SMC, MPIC go head-to-head for MetroRail

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San Miguel Corp. has submitted a proposal to take over and expand the operations of the Metro Rail Transit (MRT) on EDSA, competing with the earlier bid of the Metro Pacific Investments Corp., led by Manuel V. Pangilinan.

Conglomerate San Miguel Corp. (SMC) has submitted a proposal to take over and expand the operations of the aging and congested Metro Rail Transit (MRT) on Epifanio de los Santos Avenue (EDSA).

The SMC offer was made after corporate rival Metro Pacific Investments Corp., led by Manuel V. Pangilinan, signified its own intention to secure the contract for the train line.

“The MPIC proposal is still on the table for review because SMC offered a similar proposal,” a Department of Transportation and Communications (DoTC) official said Monday.

The official, who is privy to the discussions, requested anonymity because he was not authorized to speak on the matter.

According to the DoTC source, San Miguel proposes to infuse fresh capital into MRT, also known as Line 3, and improve the train line’s operations, at little to no cost to the government.

Also, SMC wants to tie in the MRT Line 3 to the conglomerate’s existing project, the $1.6-billion MRT-7 line—a railway system that will run from Quezon City to the province of Bulacan.

The DoTC official declined to give further details.

In 2010, SMC’s wholly owned subsidiary San Miguel Holdings Corp. signed a deal to acquire up to 51 percent of Universal LRT Corp. Ltd. (ULC BVI), which holds the exclusive right, obligation and privilege to finance, design, construct, supply, complete and commission the MRT-7 project.

Prior to SMC’s submission, the only proposal for the MRT line was from MPIC, which already owns a majority stake in the train line’s concessionaire, MRT Corp.

Given the two competing proposals, the DoTC source said the government could opt to conduct an open bidding for the MRT Line 3’s development contract, instead of entertaining either of the solicited bids.

“That’s what’s being studied, if we can just bid the contract out,” the source said.

The competing offers threaten to cause further delays in the implementation of big-ticket projects of the Aquino administration, which has reportedly caused the country’s economic growth to slow down.

Under its proposal submitted last year, MPIC said it would spend a total of $300 million for the acquisition of new trains and the expansion of train stations. MPIC also offered to buy out the government from the MRT Line 3 for over $1 billion.

In exchange, MPIC wants to raise MRT fares by about P30 per person—double that of today’s rates—to help the company recover its investment. The company also wants the duration of its concession extended by 15 years.

The source said Metro Pacific’s proposal had been forwarded to the Office of the President last November.

He said MPIC had also agreed to be flexible with their estimated fares, upon President Aquino’s request, to make the proposal more attractive to the government.

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  • Anonymous

    MPIC to increase fare and extension of contract by 15 years??? Corporate Greed!!!!

    Improve the services first and let the people see the changes. Why do we increase the fare without any visible changes…. swapang!

  • http://pulse.yahoo.com/_2VLO53PRSSY76BZOWLOHJDM33M jeray

    SMC, d  ba cojuangco eto… kaya gus2 pala e privatized para pala kay tito… TSK TSK. gising gising!!!!!

  • Anonymous

    Be a part owner of toll roads, buy SMC and MPIC in the stock market.

  • http://pulse.yahoo.com/_AN3NFODYO26QONRU7I734NCD5M hakz v

    oo nga tapos lalabas sa mga news channel na OK lang itaas yun pamasahe to improve the services…ginawa na yan ng channel 5 yun sa show ni ariel…conditioning ang tawag jan…di pa rin ako pabor itaas ang presyo ng basic services…switik talaga!

  • Anonymous

    Remember the roads were built on yesterdays dollars/pesos, yet the toll keeps on increasing.
    In 2006 Alabang to Buendia via ground level is about 42 pesos . Now its 122 pesos. for any reason rates should go down after payment of loans. This is why its good to be toll road operator and investors whenever they can should invest alongside with them.

  • Anonymous

    I have seen the effects of full privatization of toll roads , Alabang to Buendia via Skyway 164 Pesos, On the ground level 122 pesos. This is not sustainable for an average car commuter. 

    • http://jaoromero.wordpress.com Jao Romero

      they are selling the national patrimony. it should be treason to sell national roads. can roads even be owned? in a mad world, it can be.

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