Light Rail Manila Corporation

Light Rail Manila Corporation
Company typePrivate
FoundedJuly 22, 2014; 10 years ago (2014-07-22)
HeadquartersEngineering Building, LRTA Compound, Andrews Avenue, Pasay, Metro Manila, Philippines
Key people
  • Enrico R. Benipayo[1] (President & CEO)
  • (General Manager)
Websitelrmc.ph Edit this at Wikidata
Light Rail Manila Corporation
alt=A stylized image of a light rail vehicle on a track situated on a blue circle surrounded by a ring of gray. LIGHT RAIL MANILA CORPORATION is written below.
Overview
Franchise(s)LRT Line 1
Stations operated25
HeadquartersEngineering Building, LRTA Compound, Andrews Avenue, Pasay, Metro Manila, Philippines
LocaleMetro Manila
Dates of operationSeptember 12, 2015 (2015-09-12)–present

Light Rail Manila Corporation (LRMC) is a rail service company based in Pasay, Metro Manila, Philippines. It is a consortium of companies engaged in the operation and maintenance of the Manila Light Rail Transit System Line 1 (Line 1) since September 2015. The consortium is composed of Metro Pacific Investments Corporation and Sumitomo Corporation's Metro Pacific Light Rail Corp. (MPLRC); AC Infrastructure Holdings Corp. (a subsidiary of Ayala Corporation); and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.[2][3]

History

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Background

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The privatization of the entire maintenance and operation of the Manila Light Rail Transit Line 1 was the first infrastructure project under the Public-Private Partnership (PPP) program of the Benigno Aquino III administration announced by the Department of Transportation in May 2011. The project's objectives were to attract billions of pesos of investments from the private sector in order to improve the system's severely deteriorated condition, as well as to relieve the government of its obligation to spend more than ₱7 billion in annual subsidies just to keep the fares within reach of commuters.[4]

In 2012, an extension of the LRT Line 1 to Cavite was announced. The project also includes an operations and maintenance contract.[5] The project was approved by former President Benigno Aquino III in March 2012.[6] Meanwhile, the bidding for the project started on June 4, 2012.[7]

Development

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On April 24, 2012, Metro Pacific Investments Corporation (MPIC) and Ayala Corporation launched a partnership after both companies signed a memorandum of understanding.[8]

In November 2012, the consortium was cleared to proceed with the bidding process along with three other companies.[9] However, in 2013, the three other companies withdrew from the bidding. In August 2013, Ayala Corporation also dropped out of the consortium, leaving Metro Pacific as the lone bidder.[10] MPIC's bid was later declared as non-compliant, causing the bidding process to fail.[11]

The consortium once again submitted a bid on May 28, 2014.[12] Despite public opposition that the privatization may result in an increase in fares for the LRT Line 1,[13] on September 12, 2014, the Department of Transportation and Communications and the Light Rail Transit Authority awarded the project to the consortium.[14] The concession agreement was signed on October 2,[15] and the consortium took over the Line 1 operations on September 12, 2015.[3][2][16] Under the ₱65 billion 32-year concession agreement with the Department of Transportation and Light Rail Transit Authority, the company is mandated to carry out the rehabilitation of Line 1 as well as to provide 120 new train coaches to the system.[3] The concession also includes the ₱35 billion South Extension Project or Cavite Extension Project of the Line 1 to Niog station in Cavite which officially begun construction on May 7, 2019, after several years of delay due to right-of-way issues, as well as the north extension to the North Avenue Grand Central station in Quezon City whose exact location was settled in 2016 and which broke ground in September 2017.[2][17][18]

Light Rail Manila Corporation's parent companies Metro Pacific Investments Corporation and Ayala Corporation have earlier been awarded the tap-and-go fare payment system project for all three rail transit lines in Metro Manila, the Beep smart card rolled out in July 2015 through another joint venture in AF Payments Incorporated, as well as the automated fare collection system project which was rolled out in December 2015.[3] The parent companies also proposed a bid for the operations and maintenance of the LRT Line 2, and the ₱171 billion North–South Railway Project of the Philippine National Railways which included the rehabilitation and operation of the 478-kilometer (297 mi) railway.[3] The Line 2 privatization would later be shelved, while the North–South Railway Project would later be funded by foreign loans as two separate projects: the North–South Commuter Railway and the PNR South Long Haul.

Entry of Sumitomo and contemporary history

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On May 29, 2020, Sumitomo Corporation acquired a 34.9% stake in the subsidiary of Metro Pacific Investments Corporation that holds an effective 55 percent stake in Light Rail Manila Corporation (LRMC).[19]

On April 21, 2021, the company signed a memorandum of understanding with the Metals Industry Research and Development Center of the Department of Science and Technology for the repair of the LRT Line 1 trains, and the re-engineering, fabrication, and repair of train parts that are obsolete and/or no longer available in the market.[20]

On April 25, 2024, the Japan International Cooperation Agency (JICA) and Hankyu entered into an agreement with Sumitomo to collaborate on the operation and maintenance of the LRT Line 1. As part of the agreement, a part of shares indirectly held by Sumitomo in LRMC was transferred to JICA and Hankyu.[21][22] The agreement is Hankyu and JICA’s first investment in railway operation and maintenance business outside of Japan.

