The audit team of Hong Kong’s MTR Corp. Ltd. concluded in a 39-page summarized audit report that most of the existing problems in the asset system of the 15-year-old Metro Rail Transit (MRT) Line 3 stemmed from insufficient attention in the management of the asset, handover, maintenance performance, and the overall planning and development of the railway line.
“There is a lack of awareness to asset management in MRT 3 overall. The requirements for maintenance works in the maintenance agreement are mostly time and task based. They are not adaptive on changes in business demand and customer-service requirements,” the experts said.
MRT Corp. (MRTC), the owner of the assets of the train line that connects Quezon City to Pasay, commissioned MTR Hong Kong in August to conduct an assessment survey to review the condition of the facility and determine whether or not it is in safe operable condition. There are five levels of grading used by MTR Hong Kong, namely, good, satisfactory, fair, unsatisfactory and poor. None of the train system’s components received a good rating.
The government is currently rolling out a P9.7-billion venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino.
It includes the procurement of additional train coaches, train general overhauling, ancillary-systems upgrade, platform-edge doorstep, signaling-system upgrade, rail-steel replacement, communications-system upgrade, traction-motors replacement and the improvement of the overhead catenary system.
The rehab venture also includes security fence and noise barrier, consulting services, upgrade of conveyance facilities, a footbridge for the North Avenue Station, weather-protection cladding, Internet connection, passenger information system and passenger hand straps.
Separately, the local flagship of the Hong Kong-based First Pacific Co. Ltd. is proposing to shoulder the upgrade costs of the train system and free the government from paying billions of pesos in equity rental payments. Metro Pacific Investments Corp. President Jose Ma. K. Lim said his group will soon submit its $524-million proposal to the Department of Transportation and Communications (DOTC), which has already rejected the then-$565-million offer.
The lower budget for the offer, Metro Pacific Business Development Officer John B. Echauz explained, stemmed from the removal of the automated fare-collection system and another component from the proposal. The unified ticketing-system project was auctioned off by the transportation agency last year, and was awarded to the consortium of Metro Pacific and Ayala Corp. earlier this year.
The total $524 million also included the $30-million working capital and the $229-million budget for the settlement of the government’s equity rental payment.
The group of businessman Manuel V. Pangilinan earlier entered into a partnership agreement with the corporate owner of the MRT, a move that would have allowed the firm to invest roughly $600 million to improve the services of the train system.
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.
The government, on the other hand, intends to buy out the corporate owner of the line, the MRTC, which is wholly owned by MRT Holdings II Inc. of businessman Robert John L. Sobrepeña.
The government aims to completely takeover the line by the time President Aquino steps down from office in 2016. But recent delays, including the “tying up of loose ends,” are forcing the government to double its efforts to effect the buyout.
One of the requirements to execute the takeover is for the government to strike up a compromise deal with the private owner of the train line. This would effectively end the ongoing arbitration case in Singapore that was lodged against the government in 2008 due to its failure, as the operator of the line, to pay billions of equity rental payment to the owner of the rail system.
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 with the government.
Since 2004, the train system has been operating at overcapacity. Currently, the line serves nearly 550,000 passengers per day. It even reached, at one point this year, the 650,000-daily passenger mark. It has a rated capacity of 350,000 daily passengers.
In the recently conducted third public hearing on the MRT, Sen. Grace Poe laments the ordinary citizen’s sufferings and the lost productivity, all because of the inefficient people behind the rail system.
“Anong oras na nakakauwi ang ating mga kababayan? Tayo kasama doon. Anong oras na naman tayo gigising kinabukasan? Ilang oras ang nawawala sa traffic o sa mga pila at aberya sa MRT? Mga oras na sana ay nagagamit nating lahat sa mas produktibong mga bagay.”
Then Poe asked the questions which answers had long eluded the public: “Bakit tayo ang makikisama sa trapiko? Bakit tayo ang magtitiis sa aberya sa MRT?” she asked in a room that suddenly became deathly quiet.
“I plead to the DOTC, MRT and the private investors and owners of the MRT, please make up and help our citizenry.”
She said in previous hearings, they discussed the maintenance issues, the incompetence of the MRT 3’s maintenance provider and the DOTC’s proposal then of the Equity Value Buyout (“EVBO”).
Poe said it would cost the government around P54 billion, but there is apparent lack of proper and efficient communication and interaction among MRTC and the private owners, investors and the DOTC.
Poe recalled how the MRT-3 was constructed and how the government leased the facilities and pay rent to the investors.
“The government, specifically the DOTC, would operate the system and have control of the fare box. The BLT (build-lease-transfer) contract will expire in 2025 and the ownership of the system will then be transferred to the government.”
(With Recto Mercene)