MANILA, Philippines - The Department of Transportation and Communications (DOTC) hopes to forge a compromise agreement with the Metro Rail Transit Corp. (MRTC) for the complete government takeover of the MRT3.
Transportation Secretary Joseph Emilio Abaya said the government is looking at striking a compromise with MRTC within the third quarter to allow the government to buy back full ownership of the 17-kilometer mass transit system along Edsa.
“We hope to sign a compromise agreement between the DOTC and MRTC that we intend to submit to the arbitration panel,” Abaya said.
The agreement, he explained, involves the buy out of MRTC’s shares in MRT3.
MPIC has a 48 percent interest in MRTC after it entered into cooperation agreement with the Sobrepeña-owned Fil-Estate Corp. in November 2010 regarding its interests and rights in Metro Rail Holdings Inc., Metro Rail Transit 2 Inc., and Monumento Rail Transit Corp.
On the other hand, government financial institutions Land Bank of the Philippines and Development Bank of the Philippines (DBP) control an 80 percent interest but have no voting rights in the company.
He said Landbank has already issued a board resolution regarding the proposed equity value buy out and the agency is now waiting for a similar resolution from DBP.
According to Abaya, the DOTC has also sought an opinion from the Office of the Solicitor General (OSG) regarding the full government take over of MRT3.
“We are awaiting a comment from OSG again as to the buy out afterwhich we will sign a compromise agreement with MRTC then we submit to the arbitration panel,” he said.
MRTC filed an arbitration case in Singapore against the Philippine government in January 2009 due to failure to pay equity rentals in a timely manner, while another case was filed against the government recently over the decision of the DOTC to award a P3.8 billion contract to CNR Dalian Locomotive & Rolling Stock Co. of China for the supply of 48 brand new light rail vehicles for MRT3.
“Yes it requires arbitration blessing,” Abaya said referring to the planned buyout of the private sector stake in MRTC.
He added that the DOTC is confident in the completion of the planned buyout as the government has enough seats in the board of MRTC.