Pangilinan-Ayala group poised to bag MRT3 original proponent status
MANILA, Philippines – The group led by the companies of tycoons Manuel Pangilinan and Jaime Augusto Zobel de Ayala is expected to bag the original proponent status for the takeover and upgrade of the Metro Rail Transit Line 3 (MRT3).
Transportation Secretary Arthur Tugade told reporters last Friday, September 15, that his department will soon give the original proponent status to the Pangilinan-Ayala group.
Once the Department of Transportation (DOTr) formally grants the original proponent status, the MRT3 proposal will be up for the approval of the National Economic and Development Authority (NEDA) Board.
Following NEDA Board approval, the proposal must then undergo a Swiss challenge. Based on government regulations, other private investors can submit competing offers under a Swiss challenge, while the original proponent will be given the right to match them. (READ: Pangilinan-Ayala group eyes MRT3 takeover by early 2018)
"They have set already and initiated a creation of a platform to explore possibilities including privatization to address the issues in MRT3," Tugade said on the sidelines of an event in Taguig City.
Part of the group's unsolicited proposal, the transportation chief said, is resolving the arbitration case filed in 2009 by the MRT3 owner against the government due to, among others, failure to pay equity rental payments on time.
Last week, state-run Development Bank of the Philippines (DBP) said it is open to selling its entire economic interest in the MRT3, a move that can pave the way for a new private owner and operator.
The DBP and the Land Bank of the Philippines (Landbank) own a 77% economic interest in Metro Rail Transit (MRT) Corporation – the owner of the MRT3 – by virtue of its acquisition of asset-backed bonds in 2009. This interest secured the state-run banks 11 of the 14 board seats but did not give them equity ownership.
Once the Pangilinan-Ayala group is given original proponent status and it hurdles the Swiss challenge, it expects to take over the operations, maintenance, and rehabilitation of the MRT3 by early 2018.
It was last July 14 when Metro Pacific Investments Corporation (MPIC), together with Ayala Corporation and Macquarie Infrastructure Holdings Philippines Private Limited, formally submitted an unsolicited proposal for Manila's most congested railway system.
Light Rail Manila Corporation (LRMC) was the special purpose vehicle that MPIC, Ayala, and Macquarie used for the Light Rail Transit Line 1 (LRT1) Cavite Extension Project. The group had said it will most likely use a new corporate vehicle for the MRT3.
LRMC is 55% owned by MPIC, 35% by Ayala's AC Infrastructure Holdings Corporation, and 10% by Macquarie.
The MRT3 is currently being maintained by Korean-Filipino firm Busan Universal Rail Incorporated (BURI), while the system's rail replacement is being handled by the government. – Rappler.com
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