Railway building start hits DMCI profit
Top contractor D.M. Consunji Inc. reported a nine percent annual decline in its first-quarter order book after the P7 billion worth of North-South Commuter Railway contract package was removed from its pipeline.
In a Philippine Stock Exchange report on Monday, the company said the January to March order book dropped to P42.4 billion from P46.7 billion a year ago.
DMCI attributed the decline to the completion of several projects and descoping of NSCR Contract Package 01 or NSCR CP01, a joint venture with Taisei Corporation of Japan.
Nonetheless, DMCI president and CEO Jorge Consunji said the company expects to receive an “equitable compensation for the descoping, which is a standard contract condition in construction projects.”
“Negotiations are underway, and a resolution should be reached in the next few months,” Consunji added.
Transportation Assistant Secretary Railways Jorjette Aquino, however, clarified that the descoping, which only covered Section 1 of the NSCR CP01, was a joint decision between the government and the project proponents.
Obstructions cause delays
“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,” Aquino said in a text message.
Aquino also added that the DoTr will rebid the forfeited Section 1 but it first needs to formalize the omission or descoping of the contract with DMCI and Taisei.
Section 1 of the SCR CP01 is a 7.2-kilometer alignment spanning from Solis Stations to West Valenzuela Station of the rail project. The entire contract has a total length of 21 km covering Solis Station to Bocaue Station.
Notably, if the DMCI is to compare its first-quarter figures to the previous one, the order book rose by 20 percent, P35.2 billion to P42.4 billion due to the awarding of the South Commuter Railway Project, a joint venture with Acciona Construction Philippines.
The P28-billion project involves the construction of railway tracks and stations along España, Sta. Mesa and Paco, and will take roughly four and a half years to complete.