DOTr, DMCI-Taisei withdraw from Section 1 of North-South railway contract package 1

The North-South Commuter Railway (NSCR) project is facing another hurdle after contractor DM Consunji Inc. (DMCI) and its Japanese partner Taisei Corp. withdrew from a section in their awarded contract to build portions of the railway project due to right-of-way issues.

In a disclosure to the Philippine Stock Exchange, DMCI said its order book declined by 9% to P42.4 billion in the first quarter of 2023 due to completion of several projects and the “descoping” of the NSCR Contract Package 01 (CP01).

DMCI said that “current obstructions prevented access, possession, and handover of the NSCR construction site.”

The “descoping” of the contract package resulted in exclusion of work valued at P7 billion from the Consunji-led firm’s project pipeline.

Sought to clarify, Transportation Assistant Secretary for Railways Jorjette Aquino said, in a Viber message, that “Taisei-DMCI Joint Venture (TDJV) did not unilaterally withdraw from CP01 Section 1.”

“It was a joint decision by DOTr and TDJV to do so…,” Aquino said.

In May 2021, DMCI and Taisei was awarded the CP01 to build the first phase of the NSCR project.

The NSCR Phase 1 has a total contract value of ¥114 billion or approximately P54 billion.

Aquino said the NSCR CP01 has a total length of 21  kilometers covering Solis Station in Tondo, Manila to Bocaue Station in Bulacan.

The official said that during the contract negotiations with DMCI and Taisei, it was agreed that their contract package would be divided into three sections “as it was anticipated that there would be right-of-way obstructions within CP01.”

Section 1 of CP01 spans 7.2 kilometers from Solis Station to West Valenzuela Station, while Sections 2 and 3 cover the 13.9-kilometer stretch from West Valenzuela Station to Bocaue Station.

“The right-of-way (ROW) obstructions in Section 1 include private properties (1,110 sqm), utilities, ROW Sharing between DOTr and DPWH NLEX-SLEX Segment 10, and affected PNR Facilities, among others,” Aquino said.

“It is further submitted that DOTr could not hand over the designated Construction Yard located in Caloocan Depot, as indicated in the Bid Docs, since DPWH (Department of Public Works and Highways) is currently using it for the NLEX-SLEX Segment 10 as they are also suffering delays in their implementation, which adversely affected NSCR CP01’s timeline,” she added.

Aquino said that the DOTr and the DMCI-Taisei Joint Venture agreed that Section 1 “will be omitted or descoped from CP01” due to potential challenges and costs associated with the aforementioned obstructions.

“This decision aimed to prevent potential costly claims due to delays caused by the obstructions and to avoid additional expenses related to TDJV's mobilization in the area,” she said.

“As of now, DOTr is planning to rebid Section 1 once the discussions to formalize such omission or descoping with TDJV are finalized,” she added.

The entire NSCR project spans 163 kilometers composed of a 40-kilometer line from Tutuban, Manila to Malolos, Bulacan, and its extensions: Malolos to Clark, Pampanga, and Manila to Calamba, Laguna.

Meanwhile, DMCI president and CEO Jorge Consunji said, “We’re expecting equitable compensation for the descoping, which is a standard contract condition in construction projects.” —KBK, GMA Integrated News