The Metro Rail Transit Line 7 (MRT-7) held recently its groundbreaking ceremony, with outgoing Philippine President Benigno Aquino III as guest of honor. The ceremonial event, typical of any big-ticket infrastructure project, marks day 1 of actual construction. It comes 8 years after it was first awarded under the public-private-partnership (PPP) scheme, and 14 years after it was proposed by the Universal LRT Corp. BVI Limited (ULC). Mr. Wallace was on the Board.
“We are finally ready to start construction," San Miguel Corp. (SMC) President and CEO Ramon S. Ang said during the groundbreaking ceremony of the much delayed MRT-7 railway project at the Quezon Memorial Circle in Quezon City. SMC owns 51% stake in ULC, the project proponent for MRT-7.
MRT-7 is a combined 45-km of road and rail transportation project from Bocaue exit North Luzon Expressway (NLEX) to MRT3 at North Avenue-EDSA (see Figure 1. Project Map of MRT- 7) . The 22-km, 6-lane asphalt road will connect the NLEX to the major transportation hub development in Araneta-Colinas Verdes Subdivision, City of San Jose del Monte.
The 23-km, mostly elevated, MRT starts from Tala and ends at the integrated MRT 3/MRT7 station at EDSA near SM North EDSA Mall and Trinoma Mall. The rail component of the MRT-7 is envisioned to operate 108 rail cars in a 3-car train configuration.
The P69 -billion MRT-7 is expected to initially accommodate 350,000 passengers daily and shorten travel time from the current 3.5 hours on the road to 1 hour. The project is expected to undergo further upgrades after the start of its operations with the ultimate goal of accommodating 800,000 passengers per day.
The MRT-7 railway project, first conceived in the late 1980s as part of the seamless railway plan for Metro Manila, has had a colorful history before it has finally reached this point in time. The Wallace Business Forum (WBF) has been keenly following the developments in MRT-7 ever since ULC submitted an unsolicited proposal to the Department of Transportation and Communications (DOTC) in 2002 (see Table 1. Timeline of Events of MRT-7).
Several challenges almost derailed the project including multiple changes made in the original project details (at least 15 revisions were done on the original proposal upon the request of the government), controversies over the application of Swiss Challenge to ULC’s unsolicited proposal, the delays in securing project funding, right-of-way (ROW) acquisition issues, etc. The MRT-7 project was also delayed by the change of government leader and a controversy over whether the common station should be built at SM North EDSA or at TriNoma.
As of May 2016, the issue of the common station remains unresolved. If the MRT-7 project had started on time as planned in its original 2002 proposal submitted by the ULC, Metro Manila would have had the 4th railway already working in 2006. As it is, the long-suffering commuters of Metro Manila would have to wait until 2020 to use the MRT-7.
A not so common, Common Station
It’s been 2 years since the SM Group sued the government over the issue of location of the common station for the 3 railway lines of MRT-3, LRT-1 and MRT-7. This issue alone resulted in delays for 2 major railway projects. Until now, the government is still unable to decide how to go about resolving it.
The latest suggestion to resolve the issue of the common station is the proposal of Metro Pacific Investments Corp. (MPIC) that it will build an interim terminal within the “triangle of Trinoma (mall) and SM (mall)” in Quezon City. This “interim station” is code speak for a temporary infrastructure and is MPIC’s solution to finally get construction on the way for 2 of the pending railway projects affected by the common station issue – the MRT-7 and MPIC’s own project, the P64.9-billion ($1.38-billion) LRT1 Cavite Extension.
The MPIC suggestion comes after the Department of Transportation and Communication’s (DOTC) announcement that it will push for the construction of 2 stations instead of one as a solution to the long-standing issue of location for the Common Station—a cowardly compromise. Let’s hope the Duterte government will have the guts to declare only one, common station.
