THE private investor who will construct and operate a rail system from Pasay to Cavite stands to enjoy a government guarantee, an official of state-run Light Rail Transit Authority (LRTA) said.

The official told The Manila Times that the agency would provide guarantee to the proponent of the $1.88 billion, or P97.97 billion LRT Line 1 South Extension Project.

The LRTA official said the guarantee that would be extended the proponent would comprise a fare subsidy to passengers and an assurance that there is no other rail system that would be built near the area, among others.

The government guarantee for the rail system project was approved during the NEDA Cabinet group meeting on June 9.

The project will be financed by official development assistance (ODA) from China, and will be offered to interest investors as a public-private partnership scheme.

The revision of the project’s financing scheme came on the heels of the deterioration of the country’s fiscal position.

Philippine economic managers earlier raised the government’s budget deficit ceiling to P250 billion this year from an earlier program of P199 billion, as officials plan to crank up infrastructure and social services spending in a bid to prevent the domestic economy from contracting.

“We expect to advertise the bidding document by August or September,” the official said.

The winning bidder will fund the design, construction, installation, and integration of the extension of the existing lines. It would also be in charge of the integrated operation and maintenance of the entire line and provision of enhancement works.

The project would extend the existing 15-kilometer LRT 1 by an additional 11.7 kilometers, of which about 10.5 kilometers will be elevated and 1.2 kilometers will be at-grade.

The extension will start from the existing line’s last station at Baclaran and will traverse the cities of Parañaque and Las Piñas in Metro Manila before reaching the municipality of Bacoor, Cavite.

The project will include eight new passenger stations, with provision for two additional ones. It is expected to serve 800,000 passengers a day and cut travel time from Bacoor to Monumento, Caloocan City, to less than an hour.