Militant lawmaker opposes gov’t buyout of MRT-3

MANILA, Philippines — A militant lawmaker vowed to block the government’s plan of equity buyout on the operator of the Metro Rail Transit line 3 (MRT-3), saying the government has spent so much already for the railway system that is prone to constant breakdowns.

During Wednesday’s House of Representatives transportation committee inquiry on the equity buyout, Bayan Muna Representative Neri Colmenares said government should instead question the validity of the contract with MRT Corporation (MRTC), the private company mandated to handle the maintenance of the railway system.

MRT 3 became operational in July 2000 under a 25-year build-lease-transfer (BLT) contract between the Department of Transportation and Communications (DOTC) and MRTC.

MRT Train. INQUIRER FILE PHOTO/RAFFY LERMA

DOTC Undersecretary Jose Lotilla said as of July this year, government has already paid P54 billion in equity rental payment and another P22 billion in loan payments.

This means a total of P76 billion in actual payments under the contract, he added. But this will still be on top of the P54 billion equity value buy-out, partly to allow the government to end paying huge rental fees guaranteed to MRT-3’s private owner while solving thorny issues over the railway’s ownership.

“May derailment, masikip. Kung ganun lang pala ngayon, iba-buy-out pa natin?… Lalabanan namin ang buyout sa puntong we’ve spent so much for this (MRT has been wracked with derailment, congestion. If that is the situation, why will we still buy-out?… We oppose the buy-out because we’ve spent so much for this),” Colmenares said.

Lotilla said the government need to pay in advance the MRTC’s rental fees in one buyout instead of having to pay for it throughout the 25-year contract.

He said this will accelerate the payment so that the MRT line will be transferred to the government ahead of the contract.

But Colmenares said the MRTC seemed not willing to give up its ownership to government.

He added that it is not up to the DOTC to decide on whether the MRT 3 will be transferred to government, but on the Singapore arbitration court hearing the ownership dispute between MRTC and DOTC.

“Your interpretation of the contract is different from the (court’s) interpretation. Lawyers know it can go either way,” Colmenares said.

The militant solon further slammed the privatization of MRT 3 under MRTC, saying the railway system still suffered from constant breakdowns despite being privatized.

“MRT 3 is the epitome of the downfall of privatization,” Colmenares said.

But Lotilla said the failure of the company to comply with some contractual obligations should be seen as the culprit in the bogging down of MRT.

“Kontrata ang may deperensiya. Hindi sa konsepto ng privatization (The defect lies in the contract. Not on the concept of privatization),” Lotilla said.

He said the contract is lenient on the maintenance contractor’s obligation to buy the defective parts of the MRT.

“Kaya ang nangyayayri, hindi nagagampanan ng kontratista ang kanyang obligasyon dahil kulang ang mga safeguards (What’s happening is the contractor cannot fulfil its obligations because of the lack of safeguards),” Lotilla said.

Besides ending the billions of rental payments every year, the buyout is also seen as a way to finally end the arbitration case between DOTC and MRTC.

The buyout is underway amid constant breakdowns plaguing MRT commuters that culminated in a derailment that hurt 38 passengers. On August 13, an MRT train hurtled past the railway at its Taft Avenue station in Pasay City. The defective train was being pushed by another train when the coupler between them broke, sending it crashing through the metal stopper and concrete barrier of the last station.

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