Ownership

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Ownership of the company before 2020:

  MPLRC (Metro Pacific) (55%)
  Ayala (35%)
  Macquarie (10%)

Ownership of the company since May 2020:

  MPLRC (Sumitomo) (19.2%)
  MPLRC (Metro Pacific) (35.8%)
  Ayala (35%)
  Macquarie (10%)

Before the entry of Sumitomo, Metro Pacific Investments had a 55% ownership in the company while Ayala Corporation had a 35% interest. The remaining 10% of the company is owned by Macquarie Infrastructure Holdings (Philippines).[23] After the entry of Sumitomo Corporation, which bought 34.9% of Metro Pacific's interest, Metro Pacific sold its economic interest of 19.2% in its concession,[24] reducing MPIC's stake to 35.8%. MPIC plans to increase its economic interest in the company after the 2022 Philippine presidential election.[25] A part of Sumitomo's shares was acquired by the Japan International Cooperation Agency (JICA) and Hankyu in April 2024.[22]

References

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  1. ^ Dela Cruz, Raymond Carl (November 7, 2024). "LRT-1 operator names new prexy, CEO". Philippine News Agency. Retrieved November 9, 2024.
  2. ^ a b c Periabras, Rosalie C. (September 14, 2015). "LRMC consortium takes over LRT-1 operations". The Manila Times. Archived from the original on September 18, 2015. Retrieved March 30, 2019.{{cite news}}: CS1 maint: unfit URL (link)
  3. ^ a b c d e Cabacungan, Gil; Camus, Miguel (September 15, 2015). "LRT1 now under Ayala, Metro Pacific management". Philippine Daily Inquirer. Retrieved March 30, 2019.
  4. ^ Montecillo, Paolo (May 9, 2011). "LRT, MRT privatization to benefit commuters, DoTC says". Philippine Daily Inquirer. Retrieved March 30, 2019.
  5. ^ "Philippines to seek bids for $1.4bn LRT-1 extension in 2012". Railway Technology. February 7, 2012. Retrieved December 13, 2021.
  6. ^ "Aquino approves 42 infrastructure projects worth P439-B in 2012". Rappler. January 3, 2013. Retrieved December 13, 2021.
  7. ^ Montecillo, Paolo G. (June 5, 2012). "Gov't starts bidding process for P30B LRT 1 extension deal". Philippine Daily Inquirer. Retrieved December 13, 2021.
  8. ^ "Ayala and MPIC: Rivals turn rail partners". Rappler. April 24, 2012. Retrieved December 13, 2021.
  9. ^ "Final: LRT-1 Cavite rail bidding on August 15". Rappler. July 29, 2013. Archived from the original on December 13, 2021. Retrieved December 13, 2021.
  10. ^ "MVP group lone bidder for LRT-1 extension". Rappler. August 15, 2013. Retrieved December 13, 2021.
  11. ^ "LRT-1 Cavite extension bidding 'a failure'". Rappler. August 29, 2013. Retrieved December 13, 2021.
  12. ^ Camus, Miguel R. (May 28, 2014). "Ayala-Metro Pacific consortium submits lone bid offer for LRT 1 extension". Philippine Daily Inquirer. Retrieved December 13, 2021.
  13. ^ Salamat, Marya (October 2, 2014). "Bayan rues 'End of an era' as Aquino privatizes LRT 1". Bulatlat. Retrieved February 20, 2022.
  14. ^ "DOTC awards LRT-1 Cavex PPP; starts bid for LRT-2 O&M". Official Gazette of the Republic of the Philippines. September 13, 2014. Retrieved December 13, 2021.
  15. ^ "PPP contract signed for Manila LRT 1 project". InfraPPP. October 6, 2014. Archived from the original on January 24, 2021. Retrieved December 13, 2021.
  16. ^ "Company Profile". Retrieved March 30, 2019.
  17. ^ Rey, Aika (March 4, 2019). "LRT1 Cavite extension construction to begin April 2019". Rappler. Retrieved March 30, 2019.
  18. ^ Schnabel, Chris (September 29, 2017). "Construction of MRT-LRT common station finally begins". Rappler. Retrieved March 31, 2019.
  19. ^ Dumlao-Abadilla, Doris (May 29, 2020). "Sumitomo buys into MPIC's railway business". Philippine Daily Inquirer.
  20. ^ "LRMC and DOST-MIRDC ink knowledge-sharing partnership on rail technology". Light Rail Manila Corporation. April 23, 2021. Retrieved April 12, 2022.
  21. ^ Cruz, Beatriz Marie (May 13, 2024). "JICA announces Sumitomo, Hankyu tie-up to enhance LRT-1 operations". BusinessWorld Online. Retrieved June 8, 2024.
  22. ^ a b "Hankyu Corporation and JICA participate in LRT-1 project (Manila, the Philippines) partly owned by Sumitomo Corporation". Sumitomo Corporation. June 3, 2024. Retrieved June 8, 2024.
  23. ^ "Light Rail Manila consortium bids for $1.5bn LRT 1 extension project". Railway Technology. May 28, 2014. Retrieved February 20, 2022.
  24. ^ "MPIC sells economic interest of 19.2% in its LRT1 concession through sale of 34.9% of Metro Pacific Light Rail Corporation to Sumitomo Corporation" (PDF). Metro Pacific Investments. Retrieved February 20, 2022.
  25. ^ Romero, Maria (May 5, 2022). "MPIC eyes Ayala LRT stake after polls". Daily Tribune. Retrieved May 5, 2022.
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