A plan of the Department of Transportation and Communications (DOTC) to buy out the Metro Rail Transit Corp. (MRTC) is unlikely to happen as Sen. Sergio Osmeña 3rd expressed objection to a P53-billion item in the 2015 proposed budget intended for the purchase.
Osmeña, during a Senate finance committee hearing on the budget of the Department of Budget and Management (DBM), on Tuesday expressed doubt that the government could even carry out its plan to buy out MRTC since the company has no intention to sell in the first place.
Of the proposed P53 billion, he said, P40 billion would be used to refund the Development Bank of the Philippines and Landbank of the Philippines, P10 billion to purchase the common stock of the MTRC in order for the government to have the majority control and P3 billion to defray miscellaneous expenses.
“This doesn’t get you anywhere. You don’t take control of the common stock of MRTC. It’s going to be a long fight before you get control of the MRTC. They would be dreaming if they think they can but the equity for P10 billion,” Osmeña pointed out.
He wondered how the government can make the purchase when the MRTC is not selling.
DOTC Secretary Emilio Abaya last week told reporters that they are eyeing the equity buyout of MRTC to be completed either late this year or early next year.
Abaya said the buy-out is expected to pave the way for long-term plans for the train line.
The DOTC is seeking the P53-billion appropriation in the 2015 budget for the Equity Value Buy-Out (EVBO) but Congress is yet to approve it.
MRTC entered into a build-lease-transfer contract with the DOTC to build the Metro Rail Transit 3 (MRT 3) project in 1997 with a put-up equity of US$190 million. The government has since been paying for the project.
Over the years, the MRTC has retained control of operations and development of the MRT 3 and has been collecting and receiving income from development rights payment (DPR) from commercial rights and development of the 16-hectare depot site, including all concessions to develop air and ground spaces.
In 2010, state banks like the DBP and the Land Bank acquired a controlling interest in MRT 3.
Abaya said they are hoping to get the opinion of the Office of the Solicitor General on the matter and get a compromise agreement signed by the MRTC before the end of September.
But Osmeña said instead of insisting to buy MRTC, the government should realign the fund to other infrastructure projects to spur economic growth.