P56-B budget for MRT buyout ready

Rappler.com
The takeover will translate to billions of pesos worth of savings for government each year

FULL CONTROL. The government eyes to complete soon the takeover of MRT 3 from private sector. AFP PHOTO

MANILA, Philippines – The government has set a budget of P56 billion for its takeover of the Metro Rail Transit line 3 (MRT 3).

Transportation Secretary Joseph Emilio Abaya said the Budget department has approved the amount, which is included in the P2.265-trillion national budget for this year.

“The P56 billion is okay. It is in the 2014 national budget,” noted Abaya.

President Benigno Aquino III issued Executive Order 126 early 2013, ordering the takeover of Metro Rail Transit Corporation (MRTC), which holds the build-lease-transfer (BLT) contract for the MRT 3.

The EO directed the Department of Transportation and Communications and the Department of Finance to buy all shares of stock and securities issued by MRTC and other entities owning the railway, their rights and titles, pursuant to the BLT contract.

Manuel V. Pangilinan-led Metro Pacific Investments Corporation (MPIC), the local unit of Hong Kong-based First Pacific Company, owns majority of MRTC.

Government banks Land Bank of the Philippines and Development Bank of the Philippines hold a combined 80% economic interest, but no voting rights.

The buyout will help the government save billions of pesos each year.

The government pays MRTC annually for rental, maintenance, debt and insurance costs, and a 15% guaranteed return on investment.

Abaya said it will also be easier for government to operate and maintain MRT 3 after the takeover as it will not need the consent of private entities in any decision.

The 17-kilometer MRT 3 from North Avenue in Quezon City to Taft Avenue in Pasay City services close to 600,000 passengers a day, way above its design capacity of 350,000 passengers a day. – Rappler.com