The Transportation Department expects to execute the buyout of the Metro Rail Transit Line 3 by early 2016, after two government financial institutions expressed willingness to divest their stake in the rail system.
Transportation Secretary Joseph Emilio Abaya told a forum the government was pursuing the equity value buyout of MRT3 from the private sector and the “actual execution might happen early 2016.”
“We want to push it. In fact, there’s an EO [executive order] signed by the President, directing DoTC and DoF [Finance Department] to execute the EVBO [equity value buyout],” he said.
President Aquino issued Executive Order No. 126 in 2013, directing the Transportation and Finance Departments to buy Metro Rail Transit Corp. out of MRT 3, pursuant to the build-lease-transfer agreement.
He said the funding for EVBO was not an issue, but the “real challenge now is really talking with the GFIs and talking with the DOF because they might take a loss in execution of the buyout.”
Abaya, however, said that state-run Land Bank of the Philippines and the Development Bank of the Philippines, which hold 80-percent economic interest in MRT 3, were “comfortable” with the buyout plan.
The remaining stake is held by creditors of MRTC.
He said the Transportation Department, Landbank, DBP and DOF were set to meet this month to resolve issues on the planned MRT3 buyout.
Abaya said the government would need over P40 billion to take over the MRT 3 today, down from as high as P53.9 billion two years ago.
“It [EVBO] has been lowered because we pay almost half a billion a month for equity rental payments,” he said.
Metro Pacific Investments Corp. earlier proposed a $524-million expansion of MRT 3, which was lower than the government’s $1.13-billion buyout plan. MPIC’s proposal is still pending with the Transportation Department.
Metro Pacific signed a cooperation agreement in 2011 with various groups holding rights and interests in MRT 3, including MRTC, Metro Rail Transit Holdings Inc., Metro Rail Transit 2 Inc. and Monumento Rail Transit Corp., giving the Pangilinan-led company an option to acquire 48 percent.
Metro Pacific has yet to exercise the option.
MRT 3, which runs along Edsa from North Avenue in Quezon City to Taft Avenue in Pasay City, serves 500,000 passengers a day, beyond its rated capacity of 350,000 passengers.
The line has a fleet of 73 Czech-made air-conditioned rail cars.