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Government Really Wants to Buy the MRT3 Completely? #ViralInternetLinks

What transpired in the past for this MRT3 buyout really gave much headache to our leaders and all the Filipinos alike. Even the businessmen, workers and media people were squabbling for money that was intended for this transaction.

The 2015 budget that’s been allocated cannot conform to the whole and complete MRT3 buyout of the government, in which, the taxpayer’s money could be extended for it’s not enough even though the government’s trying its best to push through this buyout.

Transportation Secretary Joseph Abaya said that a so-called equity value buyout of the MRT-3’s operator, Metro Rail Transit Corp. (MRTC), was progressing despite thorny legal issues, including the latter’s suit filed in an arbitration court in Singapore. The buyout was ordered by President Aquino last year to end the huge rental fees guaranteed to its private operator.

It’s really known that this buyout needs the approval of MRT Holdings for any transaction by the government. But this talk never happened as what Bob Sobrepena’s expected. The government allotted P56 billion for the EVBO following Executive Order 126 issued by President Benigno Aquino III in February 2013. (An EVBO is a right given to MRTC in case the government is unable to fulfill its obligations.) But private shareholders of the MRTC insist that the value falls short from its total equity value, and pointed out that the P56 billion only accounts for the bonds controlled by the two state-run banks.

The Senate approved such fund through adding the 2015 budget for maintenance and development of MRT3 system, but not for the buyout. The DOTC wanted for the buyout to be completed, in which, they needed another 100 billion pesos for the bonds. The implementation of the equity value buyout (EVBO) of Metro Rail Transit Corp. (MRTC) could start in the first week of January, with the House of Representatives set to approve the P53.9-billion budget for the government’s takeover within the month.

But to effectiveness of the buyout, the government and MRT Corp. (MRTC), the private concessionaire of the train system, must enter into a compromise agreement first. But, through the compromise agreement with the MRTC, the Department of Transportation Commission (DOTC) Secretary Joseph Abayashould initiate such meeting to put forward of this plans. Entering into a compromise contract would effectively end the ongoing arbitration case in Singapore. The case was lodged against the government in 2008 due to its failure, as the operator of the line, to pay billions of rentals payment to the owner of the rail system.

The reason why the government really wants to buy the MRT3 completely is to have a controlled train system for the riding public. The management, operations and development of MRT3 will have a continuous effect to the government revenues than giving it to private institution. But the fact remains, the government couldn’t complete the whole MRT3 buyout because of funding. That’s why they practiced the delaying tactics for the last 6 months until the 2015 budget will save them. The projected budget came short that they needed money for complete buyout. Likewise, the government has not even consulted with Metro Rail Transit Holdings and formally to talk about the buyout.

ABOUT THE AUTHOR: A freelance writer who meticulously structured and maintained blogs just for you:A LIFE SO FAR AWAYand my other blog:OFW: THIS IS MY LIFE AND STORY Thank you for your valuable time. Follow my business & writings and you'll find what life's meant to be.


Leira Pagaspas said...

.Even if we buyout happens will it improve the service?,I hope it will not go to the pocket of one agency to another, namely, LandBank and the DBP. As a commuter I dom’t see any improvement in the MRT 3 service even after spending P53.9 billion for the buyout plan.

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