The Department of Transportation and Communications (DOTC) said the government has started the buyout of Metro Rail Transit Line 3 project (MRT-3) even if a decision by an arbitration court in Singapore is still being awaited on the case filed by the railway operator, Metro Rail Transit Corp. (MRTC), against the government.
“Currently we are already in an equity value buyout proceeding,” DOTC Secretary Joseph Emilio Abaya told reporters on Friday.
“We got a resolution from the Land Bank of the Philippines [approving the buyout]and we are awaiting a board resolution from DBP [Development Bank of the Philippines] approving it. Second is, we are awaiting a comment from the OSG [Office of the Solicitor General] again as to the buyout,” Abaya said.
“After which, pipirma kami ng [we will sign a]compromise agreement between the DOTC and MRTC to buy out their shares. Then we submit that to the arbitration panel, then that’s it.”
According to Abaya, the MRT-3 buyout requires the blessing of the arbitration court.
In 2009, the MRTC filed an arbitration case in Singapore against the Philippines over its late payment of equity rentals. It filed another case over the DOTC’s decision to award to Chinese firm the contract to supply 48 new light rail vehicles for MRT-3.
When asked if a compromise with MRTC is to buy out their shares in MRT-3, Abaya replied: “Yes, that should be approved by the arbitration committee.”
He added: “Well, majority of the board is government, LandBank and DBP so pwede yon [that is possible].”
LandBank and DBP hold a combined 80 percent economic interest in MRT-3.
Metro Pacific Investments Corp. (MPIC), led by businessman Manny Pangilinan, has a controlling stake of 48 percent in MRTC after signing cooperation agreements with various groups that hold rights and interests in MRT-3.
The DOTC earlier said that the takeover of MRT-3 by the government is possible this year. Abaya said the Department of Budget and Management has already included the buyout price of P56 billion in the 2014 budget.
In March 2013, President Benigno Aquino 3rd ordered the takeover of MRT-3 to save on huge government subsidies.
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 a build-lease-transfer agreement.
Meanwhile, the DOTC said relief for about 500,000 commuters of the MRT is in sight.
DOTC said earlier that it is speeding up the expansion
program for MRT with the acquisition of an additional 48 light rail vehicles (LRVs) to the MRT 3 after the Makati Regional Trial Court junked the injunction case filed by the MRT Holdings II Inc. on February 21 this year.
“The DOTC successfully fought for public interest and defended its position in court. But the true winners are the riders of MRT-3. The supplier can now start manufacturing the 48 brand new LRVs, which will be delivered in tranches starting in the second half of 2015,” Abaya said earlier.
Upon the dismissal of the case, the DOTC issued the Notice to Proceed to Dalian Locomotive and Rolling Stock Co. of China, which won the public bidding conducted last year.
“Our commuters deserve better services at MRT-3 and the addition of more LRVs is long overdue. We are doing all we can to get them here as soon as possible. Dalian has expressed the same commitment to the riding public,” Abaya said.
Abaya said the DOTC and the Department of Finance should speed up the buyout of MRTC to free government from having to deal with the likes of those behind the case.