SEVEN months is enough for the government to complete the corporate buyout of the Metro Rail Transit (MRT) Line 3, according to a Cabinet official who remains optimistic despite the roadblocks he had to hurdle in pursuing the transaction.
Transportation Secretary Joseph Emilio A. Abaya said he is hopeful that the government’s P54-billion takeover of the train line will be completed before President Aquino steps down from office in June 2016.
His optimism remains high despite the mere seven months left on his tenure as the transportation head.
“We have to sit down again to discuss the transaction. I hope we could still do it. We still have seven months in office. It’s still a long period,” he said in an interview.
The main issue that his office, the Department of Finance, Land Bank of the Philippines (LandBank), and the Development Bank of the Philippines (DBP) have to discuss is the losses from the equity value buyout.
He explained that the government financial institutions (GFIs) will probably incur losses due to the buyout, an event that the two banks are not too keen to see.
“I think we are working on getting the opinion of the Office of the Secretary General. We’re now working on the comfort of the GFIs, because I think DBP and LandBank’s main concern is taking a loss in the buyout,” Abaya said.
The budget for the buyout, the main hurdle that prevented the state from executing the transaction in the past, is now included in the 2016 appropriations, under the “unprogrammed funds” section.
Lawmakers decided to scrap the programmed budget for the buyout last year as they deemed it unnecessary to pass money from one government office to another.
The state is pursuing the takeover of the line, as ordered by President Aquino through an executive order in 2013, to improve the sorry state of the train system that ferries more than half-a-million passengers daily.
Should the buyout be completed in 2016, the transportation agency may then bid out the operations and maintenance contract of the line, thereby tapping private-sector efficiency and customer-service orientation for operational needs while retaining regulatory functions for passenger protection.
Abaya noted that once the government completes the transaction, all the money that is being pumped into the facility will now be sound investments. Right now, private-sector owner Metro Rail Transit Corp. (MRTC) enjoys receiving funds for the improvement of the train line.
“We could make better decisions when we become the owner. It frees us from talking to other parties, with the fear of opinions coming from the left field,” he said.
MRTC Director Rafael R. Perez de Tagle Jr., however, believes that a buyout is not necessary to improve the train line. After all, the build-lease-transfer agreement between the government and private sector requires the two parties to cooperate with each other to improve the train line.
All that is needed, he said, is for the government to be open to proposals sent by the private partner —even those that merely want to help in modernizing the train line.
Proposals to develop the line, the official said, were already in place — even before President Aquino took office in 2010.
“Even if the Arroyo administration ignored the previous private-sector proposals to expand and upgrade the capacity of the MRT, this current administration would have had doubled the capacity of the MRT by last year, if only it followed the build-lease-transfer agreement and agreed to work with the private owners to expand the MRT 3’s capacity at no cost to the government,” he said.
Metro Global Holdings Corp., a stakeholder in MRTC, had proposed to shoulder the multibillion-peso upgrade of the train line.
Together with foreign firms Sumitomo Corp. of Japan and Globalvia Infrastructuras of Spain, Metro Global Holdings offered to “fix” the ailing system through a $150-million investment that involves the procurement of a total of 96 new train cars, and the rehabilitation of the existing 73 coaches, increasing its capacity by fourfold to 1.2 million daily passengers.
Under the proposal, a single point of responsibility will be implemented: meaning the rehabilitation and the maintenance of the line will be handled by a single company.
Separately, Metro Pacific Investments Corp. is proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental payments.
The group of businessman Manuel V. Pangilinan, which earlier entered into a partnership agreement with the corporate owner of the MRT, intends to spend $524 million to overhaul the line.
The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.
It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal.
On the other hand, German firms Schunk Bahn-und Industrietechnik GmbH and HEAG Mobilo GmbH are seeking to place the whole train system under a massive transformation program to augment its capacity and to provide a safe and comfortable travel to commuters from the northern and southern corridors of Metro Manila.
The P4.64-billion proposal, submitted in February with Filipino partner Comm Builders and Technology Phils. Corp., calls for the complete overhaul of the 73 light-rail vehicles of the MRT, the replacement of the rails, the upgrading of the line’s ancillary system, the upgrade of the track circuit and signaling systems, the modernization of the conveyance system, and a three-year maintenance contract.
Currently, the government implements a P9.7-billion multiyear venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino.
These proposals, however, were left to gather dust in Abaya’s office.
The train system has been operating at overcapacity since 2004. Currently, the line serves nearly 550,000 passengers per day. It even reached, at one point last year, the 650,000-daily passenger mark. It has a rated capacity of 350,000 passengers every day.
2 comments
asa ka pa pAbaya!!
publication lang yan wala sa katotohanan. Kasi wala nang pondo para diyan ilang buwan na lang ang election na…..di na magawa yan….Dapat magpaalam na sila….