PROJECTS

Light Rail Transit PPP, Philippines

The problem

Traffic congestion was costing Manila US$67 million per day in lost output. Rehabilitation and extension of the elevated metro-rail line ‘LRT1’ was urgently needed. The government planned a PPP to provide finance and ensure accountable operation and maintenance of the system, but existing public entities were not well equipped to manage a PPP contract.

How we helped

Working with IFC, Castalia was engaged to help the government create a contract management office to supervise and manage the PPP contract for the US$1.5 billion project. We advised on roles, organization, processes and required skills for PPP contract management.

Impact

The LRT1 PPP contract was awarded on October 2014, with $925 million in private investment committed. Stations have been rehabilitated and new train sets added, increasing frequency of service. In May 2019, construction commenced on the LRT1 extension which will add 12 km to the existing 21 km LRT1 system. Passenger throughput is expected to increase by 300,000 to 800,000 passengers daily, while CO2 emissions are projected to be 40,000 tones per year lower than they would be without the project.