House OKs P54 billion for MRT buyout

MANILA, Philippines - The House of Representatives has provided P54 billion in the proposed P2.606-trillion 2015 national budget for the government buyout and takeover of the breakdown-prone Metro Rail Transit 3, the mass rail line along EDSA.

“Yes, it’s included, as requested by the Department of Transportation and Communications (DOTC) and by the President,” Davao City Rep. Isidro Ungab, appropriations committee chairman, said yesterday in a text message.

A select committee composed of majority and minority representatives led by Ungab is finalizing the budget proposal for presentation to the House next week for the third and final reading. After finally approving it, the House will send the spending measure to the Senate for its own approval.

Ungab said the P54-billion MRT-3 buyout-takeover appropriation was included in the “unprogrammed” portion of the proposed budget.

“This means that unlike any item in the programmed portion, this is not funded yet. Its funding would depend on excess revenues and loans to be obtained. But I’m sure the administration can raise the necessary cash, since they will have the appropriation cover,” he said.

In a television interview, Transportation Secretary Joseph Emilio Abaya described as “queer” the ownership of MRT-3.

He said MRT Corp. (MRTC) is the owner of the EDSA rail facility and is regarded as a private firm, though it is controlled 80 percent by state-owned Land Bank and Development Bank of the Philippines.

He said 20 percent remains in the hands of the original investors led by the Sobrepeñas of the financially troubled College Assurance Plan (CAP), a pre-need industry pioneer.

He said the government wants to buy out particularly the share of the private owners so they won’t meddle with efforts to upgrade the EDSA rail line.

Abaya cited a recent decision to purchase 48 new coaches, which a Makati court initially stopped upon petition by private owners. The court eventually allowed the procurement. Delivery of the new coaches will start next year.

He said the government chose the buyout-takeover option, as it is the most economical on the part of the riders and taxpayers, aside from resolving the ownership issue.

He said DOTC, with the approval of President Aquino, rejected offers from two local conglomerates to upgrade MRT-3 “since it would have meant increasing fares and extending the BOT (build-operate-transfer) contract and annual taxpayer subsidies of up to P7 billion a year by 15 years.”

The DOTC chief said the present contract would expire in 10 years.

A state buyout-takeover is the most beneficial option for the more than 500,000 MRT-3 riders and taxpayers, he said.

During the House plenary debates on the proposed 2015 budget, in response to questions raised by Bayan Muna Rep. Neri Colmenares, DOTC officials said the government has already spent a total of P147 billion for MRT-3.

They said MRTC has received P85 billion in “rental payments.” Additionally, the government has paid P32 billion of the loans incurred by MRTC, since such loans were state-guaranteed, and P20 billion for the private company’s taxes. Some P10 billion more has been spent for the maintenance of the rail line.

Colmenares lamented that taxpayers have so far paid a total of P147 billion “for a rail line that was valued at only P28 billion in 2000.”

“And now we want to buy this system for P54 billion more, or for total expenses of more than P200 billion? And the private owners are claiming that P54 billion is not even enough for them? And what are we buying, an old, dilapidated rail line that is frequently breaking down,“ he said.