Osmeña: MRT-3 better off with MVP

Public commuters whose patience are wearing thin at the spate of breakdowns and delays that underscore the wretched state of the MRT-3 share the sentiment of Quezon City Rep. Winston Castelo who wants to slap economic sabotage charges against DOTC and LRTA officials.

The DOTC virtually took over the maintenance of the MRT-3 when it suddenly dumped Sumitomo Corp. in 2012 with very little notice and, without benefit of any public bidding, “handed over” the maintenance contract to PH Trams and later on to current maintenance provider APT Global. As everyone knows, everything has been downhill since then, with the MRT now facing the prospect of a shut down after APT Global admitted that the stock of rails handed over by Sumitomo is getting depleted.

Castelo says the proposal to shut down MRT-3 for (long overdue) maintenance work will spell more suffering for ordinary wage earners who have no other option for a cheaper mode of transport to get them to work – which in turn could spell untold economic losses to businesses. And seeing the poor condition of MRT trains – not to mentions the rail tracks – the public is amazed at DOTC’s suggestion to take over by buying the combined 80 percent in bonds of the Land Bank and the Development Bank of the Philippines, which would cost government roughly P54 billion.

Critics have slammed the so-called Equity Value Buy Out, saying it will not solve commuter woes because the agency would only pay for the stocks of the two government bank, but not for additional trains. Others also describe the buyout scheme as merely transferring taxpayers’ money from one government pocket to another. Besides, the private operator has not signified willingness to sell its shares, so what buyout are they talking about?

Sources inform Spy Bits that DOTC has been less than straightforward in justifying the summary termination of erstwhile maintenance operator Sumitomo, ostensibly because the Japanese firm refused to offer any financial warranty to continue operating the MRT-3 and even supposedly demanding a fee much higher that the amount awarded to PH Trams and APT Global for running the system. All lies, our sources inform us, adding that it’s also not true that Sumitomo has supplied MRT-3 with cannibalized spare parts and sold the same to the DOTC as brand new.

On the contrary, the Japanese firm provided financial guarantees under its contract – a fact confirmed by DOTC Undersecretary Catherine Gonzales in one of the Senate hearings. Sumitomo’s contract was also anchored on a “single point of responsibility” principle that included designing, building and maintaining MRT-3. However, when DOTC terminated the Sumitomo contract, it resorted to a “chop-chop” arrangement with PH Trams and APT Global – without the financial warranty clause present in Sumitomo’s contract, sources disclose.

Facts unraveling in the long-running Senate hearings on the sorry state of MRT-3 also reveal that DOTC consistently ignored several capacity expansion proposals to buy additional light rail vehicles, the most recent one from Metro Pacific Investment Corp., after the latter bought into the light rail system via a cooperation agreement with the MRTC. Apparently, MPIC had made an offer under a build-operate-transfer, public private partnership proposal.

Calling the MRT a disaster waiting to happen, Sen. Serge Osmeña expressed indignation at DOTC’s inaction, saying some 500,000 daily commuters are risking their lives. Had the breakdowns and accidents happened in the US, the American government would have been sued for negligence, he said.

Obviously exasperated by the ineptitude he has been witnessing, Serge suggested that the best available solution at the moment would be for the DOTC to ditch its takeover plan and accept instead the 2011 proposal of MPIC.  Saying the buyout would be just a waste of taxpayer money – aside from the fact that merely buying the bonds would not give government control of the MRT – Osmeña is convinced that the best solution would be to negotiate the offer of the group of Manny Pangilinan. “I think’s it’s a very good offer,” the Senator reiterated, noting that MVP is a professional manager and business entrepreneur. 

A lot of people agree with the Senator considering the success of MVP in turning even moribund companies into successful enterprises. Abaya and his inept deputies would do the commuting public – and the taxpaying Filipinos in general – a lot of good if they considered the proposal of the Senator to speed things up and straighten out the kinks in the MRT system. 

Ray Espinosa elected Stargate chair

PLDT director Ray Espinosa has been elected as the new chairman of Stargate Media Corp., PhilSTAR subsidiary and publishing arm of the country’s number one glossy magazine PeopleAsia. The entry of Espinosa as chairman of The Philippine STAR and Stargate is precipitated by the acquisition of the MVP Group of a majority stake at the Phil Star.

Espinosa’s entry in Stargate signals an exciting new era for the magazine publishing company as it looks at putting up or acquiring new titles and going into digital media publishing.  The MVP group is poised to become the country’s most complete media outfit in the Philippines, with PLDT set to develop multimedia platforms with synergy and convergence made possible by the telecoms firm. 

Ray Espinosa replaces Dr. Charles Chante in the Stargate board with STAR president and CEO Miguel Belmonte elected as Stargate vice chairman. Philstar.com president and CEO Kevin Belmonte will remain as Stargate president and associate publisher. Ms. Joanne Rae Ramirez is the PeopleAsia editor-in-chief and general manager.

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