In a Senate hearing in November 2015, Transportation Secretary Joseph Emilio A. Abaya said, when pressed for an explanation for the delays in MRT-7 construction, that the government is in talks with MRT-7’s project proponent, Universal LRT Corp. (ULC), for the funding of a station near SM North EDSA, while the government would fund the other station near Trinoma Mall. In effect, under the government’s proposal, 2 stations – one station that will connect MRT-7 to MRT-3 and another that will connect LRT-1 and MRT-3 – will be built, making the plans for a Common Station, no longer common. While the government’s solution is an obvious middle ground to the issue and would certainly appease the competing interests of 2 of the biggest malls in the area – SM Prime Holdings’ SM City North EDSA Mall and Ayala Corp.’s Trinoma Mall, both of which want the Common Station for the guaranteed foot traffic (e.g. shoppers) it will bring—it goes against the reasons for why the idea of a Common Station was included in the plans for the railway projects in the first place. The Common Station was meant as a singular hub that would connect MRT-3, LRT-1 and MRT-7 and allow Filipino commuters who will use the 3 railways a comfortable, safe and seamless travel from one railway line to the next (see Figure 2. SM Mall vs TrinoMa Mall Common Station Proposal). Apart from efficiency, the Common Station was proposed to create cost-savings for the government.
“We will suggest for just one common station in the middle, one exit to SM North EDSA and one exit to Trinoma. Through this, it will increase foot traffic in both malls. This is better instead of putting up 2 common stations wherein passengers will need to transfer from one common station to the other,” MPIC Chairman Manuel Pangilinan declared in a statement. MPIC and Ayala Corp., through its consortium Light Rail Manila, is set to construct the LRT- 1 Cavite Extension which is the project most affected by the Common Station issue. The P1.4-billion ($29.77-million) common station project has been bundled with the LRT-1 Cavite Extension deal which was awarded under the public-private-partnership (PPP) scheme in October 2014
The problem over the Common Station began in 2014 when the government insisted that putting up the proposed Common Station near Trinoma mall instead of SM North EDSA Mall would result in “P1 billion ($21.26 million) in savings to the government”. However, the government had already signed a memorandum of agreement (MOA) in September 2009 with the SM Group that the Common Station would be built beside SM North EDSA mall. Under the MOA, the Philippine government through its implementing agency, the Light Rail Transit Authority (LRTA), agreed to interconnect the Light Rail Transit Line 1 and Metro Rail Transit Lines 3 and 7 through a common station in front of SM City North EDSA and name the station after the mall, in exchange for a grant of P200 million ($4.25 million) from the SM Group. The design of the Common Station near SM North ESDA Mall was even included in the project details of MRT-7.
The declaration of the government to unilaterally scrap the MOA with the SM Group at the back of the “P1 billion cost savings” and include in the LRT-1 Cavite Extension project details plans for a Common Station near Trinoma Mall instead of SM North EDSA mall, led to the filing of a lawsuit of SM Group against the government on June 3, 2014 and the subsequent hold order ruling from the Supreme Court on August 1, 2014.
According to SM Group, it was suing the government because it was "... in complete breach and disregard of the terms of the MOA, and without any official notice to SM Group despite the latter's repeated formal inquiries, the DOTC unilaterally relocated the station to Trinoma and made the same a mere component of the recently bid out LRT Line 1 Cavite Extension Project,” The TThe problem started when the government changed its mind on an agreement previously made with SM Group. SM Group further said that the proposed Common Station in front of SM North EDSA was duly approved by the National Economic and Development Authority (NEDA) Inter-agency Coordinating Council as a priority infrastructure project in 2007 and it was approved by the NEDA Board on July 7, 2009, thus, the project’s cost details would have already been reviewed, studied and deemed appropriate by the government prior to the signing of the MOA. The government cannot, on the back of another study conducted in May 2013 that shows that a possible relocation of the proposed Common Station to Trinoma would generate as much as P800 million to P1 billion in savings for the government, suddenly renege on its signed commitment with SM Group. The DOTC’s declaration came after the transition of government leadership wherein the new officials of DOTC under the Aquino administration decided to review all contracts made under the previous Macapagal-Arroyo administration.
The government back in May 2013 defended its decision to back off from the MOA with SM Group stating that it cannot in good faith push through with the project given the huge costsaving for the government and allow the Filipino taxpayers to carry the cost of an additional P1billion pesos. But now, it seems that the government has changed its mind again, as it is now pushing for a compromise agreement of building not one, but 2 stations, one in each mall – a compromise solution that would likely be more expensive than a singular Common Station. When the government could have just decided to stick to the original agreement with SM Group or if it insisted on the relocation, given back to SM Group the P200 million it paid with some compensation for their troubles. The issue over the Common Station has already resulted in 2-years of additional delay in the start of construction of 2 multi-billion pesos worth of badly needed railway projects the MRT-7 and the LRT-1 Cavite Extension. The wait on these vital railway projects, which would help ease traffic and the daily commute of Filipinos, has surely already cost the country more than the P1 billion it was hoping to save from the original 2009 Common Station proposal.
