MRT unit says claim of advertising firm a 'desperate move'

MANILA, Philippines - The business arm of the Metro Rail Transit Corp. (MRTC) has dismissed the claims made by an outdoor advertising company as a “desperate move” to avoid paying close to P400 million in debts and potential lawsuits from companies that it had duped into advertising along and above the MRT stations.

MRT Development Corp. (Devco) said that contrary to the baseless claims of Trackworks Rail Transit Advertising, Vending and Promotions, it is the latter that should pay a total of P367 million in financial obligations to Devco, which has the sole authority and prerogative to exercise advertising rights in 13 stations of the MRT 3 system.

Devco had entered into an agreement with Trackworks on Oct. 27, 1998 appointing the latter as the concessionaire in charge of selling advertising spaces and activities in the EDSA MRT for a specific period.

MRT Group of Companies AVP Arnold Laygo said the agreement was renewed up to Dec. 31, 2015, provided that Trackworks complied with all its obligations under the contract.

“However, Trackworks failed to remit to Devco a total of P367 million in payables as of December 2009, leaving Devco with no choice but to terminate their contract and choose another company — Media Puzzle — to handle the advertising component of this railway system,” Laygo pointed out.

He noted that instead of complying with its financial obligations, Trackworks filed separate complaints before the Pasig and Makati regional trial courts against Devco to stop it from terminating their contract and assigning concession rights for advertising spaces in the EDSA MRT to another party.

Moreover, Trackworks also demanded P504 million in claims from Devco using as basis its erroneous assumption that Devco had no right to sublease the EDSA MRT structures for advertising purposes, Laygo revealed.

But the courts threw out Trackworks’ petitions against Devco in at least four instances, pointing out that their contract was already terminated as of September last year when it ignored a final demand letter from Devco to settle its debts to the company, Laygo said.

“The courts even noted that Trackworks’ officers have admitted that they owed Devco P367 million in obligations as of 2009. So how can Trackworks demand even a centavo from Devco based on its fallacious position when its own officers had admitted that their company should pay Devco for unpaid obligations” the MRT official said.

He said that “Trackworks’ legal tactic of turning the issue against Devco was obviously a desperate attempt to escape its financial obligations plus the mountain of lawsuits that it is likely to face from irate advertisers it had hoodwinked into shelling out money for the use of advertising use when it is no longer authorized to sell such rights on the MRT system.

“Trackworks’ monetary claim has no legal leg to stand on. In the first place, nowhere in the courts’ decisions on the various rejected petitions filed by Trackworks did it state that Devco’s advertising rights were curtailed or that the DOTC can issue permits to Trackworks to sell advertising space,” Laygo said.