Final deal hinges on 2015 Budget passage
The Department of Transportation and Communications (DOTC) on Thursday said Metro Rail Transit Line 3 (MRT-3) Equity Value BuyOut (EVBO) may be expected to take place in the first week of January 2015.
“The controlling factor would be budget . . . a compromise agreement could be done within the year,” DOTC Secretary Joseph Emilio Abaya told reporters on the sidelines of the Philippine Coast Guard Anniversary celebration.
The process of completing the EVBO would have to be agreed on by the Office of the Solicitor General, Landbank, Development Bank of the Philippines, and the DOTC.
“As long as there is no change in policy, there is an EO [Executive Order] to execute the EVBO,” Abaya pointed out.
The government’s long-term plan for the MRT-3 is to implement the equity value buy-out of the system’s private-sector owner Metro Rail Transit Corp. (MRTC) as provided for in the Build-Lease-Transfer (BLT) Concession Agreement.
Under Executive Order No. 167 s. 2013, the DOTC and the Department of Finance (DOF) are tasked to implement the EVBO to put an end to an ongoing arbitration case in Singapore between the DOTC and the MRTC.
The EVBO 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 by the government.
“What is critical is the 2015 budget, because the P54 billion [the amounted needed for the EVBO]is in 2015’s budget. If the budget is passed it is in there so we could expect it to roll in the first week of January,” Abaya said.
“The BLT provides for a formula on how to execute the EVBO so there is no room for negotiations,” Abaya said.
“We are buying everything out. The bonds, the remaining equity interest in private hands.
The objective at the end of the day [is]100 percent government [control]. If there is residual private interest there, you are sure a TRO [temporary restraining order]will come up again once we decide to expand,” Abaya added.
In September, the DOTC began fast-tracking upgrades to the MRT-3, and is pursuing the system’s buyout as a separate issue.
The transport agency said earlier that modernizing and upgrading MRT-3 are critical to improve the services to passengers in terms of both safety and convenience.
Last month the DOTC formed a transition team composed of engineers and staff of the MRT-3 Office and the Light Rail Transit Authority (LRTA) to closely monitor and assist maintenance work on the MRT-3 system.
The move is intended to give government a direct role in ensuring that safety requirements are met and protocols are properly followed on a daily basis in the interest of the riding public.
Major upgrades that are already underway are the addition of 48 brand new train cars and the automation of the railway ticketing system.
The new train cars will increase passenger capacity by 66 percent. This means that the current three-car configuration will be made into four-car sets, and that trains will arrive at 2.5-minute intervals instead of the current three minutes.
The prototype unit of the new train cars will be tested on the system by August 2015, and once approved, three to four new units will be delivered every month thereafter. While complete delivery of the 48 train cars will be only accomplished in December 2016, each monthly delivery will already afford partial relief to riders, the DOTC said.