REPORTS from Manila at the end of January suggest that SNC Lavalin may shortly win approval from the government to build the long-planned LRT Line 1 southern extension from Baclaran to Dasmarinas and Cavite. The Canadians had been negotiating for years with the previous administration for the C$600m BOT project, but the current government favoured a local consortium which hoped to tap Japanese funding.

Now the Chairman of the Presidential Committee on Flagship Projects & Programmes, Roberto Aventajado, appears to have recognised that a firm offer is worth any number of speculative bids. Lavalin is offering to cut the cost by 4% and fund the scheme without any government support, with the aim of starting work on the 12 km line this year and opening it in 2003.

Meanwhile, Aventajado is also preparing to give the go-ahead to local developer Ayala Land for the proposed P18bn Calabarzon Express scheme, which would convert existing PNR lines into a 77 km suburban network serving the region just south of Manila. Ayala Land also hopes to tap Japan’s Obuchi Fund for a 40-year soft loan, but the government wants to see the private sector put up the 15% local financing contribution first.

Ayala Land is a major shareholder in Metro Rail Transit Corp, the private consortium building the US$655m MetroStar light rail line opened in December. With the first 10 km in service, ridership has peaked at 45000 a day, compared to a forecast of 600000, although this may rise following a fare cut imposed by President Estrada in January. MRT is still pushing for powers to extend the line to Monumento, on LRT Line 1.

MRTC has now put forward plans for a US$500m branch to serve Ninoy Aquino International Airport, after Airports Authority Chief Engineer Elipidio Mendoza warned that the airport was at risk of being strangled by road congestion when the fourth terminal opens this year. However, in mid-January Anglo-Philippine Holdings began discussions to dispose of its 16% stake in MRTC.