MANILA, Philippines – The Philippine government targets to implement the buyout of Metro Rail Transit Line 3 (MRT3) assets from owner MRT Corporation before President Benigno Aquino III steps down, with the country’s transportation chief saying “budget is not a problem.”
“We’re really pushing for the EVBO (equity value buyout). We hope and target to implement it before the Aquino administration ends,” Transportation Secretary Joseph Emilio Abaya told reporters on the sidelines of a briefing in Manila on Wednesday, October 21.
The government initially targeted to implement the MRT3 buyout last year, but it was moved after the the bicameral committee in December 2014 realigned the P53.9-billion ($1.20-billion) budget for Metro Manila’s busiest elevated railway system and retained only P18.3 billion ($408.69 million).
Of the P18.3 billion, P4.4 billion ($98.26 million) will be allocated for the buyout; P7.4 billion ($165.25 million) for the rehabilitation and reconstruction of the MRT3; and P6.5 billion ($145.15 million) for the payment of taxes in connection with MRT3’s build-lease-transfer (BLT) contract.
In May, the Department of Budget and Management (DBM) said it plans to tap windfall gain from dividends of government-owned and -controlled corporations (GOCCs) and operations of the National Treasury to fund the planned buyout of MRT3.
But for Abaya, the budget is no longer a problem.
“We will convince the Congress to include it in the 2016 national budget,” Abaya told reporters.
“We’ll talk [with the Department of Finance (DOF), DBM, and Land Bank of the Philippines] on how to execute the EVBO. It’s important that they’re on board with it. We’re scheduling a sit down with them that will hopefully happen within the month,” the transportation chief added.
Asked if the budget remains to be P53.9-billion ($1.20-billion), Abaya replied: “It could be less than that as we have paid some ERPs.”
On February 28, 2013, Aquino issued Executive Order (EO) No. 126, authorizing the implementation of EVBO of MRT Corporation to avert the arbitration case filed in 2009 by the MRT3 owner against the government due to, among others, failure to settle timely the equity rental payments (ERPs).
Under EO No. 126, the DOTC, DOF, DBP, and LBP are required to acquire all outstanding shares of stock and other securities issued by MRTC; execute a compromise agreement then submit it to the arbitral panel in Singapore; settle local tax liabilities of MRTC; and terminate the BLT agreement.
To gain control of the MRTC board and avert the arbitration case, the government instructed the DBP and the LBP to acquire shares of stock and other securities, representing economic interest in MRTC.
Amid its plan to buy out concessionaire MRTC, DOTC said it is pushing through with the implementation of its upgrade and rehabilitation projects for MRT3.
Once the buyout is completed, DOTC said it will then auction off an operations and maintenance (O&M) contract for MRT3 to “tap private sector efficiency and customer service orientation for operational needs, while retaining regulatory functions for passenger protection with government.” – Rappler.com
$1 = P46.43