THE OPERATION and maintenance (O&M) contract of the Metro Rail Transit Line 3 (MRT-3) will be auctioned off after the completion of a P53.9-billion buyout deal of MRT Corp. (MRTC) that is expected within the year, government officials said.
“Through the buyout, we’ll be able to bid out the operation and maintenance of MRT-3, but there are still pending legal issues,” Transportation Secretary Joseph Emilio A. Abaya said in a briefing yesterday. He, however, did not elaborate.
For his part, Honorito D. Chaneco, MRT officer-in-charge, said: “[It’s in a] pre-termination clause; It’s too early to tell, but later on, when the O&M [of MRT-3] is privatized, the upgrade of the [MRT-3] system will be easy.”
“Nothing’s finalized yet, as we’re still on the finalization stage of terms of references,” Mr. Chaneco replied.
The government said that it needs to deal with a pending legal arbitration case and undertake four measures before it completes the MRT-3 buyout deal.
“There are pending legal issues which cannot be discussed and need to be resolved so we can proceed [with the buyout],” National Treasurer Rosalia V. De Leon said via text message last week.
Asked when it is targeting to complete the buyout, Ms. De Leon replied: “hard to tell.”
Under Executive Order No. 126 issued by President Benigno S. C. Aquino III last Feb. 28 -- which authorizes the implementation of the equity value buyout of the MRTC -- the Department of Transportation and Communications (DoTC), Department of Finance (DoF), Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP), are required to acquire all outstanding shares of stock and other securities issued by MRTC owning MRT-3, execute a compromise agreement then submit it to the arbitral panel in Singapore, settle local tax liabilities of MRTC, and terminate the build-lease-transfer agreement.
Asked if the government has started undertaking those steps, Transportation Spokesperson Michael Arthur C. Sagcal replied via text message on Aug. 4: “None of those four steps have been undertaken.’
“The DoF is still finalizing the plan to execute those steps.”
“We are hoping that the terms of the buyout are completed by the DoF within the year so we can submit it to arbitral for approval,” Mr. Sagcal added.
MRT-3, which runs from North Avenue in Quezon City to Taft Avenue in Pasay City, serves nearly 500,000 passengers per day, or way beyond its rated capacity of about 350,000. The rail system has a fleet of 73 Czech-made rail cars, of which up to 60 three-car trains operate daily. -- C.J.V. Dela Paz
source: Businessworld
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