Metro Pacific Investments Corp. (MPIC) has submitted a formal proposal to expand the operations of the Metro Rail Transit Line 3 (MRT3) amid plans for a government takeover of the troubled commuter rail line, the Department of Transportation and Communications (DOTC) said.
DOTC Secretary Joseph Emilio Abaya said his department received MPIC’s formal proposal last week, but no decision on it has been made as “it is still being digested.”
MPIC had earlier asked the government to reconsider the company’s proposal to expand the line.
Abaya explained that it was somewhat unclear where the proposal originated, disclosing that “Before, Sobrepeña [MRT Holdings chairman Robert Sobrepeña] submitted a two-page letter but he signed it (then) as Metro Global Holdings Inc. (MGHI), which is now a new entity.”
“Basically, I don’t even know the nature [of the MPIC proposal]– is it separate, is it with the Sobrepeña group, is it one and the same?” Abaya told reporters.
Asked if the DOTC is open to reconsidering the MPIC proposal, Abaya replied: “We are still studying it — for me, honestly, I think we are much better off with an open, transparent, and competitive bid.”
MPIC, which is led by businessman Manny Pangilinan, took a controlling stake of 48 percent in the MRTC after signing cooperation agreements with the various groups that held rights and interests in MRT 3.
The move complicates the government’s plan to gain control of the operations of MRT3 from MRTC.
President Benigno S. Aquino 3rd earlier ordered the takeover in order to save on huge government subsidies currently being paid to the ailing railway line.
MRTC also has a pending arbitration case before the International Chamber of Commerce in Singapore against the Philippine government accusing the latter of late payment of equity rentals.
According to Abaya, the planned MRT3 buyout by the government requires the blessing of the arbitration court.
The takeover would involve an equity value buyout of all outstanding shares of stock and other securities issued by the MRTC and other entities owning the MRT3 pursuant to the terms of the MRT build-lease-transfer (BLT) agreement.
“So we will see, the critical part quickly explained to me by legal is that we could amend the BLT as long as the amendment is not substantial, and neither would it disadvantage government,” Abaya said.