Funding for the Metro Rail Transit (MRT) Line 7 project could be delayed by the ongoing tussle on where the common station will be situated, as conglo-merate San Miguel Corp. (SMC)said it cannot talk to funding agencies until the issue is resolved.
Raoul Eduardo C. Romulo, San Miguel Holdings Corp. CFO, said they cannot conclude discussions for a possible official development assistance (ODA) package for the multibillion-dollar project, as lenders will ask many things that the company could not answer.
“We are still going to put the financial group together. It doesn’t make sense for us to put that up right now. There are so many questions the lenders will ask that we cannot answer, like where will it end? Will the ridership be divided? Will MRT 7, 3 and 1 be together, or will they be separate? There are rumors that they will be separated. We cannot confirm rumors, because
we are not party to that,” Romulo said on Friday at the sidelines of the company’s bond listing on the Philippine Dealing & Exchange Corp.
“We’re exploring a lot of possibilities but we cannot also commit with the institutions because there is nothing to commit in terms of many details. There are many moving parts. There will be an impact on costing, the details of which I have no details. But it will have an impact,” he said.
The project was estimated to cost at least $1.6 billion based on 2008 prices and SMC will have to make the necessary adjustments, Romulo said. The ODA’s performance undertaking will expire by February next year, 18 months after being issued by the government in August last year.
The much-delayed MRT 7 project is a 22-kilometer elevated railway that will start in North Avenue in Quezon City, traverse the entire stretch of Commonwealth Avenue and some parts of Caloocan that will end in San Jose del Monte in Bulacan. When it was approved in 2007, it was estimated to serve about 2 million riders who live north of Metro Manila where transportation to the financial centers is most difficult.
SMC came into the picture in 2010 when it acquired a 51-percent interest in Universal LRT Corp. Ltd., a company in charge of developing the line. “Hopefully we will clean up and get the MRT 7 project rolling this year pending the resolution of the problem in the common station. One of
the major problems is whether the common station will remain a common station. We don’t know. And there is a legal challenge from SM,” Romulo said.
Passengers from Light Rail Transit Line 1 and from MRT 3 were earlier proposed to meet at a common station that until now has not been satisfactorily settled. Originally, this station were to be built in the SM North Edsa Station, with the SM group paying some P200 million for the naming rights.
For some reason, the Department of Transportation and Communications (DOTC) moved the planned common station to the nearby TriNoma Mall, operated by rival Ayala Land Inc.
SMC President and COO Ramon S. Ang has since said the company may create two separate stations to appease the contending parties. But this was criticized by officials of Metro Pacific Investment Corp. (MPIC) calling it as an “inefficient exercise.” MPIC owns controlling interest in the MRT 3 operator.
The SM group challenged the DOTC decision and sought redress of its grievance before the Supreme Court.
“Our concession agreement mandates and requires us to be there [SM North Edsa]. That was the original agreement. If we move out of that, that is a violation of the agreement. We have to adhere to that,” Romulo said. SMC also owns the South Luzon Tollway Corp. in the process of completing a new 57.6-km four-leaf toll-road extension of its South Luzon Expressway concession connecting Santo Tomas, Batangas, and Lucena, Quezon. It also owns the Tarlac-Pangasinan-La Union Expressway.