The government will accommodate its planned public auction and the unsolicited proposals for the redevelopment and operations and maintenance of the Metro Rail Transit (MRT) Line 3 concurrently, a ranking government official said.
Transportation Undersecretary Timothy Batan said aside from Metro Pacific Investment Corp. (MPIC), diversified conglomerate San Miguel Corp. (SMC) also submitted an unsolicited proposal for the MRT 3.
And apparently, the proposal was submitted during the administration of former President Duterte. Batan also noted that SMC has received the original proponent status “earlier in 2022.”
Batan said the Department of Transportation (DOTr) is now coordinating with the Public-Private Partnership (PPP) Center for guidance on how to move forward with multiple unsolicited proposals: One from the past administration and the second during the current government.
“There are rules on how to handle multiple unsolicited proposal submissions we are just confirming with the PPP Center,” he said. “We are coordinating with the PPP Center on how to properly address this.”
A Swiss Challenge for SMC’s proposal has yet to be implemented, as the previous DOTr management failed to endorse it to the National Economic and Development Authority (Neda) Investment Coordination Committee (ICC).
Batan said the agency targets to “finalize our way forward” by this week.
To recall, MPIC earlier this month said it submitted an unsolicited proposal for the MRT 3’s redevelopment and operations and maintenance together with partners Sumitomo Corp. of Japan.
The infrastructure conglomerate, which is in the process of delisting from the Philippine Stock Exchange (PSE), has been eyeing the deal since the administration of the late President Noynoy Aquino.
In 2011, it wanted to exercise its 48-percent option—versatile securities—in MRT Corp., the owner of the train line’s assets, proposing to shoulder the upgrade costs of the train system and release the government from the bondage of paying billions of pesos in equity-rental payments.
This proposed method eight years ago would have had MPIC spend $524 million to overhaul the line. It was shelved due to the government’s rejection of the offer.
It was resubmitted in 2014, but was left to gather dust as the Aquino administration was generally not keen on entertaining unsolicited proposals.
When Duterte took office, MPIC submitted a fresh proposal for the MRT 3’s overhaul, offering to expand the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals.
The proposal involves doubling the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.
However, in 2020, the company decided to drop its offer, with MPIC Chairman Manuel Pangilinan saying that the group “no longer cares about it anymore.”
Solicited vs unsolicited
But even with two proposals already under review, Batan said the DOTr will still pursue the solicited route for the deal, citing how it moved forward with the contract for the redevelopment of the Ninoy Aquino International Airport (Naia).
“Remember what we did for Naia? e processed the unsolicited as if there was no solicited [proposal] and we processed the solicited as if there was no unsolicited [bid]. Then we elevated them both to the ICC and to the Neda Board, then that decision on how to move forward will be made,” he said.
The government intends to bundle the contract for the MRT 3 to the similar deal for the Light Rail Transit (LRT) Line 2.
“Earlier our direction has been to pursue a solicited proposal. So, we are actually working with ADB [Asian Development Bank] on a solicited MRT,” he said.
Batan explained that the ADB and the International Finance Corp. (IFC) will aid the DOTr in building the terms of reference for the bundled deal.
“If you look at the process we went through with Naia, you can get an idea on how much it will take. We will of course try to work as fast as we can, remember the directive of the President to us is full speed ahead,” he noted.
This means, Batan confirmed, that the government will be able to publish the terms of reference and conduct pre-bid conferences by “the second quarter or the third quarter of next year.”