Gov't to take over MRT-3
MANILA, Philippines - The government has decided to regain full control of a crucial urban infrastructure, the Metro Rail Transit line 3 (MRT-3), by 2013 in a move that would likely pit the Aquino government again against the group of businessman Manuel V. Pangilinan.
Proceeding with the ownership issue hounding efforts to improve and expand the MRT-3 will involve buying out the owners of financial instruments previously issued that resulted in a complex ownership structure.
"Government (referring to President and the Cabinet secretaries) will spend US$1 billion to take over MRT-3, including buying out the bonds," Transportation Secretary Joseph Emilio Abaya told reporters in a briefing on Tuesday, December 18.
"Target is early next year to executive the buy out plan," he added.
Abaya has previously said the government would like to settle the ownership issue in MRT-3 before it auctions off the rail system's operations and management (O&M) under the public-private partnership (PPP) scheme as part of efforts
The government, through state-owned Land Bank of the Philippines and Development Bank of the Philippines (DBP), owns 80% economic interest in MRT-3, but Abaya said “government ownership is not felt” simply because the private sector, which holds the remaining 20%, has more voting rights than the government banks.
The Pangilinan group is behind Metro Pacific Investment Corp. (MPIC), which claims it has the right to operate, maintain and expand the MRT-3 through its controlling stake in Metro Rail Transit Corp. (MRTC), the consortium that built the railway system.
The complicated structures of MRT-3's ownership and economic interest were both a result of the government's generous financial guarantees to the private proponents in the 1990's and the succeeding efforts to resolve the mounting debts the government had to shoulder following populist moves to keep fares down.
While these past issues became stalled efforts to improve services, the Aquino government's wavering on its previous efforts to privatize the rail's O&M via the PPP scheme also delayed interim efforts, including the purchase of new and more cable cars.
MRT-3 has been bursting at the seams, with commuters packed like sardines or enduring occasional stalling of the system. - Rappler.com