DOTC: P54 B enough for MRT-3 buyout

MANILA, Philippines - The P54 billion allocated in the 2015 national budget for the planned government buyout of Metro Rail Transit 3 should be enough to pay off investors, according to Transportation Secretary Joseph Emilio Abaya.

Abaya has informed the House committee on appropriations that the contract between the government and the Metro Rail Transit Corp. (MRTC) contains the formula for computing the value of MRT-3, the rail line along EDSA.

He said his agency just followed such formula in seeking funding for the takeover-buyout.

Based on the funding details submitted by Abaya to the appropriations committee chaired by Davao City Rep. Isidro Ungab, the government would need $1.172 billion to pay off investors in the EDSA rail system.

The amount is equivalent to P53.9 billion computed at P46 to the dollar.

The two biggest investors in MRT-3 are Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP). The two state banks hold up to 80 percent of MRTC, which is the owner of the EDSA rail line. They have majority representation in the MRTC board, including the board chairman.

Abaya placed the value of the two banks’ exposure at $619.1 million, plus a “return” of $312 million for a total of $931.1 million.

He valued “non-DBP/LBP investments” at $95.8 million. His funding request also included $143 million for taxes and $2 million for legal fees.

The Ungab committee has included the amount Abaya requested in the proposed P2.606-trillion 2015 national budget.

In a House hearing last week, Robert John Sobrepeña, who chairs MRT Holdings II and who represents private owners of MRT-3, said they have not received any offer from the Department of Transportation and Communications (DOTC).

He said MRTH II is the “sole and controlling shareholder of MRTC.”

“Under the Corporation Code of the Philippines, a sale of all or substantially all of the assets of MRTC would need the consent of at least two-thirds of the shareholders of MRTC, which means approval of MRTH II,” he said.

He added that the P54 billion set aside in the 2015 national budget would be enough only to pay off Land Bank and DBP.

He estimated that the government would need at least P90 billion for all MRT-3 investors.

Sobrepeña also said the planned buyout won’t solve MRT-3 maintenance problems.

During the House plenary debates on the 2015 budget, in response to questions raised by Bayan Muna Rep. Neri Colmenares, DOTC officials said the government has spent a total of P147 billion for the EDSA rail line.

The amount included P85 billion in rental payments to MRTC, P32 billion in loans incurred by the company which are state-guaranteed, P20 billion in MRTC taxes and P10 billion in maintenance fees, the officials said.