DOTC rejects anew MPIC’s MRT-3 offer

MANILA, Philippines - The Department of Transportation and Communications (DOTC) has thumbed down anew the planned $300 million investment proposal of infrastructure giant Metro Pacific Investments Corp. (MPIC) to expand the operations of the congested Metro Rail Transit line 3 (MRT-3) along EDSA.

Transportation Secretary Joseph Emilio Abaya said the agency has again rejected the unsolicited proposal of MPIC to expand the operations of the mass transit system that now ferries an average of 550,000 passengers per day, way above the design capacity of 350,000 per day.

“We have already rejected that,” Abaya told reporters.

In light of the proposed P56-billion equity value buy out of the private shareholders of Metro Rail Transit Corp. (MRTC) paving the way for a complete government take over, MPIC last January revived the proposed $300-million investments to expand the operations of the mass transit system.

MPIC president and CEO Jose Maria K. Lim said in late January that the DOTC should consider the company’s proposal to spend $300 million for the expansion of the mass transit system along EDSA as stated in the build-lease-transfer (BLT) agreement.

“Well the buyout that has been contemplated by government is in that equity value buyout. What we proposed to government is for them to allow or to consider the expansion plan proposed by MPIC and that does not invoke the equity value buyout because it works in the existing BLT agreement,” Lim said last January.

Through an unsolicited proposal, the unit of First Pacific Co. Ltd. of Hong Kong offered to spend $300 million to expand MRT3’s capacity and another $350 million to acquire equity and bonds issued by MRTC.

MPIC has rights over a 48 percent interest in MRTC that it has yet to exercise. The shares were acquired after MPIC entered into cooperation agreement with the Sobrepena-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.

Abaya said Transportation Undersecretary Jose Perpetuo Lotilla has already cautioned MPIC against exercising its right over the shares in MRTC that owns the facilities of the MRT-3 along EDSA.

He pointed out being a railway operator would be a valid ground for the revocation of the P1.72 billion automated fare collection system (AFCS) project that the awarded to the AF Consortium led by MPIC and conglomerate Ayala Corp.

“They should be careful. Usec Lotilla has already warned that if they execute the option, they become an owner of a rail facility that will be a ground for disqualification of AFCS,” Abaya said. “I am sure their lawyers know that,” he added.