Light Rail Manila Corporation

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 {{Philippine peso|7 billion}} in annual subsidies just to keep the fares within reach of commuters.{{cite news|url=https://business.inquirer.net/1567/lrt-mrt-privatization-to-benefit-commuters-dotc-says |title=LRT, MRT privatization to benefit commuters, DoTC says |work=Philippine Daily Inquirer |author=Montecillo, Paolo |date=May 9, 2011 |access-date=March 30, 2019}}

In 2012, an extension of the LRT Line 1 to Cavite was announced. The project also includes an operations and maintenance contract.{{Cite news|title=Philippines to seek bids for $1.4bn LRT-1 extension in 2012|website=Railway Technology|url=https://www.railway-technology.com/news/newsphilippines-to-seek-bids-for-14bn-lrt-1-extension-this-year/|date=7 February 2012|access-date=2021-12-13}} The project was approved by former President Benigno Aquino III in March 2012.{{Cite news|title=Aquino approves 42 infrastructure projects worth P439-B in 2012|url=https://www.rappler.com/business/19034-how-many-projects-did-pnoy-approve-in-2012/|work=Rappler|date=3 January 2013|access-date=13 December 2021}} Meanwhile, the bidding for the project started on June 4, 2012.{{Cite news|title=Gov’t starts bidding process for P30B LRT 1 extension deal|first=Paolo G.|last=Montecillo|work=Philippine Daily Inquirer|date=June 5, 2012|access-date=2021-12-13|url=https://business.inquirer.net/63261/gov%E2%80%99t-starts-bidding-process-for-p30b-lrt-1-extension-deal}}

On April 24, 2012, Metro Pacific Investments Corporation (MPIC) and Ayala Corporation launched a partnership after both companies signed a memorandum of understanding.{{Cite news|title=Ayala and MPIC: Rivals turn rail partners|url=https://www.rappler.com/business/4294-ayala-mpic-partner-for-light-rail-system-bid/|work=Rappler|date=April 24, 2012|access-date=December 13, 2021}}

In November 2012, the consortium was cleared to proceed with the bidding process along with three other companies.{{Cite news|title=Final: LRT-1 Cavite rail bidding on August 15|url=https://www.rappler.com/business/industries/35037-final-lrt-1-cavite-rail-bid-on-august-15/|work=Rappler|date=29 July 2013|access-date=13 December 2021|url-status=live|archive-url=https://web.archive.org/web/20211213093946/https://www.rappler.com/business/industries/35037-final-lrt-1-cavite-rail-bid-on-august-15/|archive-date=13 December 2021}} 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.{{Cite news|title=MVP group lone bidder for LRT-1 extension|url=https://www.rappler.com/business/36511-pangilinan-mpic-lone-bidder-lrt-1-cavite-extension-project/|work=Rappler|date=15 August 2013|access-date=13 December 2021}} MPIC's bid was later declared as non-compliant, causing the bidding process to fail.{{Cite news|title=LRT-1 Cavite extension bidding ‘a failure’|url=https://www.rappler.com/business/industries/37598-lrt1-bidding-failure/|work=Rappler|date=29 August 2013|access-date=13 December 2021}}

The consortium once again submitted a bid on May 28, 2014.{{Cite news|title=Ayala-Metro Pacific consortium submits lone bid offer for LRT 1 extension|first=Miguel R.|last=Camus|work=Philippine Daily Inquirer|date=May 28, 2014|access-date=2021-12-13|url=https://business.inquirer.net/171636/ayala-metro-pacific-consortium-submits-lone-bid-offer-for-lrt-1-extension}} Despite public opposition that the privatization may result in an increase in fares for the LRT Line 1,{{Cite news|first=Marya |last=Salamat |title=Bayan rues ‘End of an era’ as Aquino privatizes LRT 1 |url=https://www.bulatlat.com/2014/10/02/bayan-rues-end-of-an-era-as-aquino-privatizes-lrt-1/ |work=Bulatlat |date=2014-10-02 |access-date=2022-02-20}} on September 12, 2014, the Department of Transportation and Communications and the Light Rail Transit Authority awarded the project to the consortium.{{Cite web|title=DOTC awards LRT-1 Cavex PPP; starts bid for LRT-2 O&M|url=https://www.officialgazette.gov.ph/2014/09/13/dotc-awards-lrt-1-cavex-ppp-starts-bid-for-lrt-2-om/|website=Official Gazette of the Republic of the Philippines|date=13 September 2014|access-date=13 December 2021}} The concession agreement was signed on October 2,{{cite news |title=PPP contract signed for Manila LRT 1 project |url=https://www.infrapppworld.com/news/ppp-contract-signed-for-manila-lrt-1-project |url-status=live |archive-url=https://web.archive.org/web/20210124095412/https://www.infrapppworld.com/news/ppp-contract-signed-for-manila-lrt-1-project |archive-date=January 24, 2021 |access-date=December 13, 2021 |date=October 6, 2014 |work=InfraPPP}} and the consortium took over the Line 1 operations on September 12, 2015.{{cite web|url=http://lrmc.ph/company-profile/ |title=Company Profile |access-date=March 30, 2019}} Under the {{Philippine peso|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. The concession also includes the {{Philippine peso|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.{{cite news|url=https://www.rappler.com/business/224932-lrt1-cavite-extension-construction-begin-april-2019 |title=LRT1 Cavite extension construction to begin April 2019 |work=Rappler |author=Rey, Aika |date=March 4, 2019 |access-date=March 30, 2019}}{{cite news|url=https://www.rappler.com/business/183776-mrt-lrt-common-station-groundbreaking |title=Construction of MRT-LRT common station finally begins |work=Rappler |author=Schnabel, Chris |date=September 29, 2017 |access-date=March 31, 2019}}

