Monday, March 11, 2013

Modernization program of the Metro Rail Transit - Line 3

The government ruled out on Friday all hopes of private sector participation at the proposed expansion and modernization program of the Metro Rail Transit - Line 3.

The decision affects the separate proposals of San Miguel Corp. and the Metro Pacific Investments Corp. which earlier bared plans to upgrade and modernize the facilities of the line stretching 16.9 kilometers across Pasay, Makati, Mandaluyong and Quezon City.

Transport Secretary Joseph Emilio Abaya said the SMC and MPIC proposals will no longer be pursued as the government has already decided to buy out the interest of the private sector at MRT-3.

"SMC has a proposal and MPIC has its proposal but our direction right now is for the buy out to happen," Abaya said on Friday.

This pertains to the plan for government to stop paying the Metro Rail Transit Corp. (MRTC) equity rental, maintenance cost, guaranteed debt payments as well as insurance expense and other items in a transaction seen costing the national coffers close to $ 1 billion.

Malacanang already approved of the plan last December and told the Department of Transportation and Communication to begin the buyout transaction.

MPIC gained control over the MRTC when it acquired the bond holdings of the Fil-Estate Group and offered to spend $ 300 million to expand and modernize the line and $ 350 million more to acquire equity and some of the debt notes issued by the MRTC.

SMC, on the other hand, offered to purchase new light rail vehicles for the line in exchange for revenues.

The proposed buy out plan will be executed under the leadership of Finance Secretary Cesar V. Purisima and enable President Aquino to issue an executive order that formalizes the agreement.

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