the existing LRT Line 1 system in the first quarter of the year.
The project cost is almost over P40 billion, which includes the rehab of the LRT Line 1and the extension of the system to Cavite.
When asked how much is the financing requirements of the company, Francia said “we are still finalizing it.”
“The typical project finance [or] equity ratio range would be 60 to 70 percent debt,” he said.
Under the concession agreement signed by LRMC with the Light Rail Transit Authority, the consortium is allowed to finance 70 percent of the project cost through borrowings and loans and the 30 percent through equity infusion by the members of the consortium.
LRMC is a responsible for the construction of the 11.7-kilometer extension from the present end point in Baclaran to the Niog area in Bacoor, Cavite.
The extended rail line is expected to help increase the capacity of LRT 1 from 500,000 to 800,000 passengers daily and benefit more than four million residents in the southern part of Metro Manila and of Cavite.
LRMC won the P65-billion LRT Line 1 extension project, with a premium bid of P9.35 billion in September 2014.
Metro Pacific Light Rail Corp. controls 55 percent of the consortium while AC Infrastructure Holdings Corp. has 35 percent. Philippine Investment Alliance for Infrastructure’s Macquarie Infrastructure Holdings (Philippines) Pte Ltd. owns 10 percent.