DoTr to decide on MPIC-Ayala’s MRT takeover by yearend

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THE Department of Transportation (DoTr) targets to address the Metro Pacific Investment Corp. (MPIC) and Ayala Corp.’s unsolicited proposal for the rehabilitation and takeover of the Metro Rail Transit Line 3 (MRT-3) by the end of the year.

“Due diligence sila ngayon (is on-going). By end of the year, we will address their unsolicited proposal, after finishing maintenance and operating issues of the MRT-3… (then we’ll know) kung uusad ang unsolicited proposal nila (if their unsolicited proposal will progress),” Transport Secretary Arthur P. Tugade told reporters on the sidelines of the inauguration of the Mactan-Cebu International Airport Terminal 2 last week.

MPIC, in a consortium with the Ayala group and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., proposed to take over MRT-3’s operations last July 2017. Under the proposal, the consortium will be investing P20 billion for the system’s rehabilitation and will handle its operations for a period of 30 to 32 years.

The consortium’s proposal will double the MRT-3’s current capacity to 700,000 passengers a day. The railway connecting Quezon City’s North Avenue to Pasay City’s Taft Avenue has long been running at more than 500,000 passengers a day, well beyond its capacity of 350,000.

The DoTr granted the group, which already handles the operations of Light Rail Transit Line 1 (LRT-1), original proponent status (OPS) for the project in November.

It was during this time that the DoTr also terminated its contract with Busan Universal Rail, Inc. for MRT-3’s operations. The transport department alleged that BURI failed to ensure efficient and available trains, and failed to procure proper spare parts.

After securing OPS, an unsolicited proposal will have to be placed under review by the National Economic and Development Authority (NEDA) board. A Swiss challenge will then be conducted wherein other groups may submit counter-proposals. The group with OPS has the advantage to match any counter-proposals in order to win the bid.

Lalabas ang Swiss challenge pag approved na ng NEDA, okay na lahat (We will have a Swiss challenge once the project is approved by NEDA),” Mr. Tugade said.

Recently, the DoTr said it has finalized talks with the Japanese government through Japan International Cooperation Agency for the three-year makeover of MRT-3. The department said that upgrading the railway is set to cost ¥34.48 billion, and will take 43 months.

The government is considering to tap the joint venture of Sumitomo and Mitsubishi Heavy, as they were MRT-3’s maintenance provider from 2000 to 2012.

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. — Arra B. Francia