THE WINDOW is closing for the government to complete the so-called equity value buyout of the Metro Rail Transit Line 3 before President Aquino steps down in the middle of the year.
Transportation Secretary Joseph Abaya told reporters last week that several outstanding issues remained, including the department’s failure to secure approval from state-owned Land Bank of the Philippines and Development Bank of the Philippines. The two banks own most of MRT-3’s economic interests.
There is also uncertainty on the source of funding for the buyout, originally valued at P54 billion. The amount is also being contested by MRT-3’s private sector owner, led by the group of businessman Robert John Sobrepeña.
“Apparently, there are a lot of issues into it. The GFIs are very much concerned about taking a hit or a loss when we execute the amount,” Abaya said at the sidelines of Singapore Airlines’ 50th anniversary event in the Philippines last week.
“We are in an arbitration court and these are all subject to arbitration procedures. What is important is a direction is set and we move toward that direction,” he said.
The Department of Transportation and Communications (DOTC) earlier said the MRT-3 buyout plan was aimed at solving the thorny issue over the railway line’s ownership and end huge rental fees guaranteed to MRT-3’s private owner. The entity that controls the equity is Metro Rail Transit Corp. and its build-lease-transfer agreement expires in 2025.
The buyout plan is outlined under Executive Order No. 167 issued in 2013. It has suffered several setbacks, including a lack of funding after it was excluded from the 2015 national budget.
The developments are happening as the DOTC draws fierce criticism over the state of the railway line, which still suffers from breakdowns, packed train cars and long queues. It carries close to 600,000 people a day, well-above its design limit of 350,000 passengers a day.
The government stands to gain from the MRT-3 deal because, once completed, it will be able to pursue related projects without having to concern itself with legal obstacles coming from the private sector, Abaya had said.