MPIC poised to secure original proponent status to maintain MRT-3
Infrastructure giant Metro Pacific Investment Corp. (MPIC) is poised to secure the key original proponent status in its bid to takeover and rehabilitate the busy Metro Rail Transit Line 3 (MRT-3).
This was confirmed Friday by Transportation secretary Arthur Tugade, who made it clear there were still several more steps to hurdle, including the approval of the National Economic and Development Authority as well as a Swiss challenge process.
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. Should another group submit a better offer, the original proponent has the right to match those terms and win the project.
“It doesn’t mean the offer has been approved. It just means there will be discussions, and it will be submitted to Neda,” Tugade told reporters.
By giving Metro Pacific an original proponent status, Tugade further explained that DOTr has “initiated the creation of a platform to explore possibilities, including privatization, to address the issues in MRT.”
Metro Pacific officials did not immediately respond to a request for comment.
Metro Pacific, led by businessman Manuel V. Pangilinan, recently revived a 2011 offer to assume operations of the MRT-3, which runs along Edsa.
The railway system, which opened in 1999, suffers from frequent breakdowns, disrupting the commute of its riders. About 500,000 riders use the MRT-3 daily.
Metro Pacific’s offer includes a P12.5 billion rehabilitation plan through a proposed 30-year concession period.
Tugade said discussions also included resolving arbitration cases that involved MRT-3’s current private sector owner, Metro Rail Transit Corp., whose shareholders include businessman Robert Sobrepeña.
Metro Pacific has long had its eye on the MRT-3. Separate to its 2011 offer to the government, it sealed a “cooperation agreement” with various groups with interests in MRT-3. This would allow the company to exercise options to gain a stake in MRTC.
Pangilinan, Metro Pacific chair, said last month his group was also moving to buy out MRTC’s government shareholders.
The 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.
Metro Pacific, whose portfolio spans water distribution, power, tollroads 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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