MANILA, Philippines—The Philippine National Railways (PNR) is pursuing a negotiated deal to secure the air rights over its train tracks in Metro Manila currently owned and being sold by the state-run Home Guaranty Corp. (HGC).
PNR General Manager Junio Ragragrio said the HGC’s planned bidding for the air rights over 14 kilometers of train tracks from Caloocan to Makati might derail key infrastructure projects such as the planned “connector road” proposed by the group of Manuel V. Pangilinan.
“There’s a very good argument that the two (PNR and HGC) should have a settlement. It would be hard if we did not,” Ragragrio said.
He said the PNR has initiated talks with the HGC’s management, even as he admitted that discussions have been ongoing through “intermediaries.”
“If any other private party gets those air rights, if they plan to build anything, they will still have to deal with us. Whatever they build, the pillars and foundations would be on the PNR’s land,” he said.
Ragragrio’s statements come after HGC President Manuel R. Sanchez expressed surprise over the issues raised by the PNR about the planned bidding.
In a statement, Sanchez disclosed that Ragragrio earlier wrote the HGC opposing the sale of an entirely separate property—the Paco Station, which has historical value.
Sanchez said the HGC assured the PNR that it would ensure the preservation of the Paco Station.
Both the Paco (Mall) Station and the air rights were conveyed to HGC in exchange for assuming the guaranty obligations to investors in the 1996 Sariling Pabahay sa Riles housing project, a joint venture project among PNR, NHA, HUDCC [Housing and Urban Development Coordinating Council] and New San Jose Builders Inc.
To recover HGC’s exposure, both properties, among other assets, have been slated for disposition through outright sale, joint venture arrangements with private companies or other schemes.
The HGC said several firms had expressed interest in acquiring the air rights, seeing its value in relation to the construction of an elevated expressway that would connect the Metro Manila Skyway and the North Luzon Expressway (NLEx).
The firms include the Pangilinan-led Metro Pacific Investments Corp., FF Cruz & Co., MTD Malaysia and at least three other undisclosed firms represented by their lawyers.
PNR opposed the sale of air rights during the pre-bid conference held by HGC last April 13. The PNR cited a memorandum of understanding (MOU) between HGC and PNR that entitled the former to buy back the air rights. However, according to HGC, the MOU expired in September of 2009.
Interested parties have until April 27 to buy bid documents. Bids are scheduled to be opened on June 5.