Metro Pacific Investments Corp. on Thursday asked the government to reconsider the equity buyout of Metro Rail Transit Corp., which operates MRT Line 3, and instead allow the conglomerate to take over and expand the mass transit project.
“What we have proposed to government is for them to allow or to consider the expansion plan proposed by MPIC,” Metro Pacific president Jose Ma. Lim told reporters in an interview.
Lim made the remarks after the Budget Department announced that it was ready to release P56 billion to buy out the private sector in MRTC.
The decision affected not only the proposal of MPIC but also of conglomerate San Miguel Corp., which also wanted to upgrade and modernize the 16.9-kilometer MRT Line 3 spanning the cities of Pasay, Makati, Mandaluyong and Quezon.
SMC offered to purchase new light rail vehicles for the line.
Transportation Secretary Joseph Emilio Abaya earlier said the SMC and MPIC proposals would no longer be pursued as the government already decided to buy out the interest of the private sector in MRT 3.
MPIC gained control of MRTC when it acquired the bond holdings of the Fil-Estate Group and offered to spend $300 million to expand and modernize MRT Line 3 and another $350 million to acquire equity and some of the debt notes issued by MRTC.
MPIC now holds 48 percent of MRTC, after signing a cooperation agreement with various groups that hold rights and interests in the rail system, including Metro Rail Transit Holdings Inc., Metro Rail Transit 2 Inc. and Monumento Rail Transit Corp.
President Benigno Aquino III, however, issued Executive Order 126 in February last year, authorizing the implementation of the equity buyout of MRTC.
The government buyout is meant to recover the 15-percent equity rental payment that the government shells out under the build-lease-transfer contract with MRTC. With the buyout, the government ruled out private sector participation at the proposed expansion and modernization program of the MRT 3.
The implementation of the buyout will include the acquisition of either all outstanding shares of stock and other securities issued by MRTC and/or entities owning the MRT Line 3 project (equity purchase) or all rights, title and interests of MRTC in the MRT Line 3 project (asset purchase) pursuant to the BLT agreement.