By Lorenz S. Marasigan | Business Mirror | October 21, 2015
DESPITE the little time that it has to launch—much less complete—the multibillion-peso buyout of the Metro Rail Transit 3 (MRT 3), the Department of Transportation and Communications (DOTC) is still hopeful that the transaction would be executed in three months or less.
Transportation Secretary Joseph Emilio A. Abaya declared this administration’s persistence in pursuing the takeover of the railway line, adding that funding is no longer an issue.
“We are keen on pursuing buyout of MRT 3 from its private-sector owner. Budget is no longer an issue. The actual execution of buyout is likely in early 2016,” he said.
His statements came amid Senate deliberations on the 2016 budget. The House of Representatives earlier approved the P49.3-billion budget of the DOTC.
“Unprogrammed appropriations” are not included in this allocation, but is part of the overall P3.002-trillion national budget for 2016.
In 2014 lawmakers decided to scrap the appropriation for the buyout from this year’s budget, arguing that the takeover will not lead to anything but a waste of money.
The transport chief’s statement also came despite the ongoing arbitration case in Singapore pertaining to the late equity rental payments of the government to the MRT 3 private owner.
The train line was conceived through a build-lease-transfer agreement signed a decade and a half ago. Under the agreement, the government is compelled to pay MRT Corp., the concessionaire of the railway system for 25 years, billions of pesos in equity rent.
To erase the arbitration case, the government needs to do a number of initiatives. First on the list is the need for the state to strike up a compromise agreement with the private partner to signify both parties’ willingness to execute the deal.
But it seems the government is at the losing end, as the private company, which is controlled by businessman Robert John L. Sobrepeña, is not in favor of the deal.
Should the buyout be completed in 2016, the transportation agency may then bid out the operations and maintenance contract of the line, thereby tapping private sector efficiency and customer service orientation for operational needs, while retaining regulatory functions for passenger protection with the government.
The 15-year-old mass transit system, which ferries more than half-a-million passengers daily, is in a state of disarray.
Passengers frequently complain of long queues caused by the lack running stocks. The public was also outraged by the MRT’s humid train cars, faulty elevators and escalators, among others.
These problems, according to Sobrepeña, will never be solved by the buyout. Instead, it only worsens the condition of the train system, as it delays the much-needed upgrades that were supposed to be rolled out about a decade ago.
His group is proposing to do a “quick fix” solution to make the train system safe for public transport.
Together with foreign firms Sumitomo Corp. of Japan and Globalvia Infrastructuras of Spain, Metro Global Holdings Inc. is proposing to “fix” the ailing system through a $150-million investment that involves the procurement of a total of 96 new train cars, and the rehabilitation of the existing 73 coaches, increasing existing capacity to 1.2 million passengers every day.
Under the proposal, a single point of responsibility will be implemented: meaning the rehabilitation and the maintenance of the line will be handled by a single company.
Separately, Metro Pacific Investments Corp. (MPIC) is proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity rental obligations. The group of businessman Manuel V. Pangilinan, which earlier entered into a partnership agreement with the corporate owner of the MRT, intends to spend $524 million to overhaul the line.
The venture would effectively expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. The multimillion-dollar expansion plan would double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.
It was submitted in 2011, but the transportation agency’s chief back then rejected the proposal.
On the other hand, German firms Schunk Bahn-und Industrietechnik GmbH and HEAG Mobilo GmbH are seeking to place the whole train system under a massive transformation program to augment its capacity and to provide a safe and comfortable travel to commuters from the northern and southern corridors of Metro Manila.
The P4.64-billion proposal, submitted in February with Filipino partner Comm Builders and Technology Phils. Corp., calls for the complete overhaul of the 73 light rail vehicles of the MRT; the replacement of the rails; the upgrading of the line’s ancillary system; the upgrade of the track circuit and signaling systems; the modernization of the conveyance system; and a three-year maintenance contract.
Currently, the government implements a P9.7-billion multiyear venture to overhaul the line. The complete makeover is expected to be done within the term of President Aquino.
The train system has been operating at overcapacity since 2004. Currently, the line serves nearly 550,000 passengers per day. It even reached, at one point last year, the 650,000-daily passenger mark. It has a rated capacity of 350,000 daily passengers.