TRANSPORTATION Secretary Joseph Emilio A. Abaya warned Metro Pacific Investments Corp. (MPIC) that it risks losing the P1.72-billion Automated Fare Collection System (AFCS) project if the company would exercise its option in MRT Corp. (MRTC) and directly own 48 percent of its shares.
Abaya was reacting to MPIC President Jose Ma. K. Lim’s admission that the shareholders of the railway company are still keen on pursuing the $650-million expansion of the railway system as proposed by the infrastructure giant.
For MPIC to participate in this expansion program, the company needs to exercise its option for the 48-percent versatile security in MRTC.
Abaya said the conglomerate controlled by Manuel V. Pangilinan must be more cautious with its statements, particularly when it comes to its right as an option holder in MRTC, the owner of the assets of the most congested railway line in the country.
He said the execution of the option might result in the firm’s debarment from implementing the P1.72-billion AFCS project.
“We have already rejected that proposal. They need to be more careful with that, because if they execute the option, they become an owner of a rail facility, a ground for disqualification from the AFCS,” Abaya said.
AF Consortium bagged earlier this year the contract to install a unified ticketing system for the Light Rail Transit Lines 1 and 2 and MRT Line 3 that will use a single, stored-value “tap-and-go” card.
The concessionaire is led by Ayala Corp. and MPIC.
“If it makes business sense for them, they could execute [their option],” Abaya noted.
The Cabinet official was referring to the $650-million proposal of the infrastructure giant to expand the capacity of the MRT Line 3.
The local flagship of the Hong Kong-based First Pacific Co. Ltd. wants to expand the capacity of the railway system by adding more coaches to each light-rail vehicle, effectively carrying more cars at faster intervals. The multimillion-dollar expansion plan would effectively double the capacity of the line to 700,000 passengers a day, from the current 350,000 passengers daily.
Aside from the $300-million proposal, the firm also offered the government $350 million for the acquisition of equity and some of the bonds issued by MRTC.
The government plans to acquire the 15-year-old railway line from its contractor through a P53.9-billion buyout offer, which is expected to be carried out sometime this year. The takeover, however, is being delayed by the ongoing arbitration case in Singapore regarding the Philippine government’s apparent irresponsibility of paying the rental fees on time.
MRTC, the concessionaire controlled by the Sobrepeña family, owns the assets of the railway line under a 25-year build-lease-transfer agreement, which mandates the government to pay an annual P7-billion fee in equity rental costs for the state to operate the line.
The railway system is the most-congested line of the three overhead trains in Metro Manila. It has been operating at overcapacity since 2004.
It serves roughly 500,000 passengers a day—beyond its rated capacity of 350,000 commuters—through its 73 train coaches.