By Lawrence Agcaoili | The Philippine Star | January 23, 2014
MANILA, Philippines - The Department of Transportation and Communications (DOTC) said the P56-billion budget for the government takeover of the Metro Rail Transit line 3 (MRT3) along EDSA is already available.
Transportation Secretary Joseph Emilio Abaya said in an interview with reporters on the sidelines of the launching of the P27-billion Metro Manila Skyway Stage 3 project that the Department of Budget and Management (DBM) has already included the amount in the P2.265-trillion national budget for 2014.
“The P56 billion is okay. It is in the 2014 national budget,” Abaya stressed.
He pointed out that the Department of Finance (DOF), through National Treasurer Rosalia de Leon, would finalize the timing of the proposed government takeover of MRT3.
“There are still small things left. Clearly from DOTC, we are much better off executing the buyout, otherwise legally there is something always lingering in your mind,” he added.
According to Abaya, one issue being discussed is whether the government needs the consent from the equity holders of Metro Rail Transit Corp. (MRTC) led by infrastructure conglomerate Metro Pacific Investments Corp. (MPIC)
“One issue is whether we need their consent. But apparently they are doing an arbitration even during the time of our predecessors,” Abaya clarified.
MRT3’s private concessionaire MRTC, then owned by the Sobrepeña family, decided in 2003 to cash in on its investment in the train line by issuing asset-backed bonds for future equity rental payments.
On the other hand, government financial institutions Land Bank of the Philippines and the Development Bank of the Philippines hold a combined 80 percent economic interest in MRT3 by acquiring the MRT bonds issued by MRT III Funding Corp. issued by owner – the Sobrepeña’s Fil-Estate Group in 2008.
However, the GFI’s presence in the board is not felt because it does not have voting rights for the shares, while MPIC owns 48 percent equivalent to a 20-percent economic interest in MRTC.
In March last year, President Aquino signed Executive Order No. 126 stating that DOF and DOTC should buyout MRT 3 from MRTC pursuant to a build-lease-transfer (BLT) agreement.
The proposed takeover would help LandBank and DBP unload their interest in MRT3 after receiving several warnings from the Bangko Sentral ng Pilipinas (BSP) regarding their investments in the mass transport system.