• DOTC quibbles anew on MRT3

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    THE Department of Transportation and Communications (DOTC) is quibbling anew on what to do with Metro Rail Transit Line 3 (MRT). It earlier said it would buy out the current operator but it is hamstrung by the fact that Congress did not allocate a budget for the buy out.

    This time it said it is studying the proposal of Metro Rail Transit Holdings Inc. (MRTH) to extend operations over MRT3 for another 15 years.

    MRTH is the parent company of the Metro Rail Transit Corp. (MRTC), concessionaire of the MRT 3.

    “The proposal of MRTH extending it by an additional 15 years, we’re studying it, because we don’t want to say yes or no without thinking. There are certain concerns like fares,” DOTC Undersecretary Perpetou Lotilla told reporters.

    “Options for an equity value buy-out (EVBO) are under discussion. Congress doesn’t have an outlay for it. Well, I’m not yet at liberty to disclose,” he added.

    In December, the DOTC said that an EVBO for the MRT 3 was still possible.

    DOTC Secretary Joseph Emilio Abaya earlier said, “We have to see the final form of the budget and we’ll see what our options are.”

    He said the government has a Plan B but he refused to reveal what it was.

    “We just couldn’t share. It’s going to be more of a legal approach to things but I’ve been briefed that there are other options,” Abaya added.

    According to him, the DOTC and the Department of Finance (DOF) have to pursue the plan because President Benigno Aquino 3rd has signed an executive order mandating them to execute it.

    “I think we still have enough time. Of course the reality is some guys obviously don’t welcome this but clearly, how could I renege on a presidential directive just because Congress decided not to give us as much funds? Mas malinaw sa akin yung utos ng Pangulo [The President’s order is much clearer to me],” Abaya said.

    The DOTC has said that the MRT 3 buyout may take place in the first week of January 2015. But the process would have to be agreed upon by the Office of the Solicitor General, LandBank, Development Bank of the Philippines and the DOTC.

    “For me, I think it’s clear. Even with the DOF, I spoke to Secretary (Cesar) Purisima. Itutuloy natin ito (We will pursue this),” Abaya said.

    The government’s long-term plan for the MRT 3 is to implement the equity value buyout of the system’s private-sector owner MRTC as provided for in the Build-Lease-Transfer (BLT) Concession Agreement.

    Under Executive Order 167, the DOTC and DOF are designated to implement the buyout to put an end to an arbitration case in Singapore between the DOTC and MRTC.

    The buyout will terminate the Concession Agreement and transfer ownership of the MRT 3 to the government, saving billions of pesos in equity rental payments paid annually to MRTC. The government will need P54 billion to gain 100 percent control of the MRT 3.

    The DOTC started fast-tracking upgrades to the rail line in September, believing that modernizing and upgrading the MRT 3 would redound to the safety and convenience of passengers.

    The major upgrades that are underway include the addition of 48 new train cars and the automation of the railway ticketing system.

    The new train cars will increase passenger capacity by 66 percent.

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    1 Comment

    1. Calvin Reckenpop on

      The buyout is with the approval of OSG, LBP, DBP and the DOTC. Did they leave out anyone? What about the private owners, genius? Since this EVBO hatched in Abaya’s ‘mind’ he has not once consulted with MRTH. Maybe it’s because an EVBO is not available to government but only to the private owners in case the government defaults on its payments. Even his P54B figure remains unchanged even after everyone says it is not enough for a true buyout. Now he plays coy saying he has plans and strategies, but is not at liberty to disclose them. That’s because he hasn’t had time to think up some new fairy tale to tell us. Why else does he keep changing his story and why else can’t they keep their stories straight? Like a true Liberal Party drone, Abaya declares Aquino’s ignorant declaration must be carried out at all costs, and hang the realities.