WHILE the intention of Metro Pacific Investments Corp. to rehabilitate, modernize and expand the Metro Rail Transit Line 3 (MRT 3)—a privately owned but government-operated facility—is good, its multibillion-peso unsolicited proposal is viewed by the owners as illegal.
Metro Rail Transit Holdings Inc. Chairman Robert John L. Sobrepeña said his group views the move by the government to welcome an unsolicited proposal for the redevelopment of the rail facility as something without legal basis, simply because the government does not own the infrastructure.
“It’s illegal. There’s no such thing as original project proponent when private sector owns a facility. This is not a greenfield project,” he told the BusinessMirror over the phone.
Metro Pacific submitted in 2017 an unsolicited proposal that involves the expansion of the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. It will double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.
The multimillion-dollar expansion is deemed as an all-encompassing deal, including the improvement of the reliability of rolling stock, the upgrading of power supply, the upgrading of stations and the replacement of rails, which will allow the company to operate the new trains purchased by the government from Chinese train manufacturer Dalian.
Unsolicited proposals are required, under the law, to be subjected to a Swiss Challenge, wherein other groups can offer a similar proposal, and the original proponent can present a counter offer.
The government awarded the original-proponent status to Metro Pacific last year.
“I still don’t have a copy of the proposal. I have yet to receive an offer from them,” Sobrepeña said.
He explained that the government can only allow another proponent to come in once it owns the railway line in the next seven years.
Under its build-lease-transfer contract with the government, Metro Rail Transit Corp. will own the facility that it built for 25 years, while allowing the state to rent the infrastructure for public use. After the concession period, the company is compelled to transfer the ownership to the government.
“The government does not own it until 2025,” Sobrepeña said.
He noted, however, that he is open to meeting with Metro Pacific officials to thresh out the details of the unsolicited proposal. There, Sobrepeña said, the two groups can arrive at a similar and mutually beneficial deal.
“Unless they go to us, that’s the only way that proposal can be legal. We are open to meeting with them. They just have to talk to us,” he said. Metro Pacific has nominated Light Rail Manila Corp. as its corporate vehicle for the MRT 3 deal. The said company, a partnership between Metro Pacific and Ayala Corp., operates the Light Rail Transit (LRT) Line 1.
Its proposal for the MRT mimicked the same provisions under its concession agreement for the LRT 1 operations and modernization deal, which it bagged in 2014 via the Public-Private Partnership Program.
It means that, instead of having a different operator and maintenance provider, the group will be the one to do both, something that Sobrepeña has been pushing for since the government forcibly took over the upkeep of the facility in 2012.
“I can’t speak for his opinion, but Metro Pacific is doing its best, together with the government, to find a way to get the MRT 3 problem fixed for the riding public. We’ll focus on this for now and leave the shouting to others,” David J. Nicol, who sits as CFO at Metro Pacific, told the BusinessMirror when sought for comment.
He cited his group’s experience with LRT 1 operations as his group’s main strength in addressing the issues of the train line. “We are doing a good job with the LRT 1, and it would be great if we can do the same for MRT 3, wouldn’t it?”
The railway facility will be “a challenge” for the company, given the train system’s history of breakdowns, derailments and other technical and legal issues, including the procurement of 48 train cars from Dalian Locomotive and Rolling Stocks of China.
On Thursday Transportation Undersecretary Timothy R. Batan said the government has completed the procurement of an independent audit and assessment (IAA) consultant that will evaluate and make recommendations on what to do with the 48 light-rail vehicles (LRVs) that have already been delivered by Dalian.
The consultant that won the bidding for the said deal was TUV Rheinland, a German firm established in 1872.
“The trains have been delivered, but we are unable to accept them unless our IAA consultant has certified their safety and compatibility with our system,” Batan said.
He also assured that the government will not interfere or influence the consultant’s assessment of the 48 LRVs. “We will not in any way try to influence their independent assessment of the 48 cars from Dalian, and we will just make a decision based on their recommendation.”
“If they’ll say that we can immediately deploy the new trains, we will consider. If they say that we need to make adjustments, we will consider, of course, not at our expense. If they say that we need to return the cars, then we will return them,” Batan explained.
Concerns were earlier raised on the 48 vehicles that the Aquino administration procured. Some include issues on compatibility and even technical specifications. The government paid P3.8 billion for the said train cars.
