DoTC open to revised proposal on MRT 3

The Department of Transportation and Communications (DoTC) is open to having the group of businessman Manuel V. Pangilinan take over and modernize the Metro Rail Transit (MRT) train system instead of bidding out the contract through a public auction.

Transportation Secretary Manuel “Mar” Roxas II said the government has yet to receive Metro Pacific Investment Corp.’s “improved” offer to acquire the MRT, but said it would be reviewed to determine if it could deliver the best results for the commuting public.

Roxas said the department would re-examine MPIC’s revised proposal “so that the interest of the thousands of commuters will not be sacrificed.”

MPIC has signed a “cooperation” agreement with various groups relating to rights and interests in MRT 3 companies—namely Metro Rail Transit Holdings Inc., Metro Rail Transit II Inc., Metro Rail Transit Corp. (MRTC) and Monumento Rail Transit Corp. This includes the interest held by the group of businessman Robert John Soprepeña.

The agreement gives MPIC the option to take over their shares if the concession proposal is accepted by the government. In addition, MPIC has signed agreements with other shareholders to either buy their shares or take over their voting rights, which could give it an equity control of 48 percent and voting rights of more than 70 percent.

Under its original offer, MPIC pledged to spend $300 million to double MRT’s capacity to accommodate 700,000 passengers a day.

This is to be achieved with the purchase of new cars, upgrading of signaling equipment, improving the frequency of train departures and lengthening the number of cars per train. The MRT line on Epifanio de los Santos Avenue carries close to half a million passengers a day, higher than its designed capacity of 350,000 passengers.

The company said its revised proposal would incorporate a provision for a “Swiss” challenge. This means the company will yield to any other party that can come up with a better offer. This provision was included to ensure the transparency of the transaction.

Last week, MPIC president and CEO Jose Ma. K. Lim said the company had brought up its proposal with the new DoTC management.

If and when MPIC’s proposal is accepted, Lim said the group could mobilize resources within six months and execute actual expansion within 12 to 18 months.

The government earlier wanted to bid out a four-year combined operations and maintenance (O&M) contract for the MRT and the Light Rail Transit (LRT) line 1 system. The government wanted the operations of both train lines integrated in a bid to improve services.

But this plan, which was pushed by Roxas’ predecessor Jose de Jesus, has been scrapped.

The new DoTC management questioned the benefit of having a combined O&M service contract for both train lines wherein the government would end up paying the winning bidder P14 billion.

Roxas said this ran counter to the administration’s policy of having private-sector players investing in infrastructure projects at no cost to the government.

Aside from MPIC, other firms that have expressed interest in the O&M contracts of MRT are San Miguel Corp., Ayala Corp., and DM Consunji Inc.