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. The parent companies also proposed a bid for the operations and maintenance of the LRT Line 2, and the {{Philippine peso|171 billion}} North–South Railway Project of the Philippine National Railways which included the rehabilitation and operation of the {{convert|478|km|mi|sp=us|adj=on}} railway. 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.

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).{{Cite news|first=Doris|last=Dumlao-Abadilla|title=Sumitomo buys into MPIC’s railway business|url=https://business.inquirer.net/298579/sumitomo-buys-34-9-of-mpics-railway-business/amp|work=Philippine Daily Inquirer|date=May 29, 2020}}

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.{{Cite news|title=LRMC and DOST-MIRDC ink knowledge-sharing partnership on rail technology |date=April 23, 2021 |url=https://lrmc.ph/2021/04/23/lrmc-and-dost-mirdc-ink-knowledge-sharing-partnership-on-rail-technology/ |publisher=Light Rail Manila Corporation |access-date=April 12, 2022}}

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.{{Cite web |last=Cruz |first=Beatriz Marie |date=2024-05-13 |title=JICA announces Sumitomo, Hankyu tie-up to enhance LRT-1 operations |url=https://www.bworldonline.com/economy/2024/05/13/594711/jica-announces-sumitomo-hankyu-tie-up-to-enhance-lrt-1-operations/ |access-date=2024-06-08 |website=BusinessWorld Online |language=en-US}}{{Cite web |date=2024-06-03 |title=Hankyu Corporation and JICA participate in LRT-1 project (Manila, the Philippines) partly owned by Sumitomo Corporation |url=http://www.sumitomocorp.com/en/jp//news/topics/2024/group/20240507 |access-date=2024-06-08 |website=Sumitomo Corporation |language=en}} The agreement is Hankyu and JICA’s first investment in railway operation and maintenance business outside of Japan.

{{Pie chart

| caption= Ownership of the company before 2020:

| label1 = MPLRC (Metro Pacific)

| value1 = 55

| color1 = #0048BA

| label2 = Ayala

| value2 = 35

| color2 = #FF7F00

| label3 = Macquarie

| value3 = 10

| color3 = #79E491

}}

{{Pie chart

| caption= Ownership of the company since May 2020:

| label1 = MPLRC (Sumitomo)

| value1 = 19.2

| color1 = #C0E8D5

| label2 = MPLRC (Metro Pacific)

| value2 = 35.8

| color2 = #0048BA

| label3 = Ayala

| value3 = 35

| color3 = #FF7F00

| label4 = Macquarie

| value4 = 10

| color4 = #79E491

}}

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).{{Cite news|website=Railway Technology |title=Light Rail Manila consortium bids for $1.5bn LRT 1 extension project |url=https://www.railway-technology.com/uncategorised/newslight-rail-manila-consortium-bids-for-15bn-lrt-1-cavite-extension-project-4280503/ |date=May 28, 2014 |access-date=February 20, 2022}} 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,{{Cite web|title=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|url=https://www.mpic.com.ph/wp-content/uploads/2020/06/17C-MPLRC-disposition-of-economic-interest-in-LRT1-concession-to-Sumitomo-sent-02-June-2020.pdf|publisher=Metro Pacific Investments|access-date=February 20, 2022}} reducing MPIC's stake to 35.8%. MPIC plans to increase its economic interest in the company after the 2022 Philippine presidential election.{{Cite news|first=Maria |last=Romero |title=MPIC eyes Ayala LRT stake after polls |url=https://tribune.net.ph/index.php/2022/05/05/mpic-eyes-ayala-lrt-stake-after-polls/ |work=Daily Tribune |date=2022-05-05 |access-date=2022-05-05}} A part of Sumitomo's shares was acquired by the Japan International Cooperation Agency (JICA) and Hankyu in April 2024.

{{Reflist}}

• [http://lrmc.ph Official website of Light Rail Manila Corporation]

{{Department of Transportation and Communications}}

{{Transportation in the Philippines}}

Category:Companies based in Pasay

Category:Rail transportation in Metro Manila

Category:Department of Transportation (Philippines)

Category:Transportation companies of the Philippines

Category:Philippine companies established in 2014

Category:Privately held companies of the Philippines