MPIC plans to buy out MRT-3 stakeholders

MANILA, Philippines - Infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) is planning to buy out the stake of the government and other shareholders in the Metro Rail Transit Line 3 (MRT-3).

MPIC chairman Manuel V. Pangilinan told reporters yesterday the company is open to buy out the stake of the government and other shareholders of the MRT-3 system, which runs from North Avenue in Quezon City to Taft station in Pasay City.

“We said in principle we’re prepared to do that,” he said.

Pangilinan also said there have been recent discussions between the MPIC and the Department of Transportation as the firm submitted a new proposal to rehabilitate and improve the MRT-3.

Under the new proposal, the firm would invest about P12 billion to rehabilitate the train system and there would be no increase in fares for at least two years.

MPIC is working with Ayala Corp. and Macquarie Infrastructure Holdings (Philippines) Pte Ltd., its partners for the Light Rail Transit Line 1 Cavite Extension, for the new proposal to rehabilitate the MRT-3.

MPIC first submitted a $500 million proposal to rehabilitate the MRT-3 in 2011.

The proposal was thumbed down, however, as the offer involved hiking fares for the MRT-3.

Earlier, MPIC also expressed interest to buy out the government’s stake in the train system.

In 2011, MPIC said it was open to partner with local or foreign groups to acquire the shares held by government financial institutions Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP) in the MRT-3.

Landbank and DBP hold a combined 80-percent economic interest in Metro Rail Transit Corp. (MRTC), the private owner of the train system.

MPIC has also signed a cooperation agreement earlier, with various groups holding rights and interests in the MRT-3 to acquire a 48 percent stake in MRTC. The firm has yet to exercise that option. 

Under the previous administration, the government was looking to implement the equity value buyout (EVBO) of MRTC to solve issues over the train system’s ownership and to put an end to its need to pay for equity rental payments for the MRT-3.

The buyout was never implemented amid an arbitration case filed by MRTC before a court in Singapore and as the previous administration was not able to forge an agreement with Landbank and DBP.

Pangilinan said it is important to give attention to the MRT-3 as the train system has been through a series of breakdowns in the past years.

 “We all know the MRT-3 has had quite a number of issues for the past many years so, we want to resolve those issues for the benefit of commuters. I am sure the government shares that objective as well,” he said.