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The Department of Transportation and Communication Secretary Emilio Abaya has ample guts to proceed with his planned strategies to complete the buyout as per his latest announcement of Department Order for train mass transportation in Metro Manila. His confidence coupled by the Pnoy Administration support made him the focus of so many disappointments coming from different sectors of the society.

The Pnoy Administration’s truly involved and believed the same way as he did. Moreover, he has the support for this MRT3 endeavor all along.

Even in the onset of the MRT3 circus from the past, he maintained his structured goals to claim the ownership of the MRT3-EDSA train system for a complete buyout. The MRT Holdings open suggestions and Senate findings cannot stop him to continue the buyout.

Moreover, the Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya has the option to select better understanding and teamwork with MRT Holdings while maintaining the business interest of the co-owner. But, he’s focused in completing the MRT3 buyout through the release of 2015 budget. “The government buyout of MRT-3, the rail line along EDSA, is still the most advantageous arrangement for riders and taxpayers. Some people are out to derail this plan because they want to continue making money. The allocation of more than P6 billion for the purchase of the remaining bonds of MRT Corp. (MRTC) could be the key to such an option. The P6 billion is part of the P54 billion the House of Representatives has included in the P2.606-trillion 2015 national budget for the state takeover-buyout of MRT-3 next year. Senators deleted the bulk of the P54- billion appropriations. They retained a small part, including P6 billion intended for buying the remaining 15-16 percent of MRTC bonds floated by private investors who built the EDSA rail line system. Two state banks – Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) – now hold more than 80 percent of such bonds. The two banks control MRTC, which owns MRT-3.

If the government is able to buy all of MRTC bonds, it should own the EDSA rail line and rehabilitate it without interference from the remaining private investors. The private investors MRT Holdings claim that the government, by holding MRTC bonds, owns only economic interests, including revenues, while they, the investors, have ownership rights over the system that produce such revenues.

Economic rights and owner- ship rights are one and the same thing, because when the contract between the government and private investors end in 2015, both of these rights and interests will accrue to the state. By then, the state will own the system. The private investors would have no stake at all in MRT-3 after the expiration of the contract.

The failure to match fare adjustments with increasing operating costs caused by inflation have resulted in practically break-even finances for all three lines. In turn, this crippled their ability to invest in large-scale improvements for their facilities, since revenues have only been enough for day-to-day operational requirements. Since government subsidizes around 60 percent of the cost for each LRT-1 and LRT-2 passenger and around 75 percent of each MRT-3 passenger, an estimated P2 billion would be freed up for development projects and relief operations in other parts of the country.

It’s really very hard to impose such fare hike when MRT3 had the negative image for train commuters and the Filipinos alike. Imagine, series of breakdowns were experienced in the past and the security dangled like the Spanish chorizo in the supermarket? There’s no such thing to implement when the MRT3 operations, management and services are in the verge of collapse.

But, DOTC Jun Abaya has been armored to defend what’s good for the commuters without the business interest of some but the economic interest of the Philippines.


The MRT3 buyout would mean to the Transportation and Communications (DOTC) Secretary Joseph Emilio Abayato move forward its long time plan. This plan was delayed due to the fact that the 2015 budget’s nearer to the end. That large sum of money will only redeem MRT bonds now being held by GFIs. In other words, they would just move money from one government pocket to the other, something they are already doing now with the lease payments.

There is a need to point out the difference between equity rights (which belongs to MRTH) and economic rights (that the GFIs hold through the bonds). The original owners MRTHoldings sold their economic rights (the rights to the lease payments of government) when they floated their bonds. But they retain their equity or ownership rights over the MRT 3 rails, trains, etc. which Bob Sobrepena’s using his antics to influence some senators.

When DOTC says the two biggest investors in MRT 3 are Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP), they are talking about economic rights. Indeed, the two state banks hold up to 80 percent of MRT bonds and income arising from the bonds, but the banks still do not own the MRT3 system. They have still to unite with each other to be in tune with the future development.

The beginnings of this MRT3 endeavors are not perfect the way it’s showing from which the maintenance provider were removed by the DOTC. From the onset of this MRT3, the private investors and the government were squabbling for the operations and management, in which, the government were bombarded by the media, political enemies and the Filipino people. While the private investors swayed to the back side of the fence.

Now that the government was trying to eliminate problems in MRT3, the Bob Sobrepena came out in media about helping the DOTC which could minimize the money involved. In fact the series of Senate hearing meant for MRT Holdings to reach out to Senators the following:

1. That they are willing to do the upgrade and capacity expansion, or even a buyout, if only DOTC would talk to them.

2. Gave a new proposal that would fully rehabilitate the rail system and all 73 rail cars for under $100M or about P4.5 billion, totally private sector financed. MRT Holdings II chairman Robert John L. Sobrepena confirmed the offer to Sec Jun in a letter dated Nov. 11, 2014.

3. DOTC could at best only rehabilitate 25 cars for P2.5 billion under chop chop contracts. Anyway, P4.5 billion to let the private sector owners rehabilitate MRT 3 is a long way from the P54 billion DOTC is asking for, which does not even include rehabilitation.

The offer of the private owners of MRT 3 to rehabilitate the system is interesting or they just only stopping the MRT3 buyout of DOTC? It entails no government funds and the fare would be no higher than what is being charged by the buses running at grade level. The private owners want to operate the system this time because as they pointed out, government has proven itself incompetent to properly operate MRT 3. Are they incompetent because of the maintenance problems caused by the incompetent workers?

The most important part of the proposal is to reinstate the single point of responsibility principle. MRTC wants to undertake the maintenance, rehabilitation, and upgrading of the MRT-3 System under one contract managed by the former maintenance provider ---Sumitomo Corporation.

MRTC is promising that “the maintenance would not just include corrective measures, but also preventive maintenance and asset management plan as recommended by the MTR Hong Kong in its preliminary audit report. The rehabilitation would include the immediate procurement of spare parts, replacement of broken and deteriorated rail tracks, and other works necessary to rehabilitate the MRT-3 system as recommended by MTR Hong Kong.”

Without prejudice to the pending arbitration proceedings brought about by DOTC’s decision to procure new trains from China, MRTC agreed to ensure that the commissioning and eventual operations of the 48 new LRVs would be seamless. But final acceptance of the Chinese LRVs also depends on compatibility with the technical specifications of the MRT-3 system.

Wow, a promising statement of the century coming from Bob Sobrepena of the MRT Holdings who never failed us to surprise with his business dealings; CAP, CJHDevCo and MRT Holdings. For sure, readers, you know him?