Gov't to make taxpayers fund MRT-3 rehab

The government is to take out a Japanese loan by yearend to fix the rotted MRT-3. Sumitomo or any other Japanese firm will be hired for the three-year rehab. Then another contractor will operate and maintain the commuter railway. Seemingly fine and dandy, that three-step process was announced by the Dept. of Transportation the other day.

But wait, two points first need clarifying. How much will the rehab cost, to be borrowed from Japan? And why should we taxpayers, including those from far away Batanes and Tawi-Tawi, pay for the repair of trains privately owned by the original MRT-3 builder?

Clearly, an audit must first be done on the extent of MRT-3’s dilapidation. “I don’t understand why the DOTr is rushing to get a rehab contractor when it doesn’t know yet the gravity of the problem,” Rep. Jericho Nograles (Puwersa ng Bayaning Atleta) remarked. Such audit would determine exactly how much repairs are to be paid. No audit and simply hiring a repairman also would absolve the sins of past contractors, Nograles added. 

The MRT-3 deteriorated starting 2012, when the past DOTr suddenly replaced Sumitomo with a succession of three inept outfits. Owned by ruling Liberal Party men, PH Trams, Global Epcom, and Busan Universal Rail Inc. were paid billions of pesos from Oct. 2012 to Nov. 2017. They hardly replaced crucial spare parts while collecting P55 million a month.

Private Metro Rail Transit Corp. owns MRT-3 under a 25-year build-lease-transfer deal with DOTr till 2025. Controlled then by state-owned Development Bank of the Philippines and Land Bank, MRTC in 2012 was forced out of MRT-3. It was then in charge of maintenance, through its designer-constructor Sumitomo. Desiring to restore the old setup, MRTC is proposing to field a hundred engineers to assess the damage. Then it would rehire Sumitomo to rehabilitate the trains, tracks, signaling, power supply, and stations for two years – without shutting down daily runs. Sumitomo already agreed to charge $150 million. Either MRTC or DOTr will advance the cost, under an income sharing from fare collections.

It is unclear if Sumitomo still would charge $150 million for the repairs if under a loan from the Japanese government. Such loan, although with soft terms, still would be borne by taxpayers who do not necessarily ride the MRT-3. And why would the government make taxpayers shoulder the repair of a facility privately owned till 2025 – without the private owner asking for it?

The MRTC’s deal with DOTr still has eight years to go till 2025. Expectedly it would want to exercise its right to approve whoever would repair and later operate and maintain its railway.

There is the added complication of a costly dispute arbitration between MRTC and DOTr in the Singapore-based International Chamber of Commerce. The tiff began in 2008 when foreign vulture fund manipulators were able to wrest control of MRTC economic rights, which the DBP/LBP later profitably regained. On the eve of departing in May 2016 the past DOTr revived the arbitration by charging partly the MRTC and mainly Sumitomo with supposed contract breaches. It would be unseemly for the present DOTr to rehire a firm that on record it is accusing of reneging on agreements.

Consumerists, meanwhile, are denouncing the quadrupling of the construction cost of the MRT-3 common station with LRT-1 and MRT-7, just to accommodate a private mall in Quezon City. Construction would cost taxpayers P1.8 billion. From that mall a separate subway would be built, also from a Japanese loan, to another mall in southern Metro Manila.

* * *

Catch Sapol radio show, Saturdays, 8-10 a.m., DWIZ (882-AM).

Gotcha archives on Facebook: https://www.facebook.com/pages/Jarius-Bondoc/1376602159218459, or The STAR website http://www.philstar.com/author/Jarius%20Bondoc/GOTCHA