MRT Procurement and Maintenance:

Philippine Experience:
Rommel C. Gavieta MA (URP), MSc (Eng)
Metro Rail Transit Line-3 Project Adviser
York Center for Asian Research, York University
Metro Manila Background Information
Metro Manila as a Mega-City and Traffic Congestion
21 mega-cities are in Asia out of 36 mega-cities (2012)
Metro Manila is second to Tokyo with 70% of the population taking public transportation.
(http://ncts.upd.edu.ph/old/research/docs/research/papers/tiglao-EASTS2007-02.pdf)
Jica experts has said that Philippine the government would need to invest P2.3 trillion through
2030 to overhaul transportation infrastructure in Metro Manila.
It estimated that about P2.4 billion in potential income was being lost daily due to congestion
at the capitals roads and railways.
(http://www.jica.go.jp/philippine/english/office/topics/news/130801.html and
http://business.inquirer.net/158419/jicas-expanded-mass-transport-study-seen-out-within-
2014#ixzz35kflDDX7)
Proposed Metro Manila LRT/MRT and Rail Lines
Proposed Lines (JICA):
Primary Lines:
1. PNR rehabilitation or LRT5 (PhP25b Malolos-
Calamba), (LRT5)
2. MRT4 and MRT7 (Recto to Banaba PhP180billion),
3. Mega-Manila Subway (550billion)
4. Baclaran-Bacoor or LRT6 (PhP60billion PPP awarded)
Secondary:
4. Ortigas-Angono (PhP32b),
5. Marikina-Katipunan (PhP32b),
6. Alabang-Zapote (PhP27b)
7. Zapote-General Tias (PhP26b)
5
Matching Design Capacity with
Appropriate Types of Rolling Stocks
Seven generic types of train:
Shorter Distance Self-Powered (diesel,
generally with 75 mph maximum speed);
Middle Distance Self-Powered (diesel, with 90/
100 mph capability);
Long Distance Self-Powered (diesel, with 100/
110/ 125 mph capability);
Shorter Distance Electric (generally with 75
mph maximum speed);
Middle Distance Electric (with 90/ 100/ 110
mph capability. Some future trains may require
125 mph capability);
Long Distance Electric (with 100/ 110/ 125 mph
capability);
Very High Speed Electric (140 mph and above,
for domestic services on HS1 and HS2).
(ATOC; Long Term Passenger Rolling Stock
Strategy for the Rail Industry; Feb 2013)
Existing Metro Manila LRT/MRT and Rail Lines
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Existing LRT/MRT and PNR Lines
Capacities LRT/MRT and PNR Lines
LRT1: 15km competed 1985 (street cars operating as LRTs)
430,000 passengers a day
139 cars operating only 80 cars
550,000 passenger a day design capacity
LRT2: 14Km completed 2008 (MRT operating as LRT)
250,000 passengers a day
72 cars operating only 43 cars
360,000 passenger a day design capacity
MRT3: 16km completed 2000 (street cars operating as MRT)
450,000 passengers a day
70 cars operating 40 cars
350,000 passenger design capacity
PNR: 56 km Urban Line
100,000 passengers a day in a traffic corridor that carries
approximately 1.0million commuters a day.
18 cars and 56km
Maintenance Benchmarks
Key Performance Indicators
by MTR (Hong Kong) and Comet
Key Customers Insights related to the Operation
and Maintenance of Urban Rail Transit System
Key Customer Needs Related to the
Maintenance of Urban Rail Transit Systems
Rolling Stock and Track Maintenance Co-
relationship
Strong mutual dependency and interference
of wear and tear of key assets (rolling stock
and infrastructure) this does not hold true
for gas and water, telecom and electricity, or
air transport
The cost and quality of train operations
depend on the condition of the tracks
(high maintenance requirement for
rolling stock, low maximum speed, etc.
if tracks are in bad condition)
The cost of infrastructure maintenance
depends on the condition and operation
of rolling stock (high wear and tear of
tracks if wheels are uneven, speed is
high, braking is strong, etc.)
