The Department of Transportation said over the weekend it plans to privatize the operations of Metro Rail Transit Line-3 as the build-lease-transfer agreement with Metro Rail Transit Corp. is set to lapse by 2025.
MRTC, owned by Metro Rail Transit Holdings II Inc. led by businessman Robert John Sobrepeña, is responsible for the design and construction of the EDSA rail transit system. Formed in 1995, MRTC started building MRT 3 in October 1996, completed it in December 1999 and started full operations in July 2020.
The DOTr said that under the 25-year BLT arrangement, MRTC will transfer the 16.9-kilometer MRT Line 3 to the government by 2025.
“The current agreement under the so-called ‘build, lease transfer, will lapse by 2025. So, we will study the possibility of offering it for a concession like what’s happening in LRT 1,” Transportation Secretary Jaime Bautista said.
Light Rail Manila Corp., a consortium of Metro Pacific Light Rail Corp., AC Infrastructure Holdings Corp., Sumitomo Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., in 2015 won the bidding for the P64.9-billion LRT 1 Cavite Extension, one of the public-private partnership projects of the government.
LRMC took over the operations of LRT Line 1 and built the extension project to Cavite province.
Bautista said the department was looking at the same arrangement for MRT 3. “We would offer it [MRT-3] for bidding,” he said.
MRTC and the government through the Department of Transportation and Communications signed the BLT agreement in 1997 to construct and maintain MRT 3.
The partnership required the DOTr to hold the franchise and run the system particularly the operation and the collection of fares. MRTC built the system, maintained the same to guarantee the availability of the trains at specified headway at specified hours and procured the required spare parts, while the government paid MRTC monthly fees for a certain number of years.
MRTC financed the construction of the modern rail system stretching along EDSA’s 10.5-meter median from North Ave. in Quezon City to Taft Avenue in Pasay City. The company infused P4.49 billion worth of equity into the project.
The train system is designed to carry in excess of 23,000 passengers per hour per direction, initially, and is expandable to accommodate 48,000 passengers per hour, per direction.
Metro Pacific Investments Corp. submitted a proposal to the DOTr as early as 2011 to invest $524 million to rehabilitate and upgrade MRT 3. The administration of the later President Benigno Aquino rejected MPIC’s offer that would involve raising fares.
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 plan buyout did not push through.
MRT-3 and its maintenance provider, Sumitomo-MHI-TESP, completed the rehabilitation of the rail line in December 2021.
MRT 3 now operates at the speed of up to 60 kilometers per hour from the previous 25 kph. The number of operational trains also increased from 15 to more than 20.