MVP group revives bid to buy gov’t stake in MRT3

Infrastructure giant Metro Pacific Investments Corp. is reviving an offer to buy out the government’s interest in the busy Metro Rail Transit Line 3 in Metro Manila, its chair Manuel V. Pangilinan said.

Those renewed discussions, first launched in 2011 but were later sidelined as the Aquino administration rejected private sector proposals and decided to pursue—unsuccessfully—the buyout itself, signaled growing optimism on the part of Metro Pacific this time around.

Pangilinan told reporters yesterday that their plan to rehabilitate and upgrade the aging MRT-3, which suffers from frequent breakdowns, would cost about P12.5 billion.

“There’ll be further cash to take out certain shareholders of the MRT, including the government,” Pangilinan said at the sidelines of an event launching a unit’s digital toll ways program.

He clarified that there was no final amount and that a formal offer has not yet been made, adding: “We said in principle we’re prepared to do that [buyout].”

Pangilinan was referring to the government’s ownership in privately held Metro Rail Transit Corp. (MRTC).

The state-owned Development Bank of the Philippines and Land Bank of the Philippines hold about 77 percent of MRTC’s economic rights, acquired through bondholders, and about a fifth of its voting shares. The rest are held by a group led by businessman Robert John Sobrepeña.

Metro Pacific in 2011 signed a “cooperation agreement” with various groups with interests in MRT-3, including shares held by Sobrepeña.

Describing talks with the Department of Transportation, Pangilinan said his group had conducted several meetings, at Metro Pacific’s initiative, over the past week.

“At least there’s a discussion. For me, that’s a good sign. By no means am I indicating there is an agreement,” he said.

Last week, Ayala Corp. signaled it was interested in joining Metro Pacific in its offer to rehabilitate the MRT-3, which serves about half a million passengers a day.

Ayala and Metro Pacific jointly operate the Light Rail Transit Line 1, which will be extended from Baclaran to the Niog area in Bacoor, Cavite province by 2021. The LRT-1 serves around 400,000 a day.

It was not immediately clear whether Ayala, one of the original investors of the MRT-3, would participate in Metro Pacific’s offer to buy out the government’s share.

“It’s premature to discuss details at this time. As a matter of fact, we have more meetings on the details of the operating context,” Jose Rene Almendras, CEO of Ayala unit AC Infrastructure Holdings, said in an e-mailed response.

“Our experience in LRT-1 rehabilitation and operation has been favorable. I have been personally involved in the rehab process, so we have more confidence in our capabilities as a consortium,” he added.