The local flagship of the Hong Kong-based First Pacific Co. Ltd. will resubmit its multimillion-dollar proposal to upgrade the ailing Metro Rail Transit (MRT) Line 3.
Executives of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) were told by the House Committee on Metro Manila Development to submit anew their company’s updates proposal to expand and modernize the “already obsolete” mass-transportation system.
Metro Pacific 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.
“We have to review it and we will resubmit it to the DOTC shortly,” he said in a brief interview.
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 (AFCS) 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 between Metro Pacific and Ayala Corp. earlier this year.
“The reduced amount is about $40 million. Our original proposal had the AFCS and the half gate which has been removed,” he said.
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 daily.
It was submitted in 2011 but the transportation agency’s chief back then rejected the proposal.
Meanwhile, the state’s P54-billion planned takeover of the line has become more uncertain, Lotilla said, with the Senate’s recent rejection of the budget of the takeover.
“The government would have needed $1.13 billion to implement the buyout and expand the line. With our proposal, they will save $500 million, or 47 percent less than the original estimate,” Echauz said.
The government intends to buyout the corporate owner of the line, the MRT Corp., 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 rentals 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.
Lorenz S. Marasigan
3 comments
There were some sectors of the MRT3 dealings which should be analyzed and give proper disbursement when it comes to the term, “savings.” The Senate studied the 2015 budget and the DOTC wants the 54 billion pesos budget for completing the MRT3 buyout. The Senate through Chiz Escudero was making a wave by questioning the MRT3 complete buyout of the DOTC. More sectors are claiming the buyout as a ploy of the government for other ulterior motives? But, as what the DOTC’s planning to the MRT3 development, the 2015 budget could help, according to Secretary Jun Abaya.
Why the Senate is totally complacent with Bob Sobrepena theories and calculations; that the 54 billion pesos for the buyout is to assign to the two banks, the government would need $1.172 billion (equivalent to P53.9 billion) to pay off MRT-3 investors. The two biggest MRT-3 investors are Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP), which have majority representation in the MRTC board, including the board chairman.
I doubt that DOTC will accept it. For some reason, Jun Abaya keeps on declining proposals from the private sector and that makes us wonder why.
I am wondering why Jun Abaya isn’t keen on acceptiing the offers from the Private Sector. Your question is as good as mine.