LEGAZPI CITY, June 2 (PNA) — The Php 170-billion South Line Railway project under a Public-Private-Partnership scheme is open for investors, Albay Gov. Joey Sarte Salceda said Tuesday.
Salceda said the Department of Transportation and Communications (DOTC) will auction off the railway project of the Philippine National Railways to interested bidders.
In an email statement, the Albay governor said the Ayala Corp., which will partner with the Metro Pacific Corp. and the San Miguel Corp., has expressed interest in participating in the bidding process for the multibillion-peso project from the PNR-Tutuban to Legazpi City then to Matnog, Sorsogon.
“The participation of the investors in this projects is a welcome move, and I feel affirmed that this would be a viable investment,” he said.
Salceda said that as Bicol Regional Development Council chairman, he has persistently followed up the project with the PPP Center to the DOTC to the National Economic Development Authority (NEDA) and participated in the discussions and deliberations on the project.
Earlier reports had it that the NEDA board began talks with the Prime Orion Philippines Inc., which operates the mall in Tutuban.
Salceda said he chanced upon Ramon S. Ang during a wedding ceremony where both of them were sponsors and they talked about the project.
”I explained to him the attractiveness of the project,” he said.
Salceda, a known economist, said the railway project investment under the PPP would carry a 24-percent pure internal rate of return (IRR) on investment and Php30-billion net present value (NPV) at 15-percent special drawing right (SDR).
He explained that the IRR, NPV and SDR are investment formulas that determine the feasibility and investment potentials of a project.
Ang, who is the vice-chairman and chief operating officer of San Miguel Corp. (SMC), said San Miguel will surely compete for the largest PPP project in the Philippines, Salceda said.
The project will revive the PNR Manila-Legazpi “Bicol Express” Line, spanning 653 kilometers.
The proponent will have to rehabilitate the southbound railway, which starts at the Tutuban Center in Manila and will run through Laguna, Batangas and Quezon, and end up in Legazpi.
Rehabilitation will include modernization of the railways, stations and rolling stock, Salceda said.
He said the modernization and rehabilitation of the PNR south line will cut by more than one-half the travel time from Tutuban to Legazpi to six hours from the previous 15 hours travel time.
A DOTC press statement said construction was expected to start in early next year and commercial operation was set on 2020.
The NEDA Board approved the project last February. (PNA)