MANILA, Philippines – The group of Manuel Pangilinan-led Metro Pacific Investments Corporation (MPIC) will invest up to P20 billion to rehabilitate, operate, and maintain the Metro Rail Transit Line 3 (MRT3) should the government approve its takeover plan.
MPIC on Monday, October 2, confirmed that its MRT3 proposal could reach P20 billion, inclusive of the equity component. This would be P7.5 billion higher than its initial projection.
But MPIC noted that "discussions are still ongoing" in terms of the participation of Ayala Corporation in the MRT3 proposal. (READ: Singson leaves Light Rail Manila, moves to Meralco)
Transportation Secretary Arthur Tugade told reporters last 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 the build-operate-transfer law, 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)
Among the terms of the unsolicited proposal is the resolution of the arbitration case filed in 2009 by MRT3 owner MRT Corporation against the government due to, among others, failure to pay equity rental payments on time.
The government, through the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (Landbank), owns a 77% economic interest in MRT Corporation by virtue of its acquisition of asset-backed bonds in 2009.
The government's interest secured the state-run banks 11 of the 14 board seats, but it did not give them equity ownership.
DBP had 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.
Once the MPIC group hurdles the Swiss challenge, it expects to take over the operations, maintenance, and rehabilitation of the MRT3 by early 2018.