Escudero not sold on P53-billion MRT3 buyout

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 Transportation Secretary Joseph Emilio Abaya (center) as he is consulted by DOTC Assistant Secretary Jaime Caringal (left) and Undersecretary Rene Limcaoco during the Senate hearing.  PHOTO BY EDWIN MULI

Transportation Secretary Joseph Emilio Abaya (center) as he is consulted by DOTC Assistant Secretary Jaime Caringal (left) and Undersecretary Rene Limcaoco during the Senate hearing. PHOTO BY EDWIN MULI

SEN. Francis “Chiz” Escudero is convinced that the government need not spend P53 billion to solve the issues hounding the Metro Rail Transit 3 (MRT3), noting that sincere talks between the Department of Transportation and Communications (DOTC) and the Metro Rail Transit Corp. (MRTC) would greatly help address the railway’s problems.

Escudero made the observation during the hearing of the Senate committee on public services. He suggested that the DOTC and the MRTC sit down and thresh out issues surrounding the poor operations and maintenance of MRT 3.

He said the reason behind the dismal situation of the mass transport system is because the owners and operators of the train can’t get their acts together.

The DOTC is seeking a P53-billion appropriation in the 2015 budget for the Equity Value Buy-Out (EVBO) of the MRTC, to pave the way for the long-term plans on the train line and improve its performance.


“I am not convinced that we need to shell out almost P54 billion of public funds just to take over MRT 3. A meeting between the DOTC and MRTC could be the answer, analyze and agree on terms and conditions to improve the state of affairs of our mass transport system,” Escudero noted.

DOTC Secretary Emilio Abaya said they expect the buy-out of the MRTC either by the end of 2014 or early 2015.

Of the proposed P53 billion, P40 billion will be used to refund the Development Bank of the Philippines (DBP) and Land Bank of the Philippines while P10 billion will be use to purchase the common stock of the MTRC that will allow government to have majority control. The P3 billion is for miscellaneous expenses.

But Roberto Sobrepeòa, chairman of the Fil-Estate which is the major equity holder in the MRTC, told senators the DOTC had not made a formal offer to buy them out and that the P53 billion was just an approximation and was not even enough to buy MRTC shares.

Meanwhile, the DOTC secretary defended the decision of the government to replace Sumitomo, the original maintenance provider of the MRT3.

According to Abaya, Sumitomo demanded that its monthly fee be increased from $1.4 million to $2.1 million but did not offer warranty.

Vic Espiritu, the representative of the Global/APT, the current maintenance provider, insisted that it is the DOTC and not them that should be blamed for the poor performance of the MRT3.

According to Espiritu, the trains undergo rigid checks before and during hand over to the DOTC-MRT3 operations.

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1 Comment

  1. Eliseo Jr. P.Tenza on

    The government should use the Php 53 B, to start planning for a new and improved MRT system.
    Dont buy an old defective system.
    Ask the present maintenace company to submit their maintenance program, scrutinize the program, propose amendment if necessary, and monitor it continuosly.