Showing posts with label management of MRT3. Show all posts
Showing posts with label management of MRT3. Show all posts
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.
The DOTC Is Very Confident For MRT3 Equity Buyout? #ViralInternetLinks
What will happen now that the DOTC Secretary is very much confident about the MRT3 buyout? That the 2015 budget will be used for this purpose?
Last, September 2014, the DOTC Secretary spread the word with finality and conviction. He answered all the queries that the Filipino people, media, and politically inclined individuals; even though train breakdowns are making negative image to the present administration.
Even MRTC’s Bob Sobrepena opened up to the media about the true status of MRT Holdings and the DOTC. Secretary Jun Abaya defended his decision-making techniques why he has done such actions.
The DOTC is acting to the best of his knowledge but in fact he’s applying the delaying tactics until the budget for 2015 will be approved. As such, he could buy the remaining bonds to its private counterpart. Likewise, the completion of MRT3 ownership is needed for upgrading the development of MRT3-EDSA. Thus, the operations and management will be only for the government. But for the government, the acquisition budget is the rightful price for the takeover, as computed through the formula provided in the 25-year build-lease-transfer (BLT) contract.
The The Department of Transportation and Communications (DOTC) Secretay Jun Abaya has higher confidence to say, “There is a fixed formula in the BLT, which also provides how to execute the buyout; so there is no room for negotiations. We are buying everything out, including the bonds and the remaining equity interest in private hands. The objective, at the end of the day, is for the government to own 100 percent of the MRT3 line.
MRTC is owned by MRT Holdings II Inc., which, in turn, is owned by MRT Holdings Inc. The government, meanwhile, holds an 80-percent economic interest in MRTC, by virtue of the bonds that the state bought from the private concessionaire.
So, the DOTC Secretary’s playing the game of chance when he totally spread the word of MRT3 buyout. Is he actually sincere of this buyout, or his intention - to buy the remaining bonds from the 2015 budget? 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 DOTC should 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.
However, the DOTC and MRTC must agree with the terms of the acquisition, which includes the price of the takeover.
How about if the MRTC will not approve for this buyout? Is there another story for the DOTC’s side?
As always, let’s wait and see.
Public Hearing on MRT Incident And Continuous Train System Breakdowns #ViralInternetLinks
After the Senate hearing last September 1, 2014 was about the derailment of train coaches last August 13, 2014, and, was looking into the constant train breakdowns which caused the riding public to question the management of MRT3. Being said, that the probe makes the government officials to extend their strategy by way of interpolating the suggestions done by the Senators.
Some of the concerned political people are questioning the integrity of the present maintenance company that won the bidding through the effort of former MRT3 Manager Al Vitangcol and Wilson T. de Vera. The said contract was allegedly and totally manipulated even the company had not enough funds in maintaining this kind of train system at MRT3.
The DOTC entered into a negotiated procurement to replace Sumitomo. It hired the Philippine Trams Rail Management and Services Corp. (PH Trams) and Comm Builders and Technology Inc. (CB&T) joint venture as interim maintenance provider for a monthly service fee of $1.15 million. The existing maintenance provider Global Autre Porte Technique won the bidding for the one-year maintenance contract worth P712.7-million which raised the eyebrows of politically inclined groups.
The MRTC, as owner of the MRT3 system, should be the one to hire the maintenance service provider and government’s role under the build-lease-transfer agreement is to pay for the service. The MRTC hired Japanese firm Sumitomo Corp. to maintain the MRT3 system for its first 10 years and its contract was extended for two years. Sumitomo Corp., which built the MRT3 system, reportedly charged the government $2.1 million on a monthly basis.
And, MRTC as owners, the trains should be maintained properly. If they are maintained properly, they will run properly. When it was Sumitomo that maintained it for 12 years, it was already servicing 500,000 commuters a day . The waiting time was fine and the lines are short. But at present, commuters did sacrifice for their way of life through the unwanted decision-making of DOTC Secretary Emilio Abaya which for sure, doesn’t have enough expertise to manage the MRT3-EDSA .
The DOTC and MRTC were moving in separate directions which resulted to damage the image of the whole management. Because of its negative image done by MRT3 Manager Al Vitangcol and Wilson T. de Vera, the present situation became worst and continuously damages the whole operation. At that time, there’s a scarcity of “technically competent and financially capable” contractors since the government took on the role of bidding out the maintenance contract in 2012, in which, the resulted outcome has been appearing all the time.
Because of the Senate hearing feedbacks to DOTC Secretary, government’s eventual plan of privatizing the operation and maintenance of the MRT3 system is preventing the DOTC from bidding out a longer maintenance contract.
Their purpose could be shown with all their actions to carry out the full services intended for the riding public and to erase the negative aspects of their management at MRT3.
Another bid must be carried out by the DOTC, but other government officials were against by their action. Instead they wanted the MRTC to do the contract because of the BLT Agreement.
What will happen for the next chapter of the MRT3 story? Is there another hearing for former MRT3 Manager Al Vitangcol and Wilson T. de Vera? Let’s wait and see.
