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DoTr still wants private firm to take over MRT-3

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THE Department of Transportation (DoTr) said it will continue to seek a private company to take over the operations and maintenance (O&M) of the Metro Rail Transit Line 3 (MRT-3), once the new Japanese contractors finish the rehabilitation of the railway system in two years.

“Long-term and multi-phased ’yung strategy natin for MRT-3.… Phase 3 natin ’yung longer-term natin na operations and maintenance. Meron tayong ongoing review ng unsolicited proposal for the operations and maintenance of MRT-3 [Our strategy for the MRT-3 is long-term and multi-phased…. Phase 3 is the longer-term operations and maintenance of the MRT-3. We have an ongoing review of an unsolicited proposal for this],” Transportation Undersecretary for Railways Timothy John R. Batan told reporters last week.

Last Tuesday, the government officially turned over the rehabilitation and maintenance works of the MRT-3 to Japanese firms Sumitomo Corp. and Mitsubishi Heavy Industries, Ltd. (Sumitomo-MHI) together with TES Philippines, Inc. (TESP).

Mr. Batan said this project is only Phase 2 of the government’s planned approach to improve the MRT-3 system. The last phase would be the entry of a private firm to handle the train line’s O&M — similar to what was done in the Light Rail Transit Line 1 (LRT-1) which is handled by Light Rail Manila Corp. (LRMC).

“The hybrid policy calls for us getting the private sector to operate our existing lines, operate and maintain, and it’s just consistent with that,” he said.

In 2017, a group composed of Metro Pacific Investments Corp. (MPIC), Ayala Group and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd. was given original proponent status (OPS) for its O&M proposal for the MRT-3. The three firms had formed LRMC to operate and maintain LRT-1.




Mr. Batan noted the unsolicited proposal of MPIC is still “ongoing review” at the moment.

“Meron lang kasi tayong some legal issues na nire-resolve. As you may know, meron tayong ongoing arbitration for MRT-3, and part ’yan ng mga considerations natin in the timing of the different phases [We just have some legal issues to resolve. As you may know, we have an ongoing arbitration for MRT-3, and that’s part of our considerations in the timing of the different phases],” he said.

In 2009, MRT-3 contractor Metro Rail Transit Corp. (MRTC) filed an arbitration case in Singapore alleging the Philippine government of delayed equity rental payments in its signed agreement.

MPIC has control in MRTC through a cooperation agreement signed in 2010.

Mr. Batan noted the review of MPIC’s unsolicited proposal is moving forward in parallel with the settlement of the arbitration case.

MPIC President and Chief Executive Officer Jose Ma. K. Lim said in January the company may need to “reconfigure” its MRT-3 proposal following the entry of the Japanese firms. In February, MPIC Chairman Manuel V. Pangilinan said it may be best to “just wait word from the government.”

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez