San Miguel eyes SM stake in MRT-7

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) is pursuing the buyout of the SM Group and other minority investors in the $1.3-billion Metro Rail Transit Phase 7 (MRT-7) project, a top official of the project’s main proponent said.

In a chance interview yesterday at the Rockwell Club, Universal LRT Corp. (ULC) vice chairman and former Finance Secretary Roberto de Ocampo said SMC, which is taking over majority control of the project, is in talks with the other members of the consortium to form a new corporation that would implement the MRT-7 project.

 “A new corporation would take over,” De Ocampo said. “In the new corporation, the current minority may be bought out.”

ULC, the main proponent of MRT-7, is 63-percent owned by businessman Salvador Zamora III while other private entities, including the SM Group, control the remaining 37 percent.

SMC had earlier entered into an agreement with Zamora for the sale of his majority stake in the consortium, giving the food-to-power conglomerate a 51-percent stake in the MRT-7 project.

De Ocampo stressed that the creation of a new corporation will not delay the program. “This will not affect the progress because we will continue to move forward.”

He said they expect to finalize the project’s contract within the year and negotiate the finance package afterwards.

The project’s actual groundbreaking is expected in the last quarter of 2011.

 The MRT-7 project consists of a 23-kilometer rail transit system with 14 stations that will be connected to the MRT-3 North Avenue station in Quezon City , stretching all the way to Commonwealth Avenue, Regalado Avenue, Qurino Avenue extension up to San Jose del Monte, Bulacan, and a 22-kilometer access road component.

Eight of the stations will be elevated, three are at street-level and the rest will be underground.

MRT-7 is envisioned to transport 500,000 passengers daily, though its capacity can handle as much as 800,000.

The country’s existing rail lines - Light Rail Transit 1 and 2 and MRT-3, can carry only about one million of Metro Manila’s 2.8 million commuters.