The Transportation Department shelved the Aquino administration’s plan to buy the private investors out of Metro Rail Transit Line 3, an official said over the weekend.
“I think it’s not in the table. Our priority is to improve the service of MRT 3. I think [Budget Secretary Benjamin] Diokno mentioned it. That’s reflective of the agency because he is a Cabinet secretary,” Transportation indersecretary for rail and toll roads Noel Kintanar said.
Diokno earlier disclosed that the government did not allocate funds for the equity buyout of the MRT 3 for 2017.
Former 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.
The planned buyout of the private investors aimed to wind down the 1- percent equity rental that the government was paying under the contract.
The Transportation Department under the Aquino administration earlier estimated that the MRT3 buyout would cost the government over P40 billion.
Land Bank of the Philippines and the Development Bank of the Philippines own a combined economic interest in MRT 3, while creditors of Metro Rail Transit Corp. hold the balance.
Metro Pacific Investments Corp. earlier said it submitted a new proposal to Transportation Secretary Arthur Tugade to expand and maintain MRT 3.
Metro Pacific first submitted a proposal to the Transportation Department in 2011, offering $523-million investments to rehabilitate and upgrade MRT 3. The Aquino administration rejected Metro Pacific’s proposal and opted for an equity value buyout of MRT 3.
Metro Pacific signed a cooperation agreement in 2011 with several 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 First Pacific unit an option to acquire 48 percent. It did not exercise the option.
Metro Pacific chairman Manuel Pangilinan earlier said the company could exercise the option to acquire a substantial stake in Metro Rail Transit Corp. led by businessman Robert John Sobrepeña, once the government approved the proposal to expand the MRT 3 system.
MRT 3, which runs along Edsa from North Avenue in Quezon City to Taft Avenue in Pasay City, serves 500,000 passengers a day, way beyond its rated capacity of 350,000.
The line has a fleet of 73 Czech-made air-conditioned rail cars.
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