REPUBLIC OF THE PHILIPPINES LIGHT RAIL TRANSIT AUTHORITY PREPARATORY STUDY FOR LRT LINE2 EXTENSION PROJECT FINAL REPORT OCTOBER 2011 JAPAN INTERNATIONAL COOPERATION AGENCY ORIENTAL CONSULTANTS CO., LTD. KATAHIRA & ENGINEERS INTERNATIONAL TONICHI ENGINEERING CONSULTANTS, INC. EID JR（先） - 11 146 REPUBLIC OF THE PHILIPPINES LIGHT RAIL TRANSIT AUTHORITY PREPARATORY STUDY FOR LRT LINE2 EXTENSION PROJECT FINAL REPORT OCTOBER 2011 JAPAN INTERNATIONAL COOPERATION AGENCY ORIENTAL CONSULTANTS CO., LTD. KATAHIRA & ENGINEERS INTERNATIONAL TONICHI ENGINEERING CONSULTANTS, INC. PREPARATORY STUDY FOR LRT LINE 2 EXTENSION PROJECT DRAFT FINAL REPORT TABLE OF CONTENTS LOCATION MAP ABBREVIATION INTRODUCTION CHAPTER 1 BACKGROUND & NECESSITY 1.1 Manila Transport Sector Condition ............................................................................................1-1 1.1.1 General................................................................................................................................1-1 1.1.2 Road Condition ...................................................................................................................1-3 1.1.3 Urban Railway Condition ...................................................................................................1-3 1.1.4 Railway Sector Future Projects...........................................................................................1-5 1.2 Confirming Transportation Sector’s Policies and High-priority Projects.................................1-10 1.2.1 Master Plan for Transportation in Metro Manila ..............................................................1-10 1.2.2 Prioritized Transportation Projects....................................................................................1-10 1.2.3 Railway Sector High-Priority Projects..............................................................................1-12 1.2.4 PPP Projects......................................................................................................................1-13 1.3 Review of Legal Framework ....................................................................................................1-14 1.3.1 Foreword ...........................................................................................................................1-14 1.3.2 PPP in the Philippines .......................................................................................................1-14 1.3.3 Methodology of Legal Review..........................................................................................1-16 1.3.4 The Laws Comprising the Legal Framework....................................................................1-16 1.3.5 The Enabling Law (General) – BOT Law.........................................................................1-18 1.3.6 The Enabling Laws (Sector-Specific) – Decrees and Charters .........................................1-22 1.3.7 Specific Laws – Government Procurement Reform Act (GPRA).....................................1-23 1.3.8 The Impact of RA-9184 and its attendant Executive Order’s...........................................1-25 1.3.9 Application of the Legal Framework to LRT2 Extension Project – PPP Scheme ............1-26 1.3.10 Amendment to the BOT Law............................................................................................1-27 1.4 Review of Transportation Sector PPP Projects, Mobilization of Private Resources and Privatization in the Philippines ................................................................................................1-30 1.4.1 Rail Transport PPP Projects ..............................................................................................1-30 1.4.2 Road Transport PPP Projects.............................................................................................1-34 1.4.3 Air Transport PPP Projects................................................................................................1-36 1.4.4 Sea Transport PPP Projects ...............................................................................................1-39 1.4.5 Realistic Eligibility and Requirements for participation in this project............................1-42 1.5 Overview of Implementing Agency..........................................................................................1-43 1.5.1 Outline of Implementing Agency......................................................................................1-43 1.5.2 Project Implementing Organization ..................................................................................1-50 i 1.5.3 Evaluation of Capacity of Implementing Agency and Necessary Measures for Capacity Enhancement......................................................................................................1-51 1.5.4 Overview of existing LRTA Infrastructure........................................................................1-52 1.6 Financial Analysis of Executing Agency..................................................................................1-55 1.6.1 Executing Agency.............................................................................................................1-55 1.6.2 Financial System of Executing Agency ............................................................................1-55 1.6.3 Financial Situation of Executing Agency..........................................................................1-56 1.6.4 LRTA Financial Restructuring ..........................................................................................1-59 1.6.5 Issues and Matters for the Executing Agency in terms of Project Implementation Capacity ............................................................................................................................1-61 1.6.6 Description of Risks..........................................................................................................1-62 1.7 Clarification of Issues and review of development/business plans of other implementing institutions in Manila metropolitan area...................................................................................1-64 1.7.1 Review of development/business plans of other implementing institutions .....................1-64 1.7.2 Establishing challenges of the implementing institution...................................................1-68 1.8 Confirming Assistance Policies and Programs of other Donors for Transport Sector..............1-69 1.8.1 PDF and International Development Community.............................................................1-69 1.8.2 The World Bank ................................................................................................................1-70 1.8.3 Asian Development Bank .................................................................................................1-71 1.8.4 AusAID on National Transport Plan.................................................................................1-72 1.8.5 Necessity of the Project by Reviewing Other Donors' Projects and Assistance ...............1-72 1.9 Confirming Necessity of Project...............................................................................................1-73 CHAPTER 2 DEMAND FORECAST 2.1 Review of passenger count in LRT line 2...................................................................................2-1 2.1.1 Average daily passenger......................................................................................................2-1 2.1.2 Hourly Peak Load Passengers on Board .............................................................................2-1 2.1.3 Fare revenue........................................................................................................................2-2 2.1.4 Passenger count target.........................................................................................................2-3 2.2 Examination of extension routes ................................................................................................2-3 2.3 Creation of modal split models...................................................................................................2-4 2.3.1 Previous modal split model in Metro Manila......................................................................2-4 2.3.2 SP survey.............................................................................................................................2-5 2.3.3 Modal split model .............................................................................................................2-10 2.4 Demand forecast for the extended routes .................................................................................2-10 CHAPTER 3 DEVELOPMENT OF PROJECT PLAN 3.1 Review of Standards and Specifications of Existing Railway Facilities and Systems ...............3-1 3.1.1 Railway Civil Engineering and Facilities ...........................................................................3-1 3.1.2 The Issue of Existing Civil Structure ..................................................................................3-4 3.1.3 The Issue of Railway System..............................................................................................3-8 3.2 Geotechnical Survey.................................................................................................................3-11 3.2.1 Geology in Metro Manila..................................................................................................3-11 3.2.2 Geology in Metro Manila..................................................................................................3-15