Trend Towards Single Point of Responsibility under
Total Cost of Ownership Procurement Model
Total Cost of Ownership
(Maintenance done by Alstom)
Total Cost of Ownership
MRT3 Project Philippines
2%
14%
57%
16%
11%
Personnel (Operation) Maintenance Equity Rental Repayment
Debt Repayment Project cost
MRT Rolling Stock Fleet
(73 procured by private sector owner and 48 procured by public sector
operator subject to consent of private sector owner)
MRT3 (Private Sectr Procurement)
73-cars from CKD procured by the Private Owners of the Assset
Reliability Centric maintenance service by Sumitomo
Corporation from Completion Date (2000) to 2012 with a
guaranteed availability of 60 cars, spare part inventory and
refurbishment requirement.
Service centric maintenance service by local company with no
spare part inventory requirement and no refurbishment
commitment
MRT3 (Public Sector Procurement)
48 cars from CNR procurement by operator
Deployment for revenue service requires the consent of the
owner of the MRT3 Asset and may pay trackage fees to alleviate
capacity congestion.
CNR has not produced Electric and double articulated Light Rail
Vehicles and delivered only diesel locomotives to MTR
Comparison of Private Sector and Public Sector
Procurement of Maintenance Service
2000-2012 2012 2012-2014
Terms of
Reference (TOR)
defined under the
Build, Lease and
Transfer (BLT)
Agreement OR
Actual
Performance
TOR was
annunced as
similar tom the
original TOR
Actual
Performance
TOR and lately
revised under a
memo from
DOTC Usec Lotilla
Actual
Performance
Availability 60 cars 60 cars 60 cars NA 54 cars 40 cars
Part 6-month spare
part inventory
yes none canibalization of
parts
none canibalization of
parts
Overhauling required
undertaking
completed required but not
practical
implementation
None required but not
practical
implementation
None
Ridership 350,000 550,000 350,000 450,000 350,000 430,000
COMET
Bencjmark for
reliability
Sumitomo Corp. PH Trams APT Global
LESS THAN 5 INCIDENCE OF
REVENUE SERVICE INTERRUPTION A
YEAR THAT IS GREATER THAN 5-
MINUTES
LESS THAN 5 INCIDENCE OF
GREATER THAN 5 INCIDENCES OF
REVENUE SERVICE INTERRUPTION A
YEAR THAT IS GREATER THAN 5-
MINUTES
GREATER THAN 5 INCIDENCES OF
REVENUE SERVICE INTERRUPTION A
YEAR THAT IS GREATER THAN 5-
MINUTES
Total Cost Of Operation/Acquisition
and Declining Ridership as a Result of Public Sector
Procurement of Maintenance Services
-
20.00
40.00
60.00
80.00
100.00
120.00
-
1,000,000,000.00
2,000,000,000.00
3,000,000,000.00
4,000,000,000.00
5,000,000,000.00
6,000,000,000.00
7,000,000,000.00
8,000,000,000.00
9,000,000,000.00
2000 2001 2002 2003 2005 2007 2008 2009 2010 2011 2012 2013 2014
Personnel Services Maintenance and Other Maintenance Services
Equity Rental Payment Debt payment (estimate)
Farebox Revenue Subsidy
Subsidy per passenger
Indicative trend of
effect of shift from a
privately
administered
maintenance
service. to a publicly
administered
maintenance service
Design Capacity and Operating Capacity
South East Asian Comparison
Recognition of Current Framework for Procurement
Practice of Rail Systems and Rolling Stock
Public Sector Current Practice Proposed Action Moving Forward
Disconnected Procurement and O&M Policy
Recommendation
Harmonized procurement and O&M Policy
Adopt strategic decisions about rolling stock
procurement and specification should be taken
centrally. This critical given the level of
fragmentation of the sector/industry
(Butcher, L; Railways: rolling stock
Standard Note: SN3146; 31 October 2013; House of
Commons)
Procurement Policy driven specification and lowest
cost
Recommendation:
Procurement Policy that is Performance Standard
centric
Technical Strategy Leadership group; The Future Railway; 2012 UK
Current Level of
Awareness
Understanding Operations and Maintenance Cost
Rules of Thumb
Operation and maintnance represents approximately 80% of the Total Cost of Ownership
(TCO) .
