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Proposed private sector buyout in MRT3 now in Malacañang — DOTC's Abaya

November 22, 2012 4:10pm
The proposed buyout of Metro Pacific Investments Corp. (MPIC) in Metro Rail Transit-3 (MRT3) to address the concerns of state-owned Land Bank of the Philippines and Development Bank of the Philippines is now with Malacañang for approval.
 
“Honestly, the decision on equity buyout by the government has proceeded quite well and is now in the Office of the President,” Transportation Secretary Joseph Emilio Abaya told a forum organized by the Economic Journalists Association of the Philippines (EJAP) on Thursday.
 
Bangko Sentral ng Pilipinas (BSP) has warned LandBank and DBP to divest in MRT3 operator Metro Rail Transit Corp. (MRTC), Abaya said during the In the Economic Forum 2012 “PPP: On the Road to Investment Grade.”
 
DBP and LandBank have a combined 80 percent interest in MRTC.
 
“The BSP has been warning DBP and LandBank, saying you guys are banks… ‘What are you doing running rails?’ That is being addressed right now,” said Abaya.
 
The Department of Finance is at the forefront of the MPIC buyout, according to the Transportation chief, saying, “It is more of a DOF than a DOTC play.”
 
Last Oct. 22, the Department of Transportation and Communications (DOTC) announced plans to take over MRT3 by buying out the interest of private companies led by First Pacific Co. Ltd.’s MPIC.
 
Another option the government is mulling about “is for government to take over everything.
 
“We will buy out all private interest and convert it back to government,” said Abaya.
 
MPIC has a proposal to take over MRT3 by buying out government and while diversified conglomerate San Miguel Corp. has offered to provide additional trains for the mass transport system along EDSA.
 
“We are studying all of these and eventually we have to reply both to MPIC and SMC,” Abaya noted.
 
By buying out the private sector in the MRT-3, the government need not pay MRTC yearly fees.
 
A government takeover would translate into billions of pesos worth of savings in taxpayers’ money allotted as subsidies to cover a government-guaranteed 15 percent return on investments to MRTC.
 
 The government shells out an estimated P7 billion in yearly subsidies for the MRT3 operations.
 
Once the takeover is complete, Abaya said government would bid out the operation and maintenance of MRT3 as a public-private partnership project. — VS, GMA News



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