The Transport Department is unlikely to take over the assets of Metro Rail Transit Line 3 by June despite an executive order issued three years ago.
“We’ve spoken to Secretary [Cesar] Purisima. We’re pushing through. We are already filing the proper motions and pleadings to the arbitration court,” Transport Secretary Joseph Emilio Abaya said when asked about the update on the MRT3 buyout.
While the government was pushing for the buyout, Abaya said the execution would take time because it was under arbitration.
“This is arbitration. It’s not when we signed then, we’re ok. We are in an arbitration court and these are all subject to arbitration procedures. What’s important is a direction is set and we move toward that direction,” Abaya said.
“No one ever assures you of a timeline if you go to a quasi-judicial or full judicial body,” he added.
MRTC in January 2009 filed an arbitration case in Singapore against the government for failure to pay equity rental payments on time.
Abaya added the remaining challenge was the financial issue raised by Land Bank of the Philippines and Development Bank of the Philippines on possible losses once the government executed the buyout.
“The [government financial institutions] are very much concerned about taking a hit or a loss when we execute the amount. We tried our best, very difficult. We’ve chosen a certain track where probably most of us will agree that’s the track to pursue,” he said.
LandBank and DBP own a combined 80-percent economic interest in MRT 3, while the remaining stake is held by creditors of MRTC.
Abaya earlier said the government would need over P40 billion to take over MRT 3, down from as high as P53.9 billion two years ago.
President Benigno Aquino III issued Executive Order No. 126 in 2013, directing the Transportation and Finance Departments to buy MRTC out of MRT 3, under the build-lease-transfer agreement.
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 has yet to be formally rejected by 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 company led by businessman Manuel Pangilinan an option to acquire 48 percent. Metro Pacific has not exercised 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.