10 firms keen on NSCR O&M contract

By Ashley Erika O. Jose, Reporter

AT LEAST 10 COMPANIES have expressed interest in bidding for the operations and maintenance (O&M) contract for the North-South Commuter Railway (NSCR), the Department of Transportation (DoTr) said, as it extended the bid submission deadline to September.

“The bid submission deadline is now in September because we are still conducting one-on-one sessions with prospective bidders,” Transportation Undersecretary for Railways Timothy John R. Batan told reporters on Monday.

The DoTr is set to conduct another round of technical discussions with prospective bidders for the O&M contract in the coming weeks, Mr. Batan said.

The department initially set the bid submission deadline for July 29 but moved the deadline to September.

“The bidders have a lot of questions. Remember, the winning bidder will operate one of the largest metro rail systems in the region,” he said.

At present, the DoTr is in discussion with Japanese rail operators particularly Tokyo Metro Co., Ltd., the operator of Japan’s major rapid transit system; as well as the JR East and JR West, the operators of Japan’s high-speed railway network, Shinkansen.

“We also have French operators. The company that operates Paris’ metro system and other French (rail) operators are also interested in participating in the bidding,” Mr. Batan said.

In December, the RATP Group, which oversees and operates Paris Metro system, attended DoTr’s pre-bidding conference for the project.

The DoTr noted that other French transport companies like transportation and mobility networks company Keolis S.A. and rolling stock manufacturer Alstom also signified interest in the NSCR O&M contract.

“I think, overall, we have about 10 companies interested in participating. Again, we now have Japanese, French, and some Filipino companies,” Mr. Batan said.

Earlier, the DoTr said potential bidders, including San Miguel Corp. and the Lopez group’s construction company First Balfour, Inc., attended the pre-bid conference for the project.

The 147-kilometer NSCR will connect Malolos, Bulacan with Clark International Airport, and Tutuban, Manila with Calamba, Laguna. The O&M deal will cover 15 years from the signing date of the contract.

The NSCR is expected to be fully operational by January 2032, although partial operations of the Malolos to Valenzuela segment are projected by December 2027, while the Clark to West Valenzuela segment is expected to run by October 2028.

“It will attract foreign bidders, because it is very low risk to them. Aside from without skin in the game, payment is guaranteed with standby ADB (Asian Development Bank) credit,” Rene S. Santiago, an international consultant on transport development and former president of the Transportation Science Society of the Philippines said in a Viber message.

In March this year, the Philippines requested an $800-million loan from ADB to serve as a partial credit guarantee that will ensure payments to the operator of the NSCR project.

Mr. Santiago noted that domestic firms will not be able to participate in the bidding based on the criteria given by the DoTr. 

“Expect heavy foreign interest, and understandably so. The ADB credit guarantee removes virtually all downsides, while the bidding criteria effectively bar domestic participation,” he said.

According to the instructions to prospective bidders published in October last year, bidders must have a minimum net worth of P114.65 billion or its equivalent in foreign currency as of the 2024 financial year.

Bidders including consortium members or affiliates must include at least one entity with 10 years of experience in rail operations, specifically in managing a rail line that handles at least 45,000 passengers per hour in each direction.

At least one entity must have eight years of experience in maintaining railway infrastructure and systems, including the use of a computerized maintenance management system, and another must have eight years of experience in track and civil infrastructure maintenance.

PwC Philippines Chairman Roderick M. Danao said the NSCR O&M project is the largest rail operation in the region which makes it an attractive opportunity for railway operators.

“Its availability payment structure is particularly appealing because it provides more predictable revenues than a demand-risk concession, allowing operators to focus on delivering reliable services rather than assuming ridership risk,” Mr. Danao said in a Viber message.

He said the level of competition will depend on how risks will be outlined in the concession agreement, particularly the construction completion, asset handover and performance obligations.

“Investor appetite remains strongest for infrastructure projects that offer balanced risk allocation, predictable contractual arrangements, and strong government support. NSCR exhibits many of these characteristics,” Mr. Danao said.