DOTr to set parameters for MRT-3 bidding

MANILA, Philippines — The government looks inclined to set the parameters for a possible Metro Rail Transit Line 3 (MRT-3) operations and maintenance contract as it places Metro Pacific Investments Corp. (MPIC)’s unsolicited proposal on the back burner.

“If it is unsolicited, they are the one to submit their proposal. If it’s solicited, the terms of reference comes from us,” Transportation Undersecretary Timothy John Batan told The STAR.

Batan said the Department of Transportation (DOTr) is studying the effect of converting the MRT-3 operations and maintenance contract to a solicited project.

Transportation Secretary Arthur Tugade intends to make the project a solicited proposal, wherein the contract will be auctioned amid an existing unsolicited proposal from MPIC.

MPIC, in partnership with Ayala Corp. and Macquarie Infrastructure Holdings (Philippines) Pte Ltd., was granted original proponent status (OPS) by the DOTr last year for its proposal to rehabilitate, operate, and maintain the MRT-3 for 30 years.

Being granted OPS gives MPIC the right to match an offer given by another group via a Swiss challenge.

“There are many steps between granting of the OPS and Swiss challenge, so the advantage of the right to match, that is triggered once we reach the Swiss challenge part, and we are still not yet there,” Batan said.

The rehabilitation component, which was supposed to be part of MPIC’s unsolicited proposal, is now out of the equation as the DOTr announced that Japan’s Sumitomo and Mitsubishi Heavy Industries is returning as the rehabilitation and maintenance service provider of the MRT-3.

“Originally it should have a rehabilitation component but now, there will be none since Sumitomo will undertake the rehab,” Batan said.

The Philippines and Japan will be signing a loan agreement for the rehabilitation of the MRT-3 on Nov. 7 after it faced months of delay.

MPIC chairman Manuel V. Pangilinan two weeks ago said his group has received no official communication yet from the DOTr regarding the plan to convert the MRT-3 contract into a solicited project.

MPIC’s proposed investment for its MRT-3 proposal is P20 billion and it includes a provision of no fare increase for at least two years.

The company has also offered to buy out the government’s stake held by Land Bank of the Philippines and Development Bank of the Philippines as well as other shareholders in Metro Rail Transit Corp. or the private owner of the train system.