MANILA, Philippines - The Aquino administration hopes to execute the complete government takeover of the operations of the Metro Rail Transit line 3 (MRT3) along EDSA within the year after the Department of Finance (DOF) identified the source of funds for the proposed $1-billion transaction.
Transportation Secretary Joseph Emilio Abaya said in a text message that government agencies involved in the transactions led by the Department of Transportation and Communications (DOTC) as well as the finance department are finalizing the documents for the proposed buyout.
“There are documents being reviewed now. We are hoping it can be executed this year,†Abaya stressed.
He did not give additional details as the transaction is being undertaken by the DOF.
Last December, Malacañang gave the DOTC the green light to pursue the complete government takeover to save on equity rental payments, maintenance cost, debt guaranteed payment, insurance expenses, and others being paid by the agency.
The move would also help state-owned government financial institutions (GFIs) particularly Land Bank of the Philippines and the Development Bank of the Philippines to unload their interest in MRT3 after receiving several warnings from the Bangko Sentral ng Pilipinas (BSP) regarding its investments in the mass transport system.
President Aquino has issued EO 126 directing the DOTC and the Department of Finance (DOF) to buy out MRT3 from the Metro Rail Transit Corp. (MRTC) pursuant to a build-lease-transfer (BLT) agreement.
In 2003, the MRT line’s private concessionaire MRTC then owned by the Sobrepena family’s Fil-Estate Corp., decided to cash in on its investment in the train line by issuing asset-backed bonds for future equity rental payments.
In 2008, the government through Landbank and DBP bought into MRTC by acquiring the MRT Bonds issued by MRT III Funding Corp. issued by the Sobrepeña group. As a result, the government now owns around 80 percent of the economic interests in MRTC.
However, its presence in the board is not felt because it does not have voting rights for its 80-percent stake while First Pacific’s infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) has economic interest equivalent to 20 percent.