MPIC not revising MRT-3 buy-out proposal

MANILA, Philippines – Pangilinan-led Metro Pacific Investments Corp. (MPIC) has no plans to initiate the submission of a revised buy-out proposal for, nor participate in the acquistion of bonds issued by the operator of, the Metro Rail Transit Line 3 (MRT-3) project.

“(If) they ask us to revise, then we will. But if they don’t ask us, then we will not,” said MPIC President Joey Lim told reporters in March, referring to the Department of Transportation and Communications (DOTC).

The proposal is for the expansion of the capacity of the MRT-3. The company offered $300 million to the government for expanding the railway’s capacity. It also offered $350 million for the acquisition of equity and bonds issued by railway operator Metro Rail Transit Corp. (MRTC).

MPIC, a unit of Hong Kong-based First Pacific Ltc., gained control of MRTC through the acquisition of the shareholdings of bondholders. 

President Benigno Aquino III, through Executive Order No. 126, directed the Department of Finance (DOF) and the DOTC to purchase the MRT-3 from MRTC pursuant to a build-lease-transfer agreement.  

The DOTC estimates that the MRT-3 buy-out would cost $1 billion. The plan involves a 77% economic interest from state-owned lenders Development Bank of the Philippines (DBP) and Land Bank of the Philippines.

The buy-out would absolve the government of a 15% equity rental payment. DOTC Secretary Joseph Emilio Abaya pointed out that the government has spent P75 billion on subsidies for the MRT-3 for the past decade.

MPIC chairman Manuel Pangilinan earlier said that his company would respect any decision from the government. MPIC acquired a 48% stake in MRTC after signing cooperation agreements with Metro Rail Holdings, Inc., Metro Rail Transit 2, Inc. and Monumento Rail Transit Corporation. – Rappler.com