“We are finally ready to start construction," San Miguel Corp. (SMC) President and CEO Ramon S. Ang said during the groundbreaking ceremony of the much delayed MRT-7 railway project at the Quezon Memorial Circle in Quezon City. SMC owns 51% stake in ULC, the project proponent for MRT-7.
MRT-7 is a combined 45-km of road and rail transportation project from Bocaue exit North Luzon Expressway (NLEX) to MRT3 at North Avenue-EDSA (see Figure 1. Project Map of MRT- 7) . The 22-km, 6-lane asphalt road will connect the NLEX to the major transportation hub development in Araneta-Colinas Verdes Subdivision, City of San Jose del Monte.
The 23-km, mostly elevated, MRT starts from Tala and ends at the integrated MRT 3/MRT7 station at EDSA near SM North EDSA Mall and Trinoma Mall. The rail component of the MRT-7 is envisioned to operate 108 rail cars in a 3-car train configuration.
The P69 -billion MRT-7 is expected to initially accommodate 350,000 passengers daily and shorten travel time from the current 3.5 hours on the road to 1 hour. The project is expected to undergo further upgrades after the start of its operations with the ultimate goal of accommodating 800,000 passengers per day.
The MRT-7 railway project, first conceived in the late 1980s as part of the seamless railway plan for Metro Manila, has had a colorful history before it has finally reached this point in time. The Wallace Business Forum (WBF) has been keenly following the developments in MRT-7 ever since ULC submitted an unsolicited proposal to the Department of Transportation and Communications (DOTC) in 2002 (see Table 1. Timeline of Events of MRT-7).
Several challenges almost derailed the project including multiple changes made in the original project details (at least 15 revisions were done on the original proposal upon the request of the government), controversies over the application of Swiss Challenge to ULC’s unsolicited proposal, the delays in securing project funding, right-of-way (ROW) acquisition issues, etc. The MRT-7 project was also delayed by the change of government leader and a controversy over whether the common station should be built at SM North EDSA or at TriNoma.
As of May 2016, the issue of the common station remains unresolved. If the MRT-7 project had started on time as planned in its original 2002 proposal submitted by the ULC, Metro Manila would have had the 4th railway already working in 2006. As it is, the long-suffering commuters of Metro Manila would have to wait until 2020 to use the MRT-7.
A not so common, Common Station
It’s been 2 years since the SM Group sued the government over the issue of location of the common station for the 3 railway lines of MRT-3, LRT-1 and MRT-7. This issue alone resulted in delays for 2 major railway projects. Until now, the government is still unable to decide how to go about resolving it.
The latest suggestion to resolve the issue of the common station is the proposal of Metro Pacific Investments Corp. (MPIC) that it will build an interim terminal within the “triangle of Trinoma (mall) and SM (mall)” in Quezon City. This “interim station” is code speak for a temporary infrastructure and is MPIC’s solution to finally get construction on the way for 2 of the pending railway projects affected by the common station issue – the MRT-7 and MPIC’s own project, the P64.9-billion ($1.38-billion) LRT1 Cavite Extension.
The MPIC suggestion comes after the Department of Transportation and Communication’s (DOTC) announcement that it will push for the construction of 2 stations instead of one as a solution to the long-standing issue of location for the Common Station—a cowardly compromise. Let’s hope the Duterte government will have the guts to declare only one, common station.
In a Senate hearing in November 2015, Transportation Secretary Joseph Emilio A. Abaya said, when pressed for an explanation for the delays in MRT-7 construction, that the government is in talks with MRT-7’s project proponent, Universal LRT Corp. (ULC), for the funding of a station near SM North EDSA, while the government would fund the other station near Trinoma Mall. In effect, under the government’s proposal, 2 stations – one station that will connect MRT-7 to MRT-3 and another that will connect LRT-1 and MRT-3 – will be built, making the plans for a Common Station, no longer common. While the government’s solution is an obvious middle ground to the issue and would certainly appease the competing interests of 2 of the biggest malls in the area – SM Prime Holdings’ SM City North EDSA Mall and Ayala Corp.’s Trinoma Mall, both of which want the Common Station for the guaranteed foot traffic (e.g. shoppers) it will bring—it goes against the reasons for why the idea of a Common Station was included in the plans for the railway projects in the first place. The Common Station was meant as a singular hub that would connect MRT-3, LRT-1 and MRT-7 and allow Filipino commuters who will use the 3 railways a comfortable, safe and seamless travel from one railway line to the next (see Figure 2. SM Mall vs TrinoMa Mall Common Station Proposal). Apart from efficiency, the Common Station was proposed to create cost-savings for the government.
