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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?


Anonymous said...

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? - See more at:

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