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MVP firm to invest P20B in MRT3

Philippine Ratings Services Corp., a debt watcher, has upgraded the rating of the Metro Rail Transit Line 3’s debt.

Infrastructure giant Metro Pacific Investments Corp. said it would invest more in the troubled Metro Rail Transit Line 3 after recently bagging a coveted original proponent status.

Metro Pacific president Jose Lim told reporters Friday that it could invest around P20 billion on the MRT-3 when factoring in the “equity requirement.”

“The required investment amount is larger,” Lim told reporters at the sidelines of the unified railway station groundbreaking event in Quezon City on Friday.

Earlier, Metro Pacific said it would spend P12.5 billion to rehabilitate MRT-3, which runs along Edsa and serves about half a million passengers a day.

An original proponent status gives a firm a big advantage should the project be auctioned off under a Swiss challenge, a type of bidding process that allows rivals to submit competing offers.

In case another group submits a better offer, the original proponent has the right to match those terms and win the project.

The next step is securing the approval from the National Economic and Development Authority (Neda).

“We are waiting for Neda to inform us when they want to have the first meeting to review the terms,” Lim said.

The offer comes amid an ongoing row between the Department of Transportation and Busan Universal Rail Inc., MRT-3’s maintenance provider since January 2016.

The railway system, which opened in 1999, suffers from frequent breakdowns, disrupting the commute of its riders.

The DOTr had already signaled it wanted to cancel Busanís three-year contract. Busan, for its part, accused the government of withholding fees over the past 11 months and scored the DOTr for its alleged inaction on a needed rail replacement project.

“We are coming up with a transition team for MRT,” MRT-3 general manager Rodolfo Garcia said on Friday. “We’re preparing just in case the [Busan] contract is canceled.”

Metro Pacific has had its eye on the MRT-3 since 2011 when it first made an offer to take over the railway line.

At that time, it also sealed a ìcooperation agreementî with various groups with interests in MRT-3. This would allow the company to exercise options to gain a stake in private sector owner Metro Rail Transit Corp.

Metro Pacific’s offer at that time was rejected. The Department of Transportation under President Aquino decided to pursue the buyout itself, although the endeavor was unsuccessful because it failed to secure funding from Congress.

Metro Pacific is also planning to buy out MRTC’s government shareholders.

The state-owned Development Bank of the Philippines and Land Bank of the Philippines hold about 77 percent of MRTCís economic rights, acquired through bondholders, and about a fifth of its voting shares.

Metro Pacific, whose portfolio spans water distribution, power, toll roads and hospitals, has exposure in the railway sector through Light Rail Manila Corp., a consortium with Ayala Corp. that operates and is expanding the Light Rail Transit Line 1 to Cavite province.

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