MANILA, Philippines - The government may be unable to execute the equity value buyout (EVBO) of the private sector owner of the Metro Rail Transit Line 3 (MRT-3) by June as it is still awaiting the decision of an arbitration court in Singapore.
Transport Secretary Joseph Emilio Abaya told reporters he recently met with Finance Secretary Cesar Purisima and MRTC chairman Tommy de Leon to discuss the planned EVBO.
“We’ve spoken to Secretary Purisima. We are on board as to what direction we’re gonna take. I met up with chairman Tommy de Leon, the chairman of MRTC. He likewise agrees with the direction. Probably when the President arrives, I’ll brief him of our direction. We’re pushing through. We are already filing the proper motions and pleadings before the arbitration court,” he said.
With an arbitration proceeding, there is no specific timeline on when a decision would be given.
“This is an arbitration proceeding. It’s like going to court. There’s another party there. No one ever assures you of a timeline if you go to a quasi-judicial or full judicial body,” he said.
The arbitration process stems from a case filed by the MRTC in Singapore against the government of the Philippines in 2009 due to the failure to pay the equity rental payments for the MRT-3 on time, as
agreed upon under the build-lease transfer agreement.
Apart from the arbitration proceeding, Abaya said an agreement has yet to be made on the EVBO with government financial institutions Land Bank of the Philippines and Development Bank of the Philippines.
Landbank and DBP have a combined 80-percent economic interest in MRTC.
Abaya said the banks have concerns on the EVBO as its execution may reflect a financial loss on their books.
Earlier, he said the government was targeting to buy out MRT-3’s private owner before the end of the term of President Aquino in June.
In 2013, Aquino issued EO 126 which authorized the implementation of the EVBO of the MRTC by the DOF, Department of Transportation and Communications, Landbank and DBP.
The EVBO would mean the government would not have to pay for equity rental payments for the MRT-3.