MPIC, Ayalas team up for LRT projects

MANILA, Philippines - Beefing up their arsenal, two of the country’s largest conglomerates – Ayala Corp. and Metro Pacific Investments Corp. have joined forces to bid for light rail projects in Metro Manila as they make a strong push for the infrastructure space.

In separate disclosures to the Philippine Stock Exchange, AC and MPIC said they signed yesterday an agreement to form an exclusive strategic partnership that will equally be owned by both parties to undertake the development of light rail projects and related real estate development undertakings.

The group is looking to initially bid for light rail transit projects identified under the government’s Public Private Partnership program (PPP).

Ayala and MPIC have a combined market capitalization of over P300 billion and boast of a solid track record and experience in developing large-scale infrastructure projects. They have proven their respective capabilities in delivering public utilities such as water infrastructure services (through Manila Water and Maynilad Water SErvices) and toll road operations and management.

The combination of their experiences in these sectors, plus their individual expertise and capabilities in other areas, power distribution and healthcare in the case of MPIC, and large scale mixed-use real estate projects in the case of Ayala, create a unique and powerful alliance that can bring immense value as the country seeks to improve its light rail transit system.

AC chairman and chief executive officer Jaime Augusto Zobel de Ayala said: “We are glad to be partnering with the Metro Pacific Investments group for this specific purpose. We each have unique strengths and capabilities that when combined, create a unique value proposition in rail development. We hope to contribute meaningfully in helping raise the standards of our public utilities. This is vital to our nation’s progress and competitiveness. Developing an efficient mass transit system is a huge endeavor which will be better served by the synergies created by this partnership.”

For his part, MPIC chairman, Manuel V. Pangilinan said, “We are pleased to share a common ground with Ayala Corp. through the light rail projects. This strategic alliance will create integrated solutions that will improve public transportation through our vision to transform the country’s light rail transit system into a network very much like those in Hong Kong, Singapore, Kuala Lumpur and Osaka.”

“The existing system is over capacity and under invested – the need to improve the existing rail systems now cannot be overemphasized. Our initiative to join hands in addressing these concerns, signifies our commitment to help Filipinos become more productive and to contribute to the country’s overall infrastructure development and economic growth,” Pangilinan further said.

This is not the first time Ayala and MPIC forged an alliance. In 2010, both companies teamed up to bid for the Angat water project.

The extension of the LRT line 1 to Cavite, estimated to cost P60 billion, is currently the biggest contract in the government’s lineup of infrastructure projects up for auction. Once completed, the lie will serve around 40,000 passengers per day.

The winning bidder will control the operation and management of the existing railway and the entire stretch upon completion of the Cavite extension.

Aside from AC and Metro Pacific, diversifying conglomerate San Miguel Corp. has also signified its interest to bid for the LRT lines 1 and 2.