‘Descoping’ of NSCR project pulls down DMCI's order book

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Metro Manila (CNN Philippines, May 29) — While Consunji-led DMCI Holdings saw “signs of recovery” for its construction business, its order book still dropped to ₱42.4 billion in the first quarter, blamed on the deletion of one part from its original multibillion-peso North-South Commuter Railway (NSCR) contract.

The figure was 9% down from a year ago’s ₱46.7 billion, but 20% higher than the ₱35.2 billion in the last quarter of 2022.

In a statement Monday, contractor D.M. Consunji, Inc. (DMCI) attributed the decline to the completion of several projects as well as the “descoping” of the NSCR Contract Package 01, its joint venture with Japan’s Taisei Corporation.

This exclusion of work from the order book was valued at ₱7 billion, the DMCI noted.

Discussions on compensation are now ongoing, DMCI President and CEO Jorge Consunji said.

“We’re expecting 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,” he said.

Sought for more details, Transportation Assistant Secretary for Railways Jorjette Aquino said in a mobile message that the move was a “joint decision” by the Department of Transportation (DOTr) and DMCI-Taisei due to right-of-way issues in section one of the NSCR Contract Package 01, which spans from Solis Stations to West Valenzuela Station.

She clarified that only section one of the contract package was omitted. The package is divided into three sections, with the last two covering the stretch from West Valenzuela Station to Bocaue Station.

“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,” the transportation official added.

The involved section would be up for rebidding “once the discussions to formalize such omission or descoping with [DMCI-Taisei] are finalized,” Aquino said.

The NSCR is a massive 147-kilometer railway network designed to connect Metro Manila to the regional centers of Pampanga and Laguna.

Meanwhile, DMCI said the bulk of its order book in the first three months of 2023 was lifted by the ₱28-billion South Commuter Railway Project Contract Package 02, which involves the construction of railway tracks and stations along España, Sta. Mesa and Paco.

Other projects in the DMCI order book include Dinapigue Causeway expansion, Xavier Junior High School Building, YCO Manila site early works and dredging and hauling of lagoon in the La Mesa Water Treatment plant.

In the period, DMCI booked ₱263 million in profit, down 26%, following lower construction accomplishments and fewer projects.