The MRT 3 ferries roughly half-a-million passengers daily with just 20 train sets plying the Edsa route.
Metro Rail Transit Holdings Inc. Chairman Robert John L. Sobrepeña said his group views the move by the government to welcome an unsolicited proposal for the redevelopment of the rail facility as something without legal basis, simply because the government does not own the infrastructure.
“It’s illegal. There’s no such thing as original project proponent when private sector owns a facility. This is not a greenfield project,” he told the BusinessMirror over the phone.
Metro Pacific submitted in 2017 an unsolicited proposal that involves the expansion of the capacity of the railway system by adding more coaches to each train, allowing it to carry more cars at faster intervals. It will double the capacity of the line to 700,000 passengers a day from the current 350,000 passengers daily.
The multimillion-dollar expansion is deemed as an all-encompassing deal, including the improvement of the reliability of rolling stock, the upgrading of power supply, the upgrading of stations and the replacement of rails, which will allow the company to operate the new trains purchased by the government from Chinese train manufacturer Dalian.
Unsolicited proposals are required, under the law, to be subjected to a Swiss Challenge, wherein other groups can offer a similar proposal, and the original proponent can present a counter offer.
The government awarded the original-proponent status to Metro Pacific last year.
“I still don’t have a copy of the proposal. I have yet to receive an offer from them,” Sobrepeña said.
He explained that the government can only allow another proponent to come in once it owns the railway line in the next seven years.
Under its build-lease-transfer contract with the government, Metro Rail Transit Corp. will own the facility that it built for 25 years, while allowing the state to rent the infrastructure for public use. After the concession period, the company is compelled to transfer the ownership to the government.
“The government does not own it until 2025,” Sobrepeña said.
He noted, however, that he is open to meeting with Metro Pacific officials to thresh out the details of the unsolicited proposal. There, Sobrepeña said, the two groups can arrive at a similar and mutually beneficial deal.
“Unless they go to us, that’s the only way that proposal can be legal. We are open to meeting with them. They just have to talk to us,” he said. Metro Pacific has nominated Light Rail Manila Corp. as its corporate vehicle for the MRT 3 deal. The said company, a partnership between Metro Pacific and Ayala Corp., operates the Light Rail Transit (LRT) Line 1.
Its proposal for the MRT mimicked the same provisions under its concession agreement for the LRT 1 operations and modernization deal, which it bagged in 2014 via the Public-Private Partnership Program.
It means that, instead of having a different operator and maintenance provider, the group will be the one to do both, something that Sobrepeña has been pushing for since the government forcibly took over the upkeep of the facility in 2012.
“I can’t speak for his opinion, but Metro Pacific is doing its best, together with the government, to find a way to get the MRT 3 problem fixed for the riding public. We’ll focus on this for now and leave the shouting to others,” David J. Nicol, who sits as CFO at Metro Pacific, told the BusinessMirror when sought for comment.
He cited his group’s experience with LRT 1 operations as his group’s main strength in addressing the issues of the train line. “We are doing a good job with the LRT 1, and it would be great if we can do the same for MRT 3, wouldn’t it?”
The railway facility will be “a challenge” for the company, given the train system’s history of breakdowns, derailments and other technical and legal issues, including the procurement of 48 train cars from Dalian Locomotive and Rolling Stocks of China.
On Thursday Transportation Undersecretary Timothy R. Batan said the government has completed the procurement of an independent audit and assessment (IAA) consultant that will evaluate and make recommendations on what to do with the 48 light-rail vehicles (LRVs) that have already been delivered by Dalian.
The consultant that won the bidding for the said deal was TUV Rheinland, a German firm established in 1872.
“The trains have been delivered, but we are unable to accept them unless our IAA consultant has certified their safety and compatibility with our system,” Batan said.
He also assured that the government will not interfere or influence the consultant’s assessment of the 48 LRVs. “We will not in any way try to influence their independent assessment of the 48 cars from Dalian, and we will just make a decision based on their recommendation.”
“If they’ll say that we can immediately deploy the new trains, we will consider. If they say that we need to make adjustments, we will consider, of course, not at our expense. If they say that we need to return the cars, then we will return them,” Batan explained.
Concerns were earlier raised on the 48 vehicles that the Aquino administration procured. Some include issues on compatibility and even technical specifications. The government paid P3.8 billion for the said train cars.
The MRT 3 ferries roughly half-a-million passengers daily with just 20 train sets plying the Edsa route.
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