MPIC, SMC bids for MRT-3 rejected

MANILA, Philippines — The Department of Transportation (DOTr) will decline the privatization offers for the Metro Rail Transit Line 3 (MRT-3) made by tycoons Manuel V. Pangilinan and Ramon Ang, as it eyes to get additional offers from the private sector.

Transportation Secretary Jaime Bautista told reporters that he prefers to conduct the privatization of the MRT-3 through a solicited bidding similar to the ongoing procedure for the Ninoy Aquino International Airport (NAIA).

As such, the DOTr will reject the unsolicited proposals to operate and maintain the MRT-3 filed by Pangilinan’s Metro Pacific Investments Corp. (MPIC) and Ang’s San Miguel Corp. (SMC).

Right now, the DOTr is working on the terms of reference that will be issued for the bidding. The Asian Development Bank is helping the DOTr in drafting the terms for the project.

Bautista has shown his preference for solicited bidding in the privatization of transport assets. In NAIA, for instance, the Manila International Airport Consortium (MIAC) had submitted a P267-billion proposal to rehabilitate the gateway.

However, MIAC failed to secure approval to proceed with its plan as the DOTr decided to solicit fresh proposals for the project.

Bautista said he wants the privatization of MRT-3 to undergo a solicited bidding for competition purposes, adding that the process allows the government to dictate the terms.

At present, SMC maintains the upper hand in the battle for MRT-3 as it was awarded the original proponent status by the Duterte administration.

Meanwhile, MPIC tied up with Japanese multinational Sumitomo Corp. in submitting its MRT-3 proposal, reviving its interest to operate and maintain the rail system. In 2011 the company made a $524-million proposal to modernize the MRT-3, but the government denied it because of its demand to increase train fares.

MPIC holds a majority stake in the operator of the Light Rail Transit Line 1 (LRT-1), while SMC is putting up the Metro Rail Transit Line 7 (MRT-7) that will run from Quezon City to Bulacan. Both LRT-1 and MRT-7 will connect to the MRT-3 once the government completes the Unified Grand Central Station, making the MRT-3 a critical railway to control for MPIC and SMC.

The DOTr is studying options on how to privatize the MRT-3, as the contract with Sobrepeña-led Metro Rail Transit Corp. will expire in 2025.

The agency plans to release the invitation to bid for the privatization of the MRT-3 by the second semester of the year.