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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.


Gil Camporazo said...

Buying out MRT for sure is the best thing for the government to do as far as generating income. MRT is very beneficial to public riders. It is very advantageous so to speak; that's the very reason as far as I know.

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