In the case of the MRT3, over the concession period the ratio is 86% O&M and 14% project
cost
In the case of MRT3, the ratio distribution of the maintenance fee is 60% rolling stock and
40% infrastructure
Approximately 60% of maintenance cost are personnel cost and 40% for material and parts
Maintenance cost is the major cost position subject to optimization as energy and
depreciation stay consistent during lifecycle of rolling stock fleet.
(Author own calculation and Wyman, O.; Lean Rolling Stock Maintenance; 2009 oliverwyman
The Future and Recommendation
Proposed JICA Mega Manila
Rail Transit Development Plan (2015-2030)
Modified Predictive Maintenance Framework
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There is a continual need to employ a Kaizening* process that confronts and combats
the challenges of common constraints, in order to create adaptive and balanced
maintenance programs, that are justifiably well planned and timely executed.
(http://www.apta.com/mc/rail/papers/Papers/WeissM-Challenges-of-Matching-Maintenance-Programs-to-an-Aging-
Rolling-Stock-Fleet.pdf)
Traditional Procurement of an Urban Transit System
and Maintenance Works of an Urban Transit System
Market Demand
Customer Needs
and Expectations
PPP ODA PPP ODA
Procurement
Group
Procurement
Group
Specifications Rail
System and Non-
Rail System
Specifications Rail
System and Non-
Rail System
Porcurement of
Civil Works
EPC Contractor Regular
Maintenance
Works
Procurement of
Rolling Stock
LRV Manufacturers Refurbishment
Works
Procurement of
Elctromechnical
Systems
Electromechanical
Suppliers
Upgrades and
Expansion of
Capacities
Concession Framework or Public Sector Administered Concession Framework or Public Sector Administered
Piecemeal Procuremnt of Sub-components of an Urban
Rail Transit System
Contractor and Supplier
Market Demand Contractor and
Supplier
Customer Needs
and Expectations
PPP ODA PPP ODA
Procurement
Group
Procurement
Group
Specifications Rail
System and Non-
Rail System
Single Point of
Responsibility
Contracting Works
Single Point of
Reeeeponsibility
Maintenance
Works
Specifications Rail
System and Non-
Rail System
Porcurement of
Civil Works
EPC Contractor Regular
Maintenance
Works
Procurement of
Rolling Stock
LRV Manufacturers Refurbishment
Works
Procurement of
Elctromechnical
Systems
Electromechanical
Suppliers
Upgrades and
Expansion of
Capacities
Concession Framework or Public Sector Administered
Framework
Concession Framework or Public Sector Administered
Framework
Proposed Procurement of an Urban Transit System
and Maintenance Works of an Urban Transit System
There is a continual need to employ a Kaizening* process that confronts and combats the challenges of common
constraints, in order to create adaptive and balanced maintenance programs, that are justifiably well planned and
timely executed. (http://www.apta.com/mc/rail/papers/Papers/WeissM-Challenges-of-Matching-Maintenance-Programs-
to-an-Aging-Rolling-Stock-Fleet.pdf)
Possible Courses of Action
Procurement of Equipment and Maintenance for a Metro Manila System with a
45 km trackworks and with a ridership of 1.25million a day:
Centralized procurement with a single point of responsibility contractual
entity of rail equipment to achievement procurement leverage
Decentralized procurement with a single point of responsibility for regular
maintenance works, refurbishment works and warranties such as availability
requirements and COMET reliability benchmarks.
Contractual Risks
Public sectors creeping expropriation of existing concessions agreements
remains strong in the South East Asian infrastructure sector.
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Thank you for your time and patience
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