If the decision was left entirely in the hands of the finance secretary, current portfolio holder Carlos G. Dominguez III on Wednesday said he would sell the government’s stake in the rickety claptrap known as the Metro Rail Transit Line 3 (MRT 3).
He told financial reporters rider experience in those times when the public sector held sway at the 16.9-kilometer-long rail line had been anything but pleasant and that buying out the private equity holders to try to make amends to the hundreds of thousands of riders that use the line everyday does not seem the proper thing to do.
“You know, that is certainly one option, but, if you look at the entire system, most of the other parts of the system are already privately owned. So, it doesn’t seem to make a lot of sense if we buy only one part of it while the rest is owned by people in the private sector. It doesn’t seem to make a lot of sense to do that. It may look a little better if the old system is really operated by the private sector.
“You’ve seen how the government operated it. It was not a sterling example of public service,” Dominguez said.
Dominguez acknowledged the Department of Finance (DOF) even now aims to arrive at an agreement with the Department of Transportation (DOTr) on the prospective full privatization or, alternately, the reacquisition of the rail line spanning the length of Edsa from North Avenue to Taft Avenue in Pasay City.
He said the DOF would defer to Transport ation Secretary Arthur P. Tugade on by the matter of the MRT 3, as that responsibility falls mainly with the agency.
“[This is] really under them. We are involved only because we own shares, and they owe us money through the bonds. Whatever the DOTr decides to do operationally will have effects on our financial position,” Dominguez said.
In August, Metro Pacific Investments Corporation (MPIC) Chairman Manuel V. Pangilinan bared plans to buy out the MRT 3 from its owners, pointing out that the move will go a long way in terms of proper maintenance on railway assets.
Companies who own MRT 3 stakes include: Astoria Investments, Anglo Philippine Holdings, Railco Investments, Metro Global Holdings Corporation, and Sheridan LRT Holdings. The privately held MRT Corporation (MRTC) is signatory to the build-lease-transfer agreement with the MRT 3.
“We are going to come up with a common decision. We had several meetings already with the DOTr, and we are moving toward coming to a common position. By the way, this does not [involve] Manny Pangilinan only. There are other parties involved here,” Dominguez said.
The government has a 77-percent economic interest in MRTC through Land Bank of the Philippines and the Development Bank of the Philippines (DBP).
On Monday the DBP said it was open to selling its interest in MRT 3. According to DBP President and CEO Cecilia Borromeo, unloading the bank’s MRT 3 interests is in its books.
In July the MPIC, in partnership with Ayala Corp. and Macquarie Infrastructure Holdings Philippines Private Limited, formally submitted an unsolicited proposal.
The MRT 3 is maintained by Busan Universal Rail Inc., while the system’s rail replacement is handled by the government.