THE problematic Metro Rail Transit (MRT) Line 3 will have lesser problems come the second quarter this year after the Department of Transportation and Communications (DOTC) awarded on Thursday the P61.5-million contract for the supply of steel rails for the mass-transit system.
Transportation Spokesman Michael Arthur C. Sagcal said the deal was bagged by the group led by Jorgman Planning & Development Corp., South Korean firm Daewoo Group and Germany’s MBTech Group.
“After the contract is finalized, the notice to proceed will be issued by next week at the latest,” he said in a text message.
The group will then have 90 days to deliver 7,296 meters of rails and fastening materials for the train line that serves more than half-a-million passengers per day.
The project will address the train system’s rail-supply deficit that was earlier seen to potentially halt the operations of the MRT.
Experts from Hong Kong’s MTR Corp. Ltd. earlier said the overhead mass-transit system had major flaws in rails, emphasizing on the need to replace “unsafe tracks” that were backed by a fourfold increase in broken rails over a period of three years.
The audit team concluded that most of the existing problems in the asset system of the 15-year line stemmed from insufficient attention in the management of the asset, handover, maintenance performance, and the overall planning and development of the railway line.
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, signalling 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 Hong Kong-based First Pacific Co. Ltd. is proposing to shoulder the upgrade cost 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 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 in 2013, and was awarded to the consortium between Metro Pacific and Ayala Corp. in 2014.
The total $524 million also included the $30-million working capital and a $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, MRT Corp., which is wholly owned by MRT Holdings II Inc. of businessman Robert John L. Sobrepeña.
The government aims to completely take over 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 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.