“We will suggest for just one common station in the middle, one exit to SM North EDSA and one exit to Trinoma. Through this, it will increase foot traffic in both malls. This is better instead of putting up 2 common stations wherein passengers will need to transfer from one common station to the other,” MPIC Chairman Manuel Pangilinan declared in a statement. MPIC and Ayala Corp., through its consortium Light Rail Manila, is set to construct the LRT- 1 Cavite Extension which is the project most affected by the Common Station issue. The P1.4-billion ($29.77-million) common station project has been bundled with the LRT-1 Cavite Extension deal which was awarded under the public-private-partnership (PPP) scheme in October 2014
The problem over the Common Station began in 2014 when the government insisted that putting up the proposed Common Station near Trinoma mall instead of SM North EDSA Mall would result in “P1 billion ($21.26 million) in savings to the government”. However, the government had already signed a memorandum of agreement (MOA) in September 2009 with the SM Group that the Common Station would be built beside SM North EDSA mall. Under the MOA, the Philippine government through its implementing agency, the Light Rail Transit Authority (LRTA), agreed to interconnect the Light Rail Transit Line 1 and Metro Rail Transit Lines 3 and 7 through a common station in front of SM City North EDSA and name the station after the mall, in exchange for a grant of P200 million ($4.25 million) from the SM Group. The design of the Common Station near SM North ESDA Mall was even included in the project details of MRT-7.
The declaration of the government to unilaterally scrap the MOA with the SM Group at the back of the “P1 billion cost savings” and include in the LRT-1 Cavite Extension project details plans for a Common Station near Trinoma Mall instead of SM North EDSA mall, led to the filing of a lawsuit of SM Group against the government on June 3, 2014 and the subsequent hold order ruling from the Supreme Court on August 1, 2014.
According to SM Group, it was suing the government because it was "... in complete breach and disregard of the terms of the MOA, and without any official notice to SM Group despite the latter's repeated formal inquiries, the DOTC unilaterally relocated the station to Trinoma and made the same a mere component of the recently bid out LRT Line 1 Cavite Extension Project,” The TThe problem started when the government changed its mind on an agreement previously made with SM Group. SM Group further said that the proposed Common Station in front of SM North EDSA was duly approved by the National Economic and Development Authority (NEDA) Inter-agency Coordinating Council as a priority infrastructure project in 2007 and it was approved by the NEDA Board on July 7, 2009, thus, the project’s cost details would have already been reviewed, studied and deemed appropriate by the government prior to the signing of the MOA. The government cannot, on the back of another study conducted in May 2013 that shows that a possible relocation of the proposed Common Station to Trinoma would generate as much as P800 million to P1 billion in savings for the government, suddenly renege on its signed commitment with SM Group. The DOTC’s declaration came after the transition of government leadership wherein the new officials of DOTC under the Aquino administration decided to review all contracts made under the previous Macapagal-Arroyo administration.
The government back in May 2013 defended its decision to back off from the MOA with SM Group stating that it cannot in good faith push through with the project given the huge costsaving for the government and allow the Filipino taxpayers to carry the cost of an additional P1billion pesos. But now, it seems that the government has changed its mind again, as it is now pushing for a compromise agreement of building not one, but 2 stations, one in each mall – a compromise solution that would likely be more expensive than a singular Common Station. When the government could have just decided to stick to the original agreement with SM Group or if it insisted on the relocation, given back to SM Group the P200 million it paid with some compensation for their troubles. The issue over the Common Station has already resulted in 2-years of additional delay in the start of construction of 2 multi-billion pesos worth of badly needed railway projects the MRT-7 and the LRT-1 Cavite Extension. The wait on these vital railway projects, which would help ease traffic and the daily commute of Filipinos, has surely already cost the country more than the P1 billion it was hoping to save from the original 2009 Common Station proposal.
