MRT 3 buyout will save taxpayers P36B – DOTC

MANILA, Philippines - The proposed government buyout-takeover of the breakdown-prone Metro Rail Transit 3, the rail line along Edsa, will be cheaper for taxpayers in the long run, according to Department of Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya.

In a briefing paper submitted to the House appropriations committee, Abaya said since the government is legally bound to pay MRT Corp. (MRTC) $12 million a month up to 2025, “buying out MRTC now will come out about P36 billion cheaper than continuing to pay subsidy to MRTC.”

MRTC is supposed to be the private owner of the Edsa rail line, which transports more than 600,000 commuters every day. Though it is considered a private corporation, it is controlled 80 percent by two government banks – Land Bank and Development Bank of the Philippines (DBP).

The two banks have nine representatives in the 15-member board of directors of MRTC. One of those nine is the board chairman.

Abaya submitted the briefing paper to the appropriations committee chaired by Davao City Rep. Isidro Ungab to justify his agency’s request for P54 billion in the 2015 national budget for the planned MRT-3 buyout-takeover.

“The buyout will allow the DOTC to operate, maintain and expand the MRT-3 system without being hampered by legal impediments that the owners of MRTC may initiate,” Abaya said.

He recalled that in January this year, upon petition by some private owners, a Makati court issued a temporary restraining order (TRO) against DOTC’s procurement of 48 new train coaches. The court later lifted the TRO.

Abaya said the buyout would also allow Land Bank and DBP to comply with an order from the Bangko Sentral ng Pilipinas (BSP) to unload their shares in MRTC.

“As banking institutions, Land Bank and DBP are subject to BSP’s prudential regulations,” he said.

He added that any income realized by the two banks from the buyout would ultimately be turned over to the national government as dividend.

The House has included P54 billion in next year’s budget for the government’s takeover of MRT-3. The amount is equivalent to $1.172 billion computed at P46 to one dollar.