Manila, September 15, 2004
—The International Finance Corporation, the private sector arm of the World Bank Group, has received an advisory services mandate from the Philippines government to support the mobilization of private investment to build, maintain and manage the extension of Manila’s existing Light Rail Transit Line 1 system. Investment related to the concession is expected to be in the range of $800 million. IFC’s role is to encourage transparency, add credibility to the concession and bring global expertise to bear in designing an award process that encourages well-established infrastructure investors.
The project will expand the existing 15 kilometer LRT Line 1, 12 kilometers south from the existing Baclaran station. Expansion will include a station at Manila International Airport, as well as nine others. The new stations will incorporate intermodal facilities, such as bus depots and pedestrian links, to encourage ridership and promote reduced automobile traffic in the core areas of Metro Manila through a convenient mass transport alternative.
The project was initiated through an unsolicited offer to the government from SNC Lavalin International of Canada. In accordance with the BOT Law, the project is subject to a comparative and competitive proposal process, often referred to as a Swiss challenge. IFC will advise on the appropriate implementation of this Swiss challenge by assisting in organizing an open, transparent and competitive bidding process.
“In the face of enormous traffic congestion at the core of Metro Manila and a rapidly growing urban population, this project has enormous economic development potential in the Philippines” said IFC Philippines Country Manager Vipul Bhagat. “The Swiss Challenge required in this project should provide a major contribution to improved transparency and effectiveness in the delivery of public services in the Philippines, and we are pleased to support this process with IFC’s global infrastructure experience and commitment to achieving high standards and benefits for local communities.” IFC’s Advisory Services Director Bernard Sheahan added, “By offering commuters a positive mass transport alternative, this project should help reduce air pollution and improve everyday life for Manila residents who rely on public transportation”.
For more than 40 years, IFC has demonstrated a strong commitment to promoting private sector development in the Philippines. It recently was awarded an advisory mandate to promote rural power distribution. In its fiscal year that ended June 2004, IFC committed $89.7 million in loans and equity to five projects, primarily in the infrastructure sector.
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.7 billion for its own account and $6.6 billion held for participants in loan syndications.
