BY DARWIN G. AMOJELAR SENIOR REPORTER

THE government will create a legal and financial team to take over the Metro Rail Transit Line 3 (MRT 3) by June next year.

Department of Transportation and Communications (DOTC) Undersecretary Glicerio Sicat said the government will deploy legal and financial experts to finalize a strategy for government takeover of the MRT 3.

”We will have a legal and financial due diligence,” Sicat, who is also general manager of state-run Metro Rail Transit Authority (MRTA), said.

The option to buy out MRT 3 was raised three years ago because the government can no longer afford to subsidize the railway’s operations.

Sicat said government is paying rental fees of $10 million a month. This is on top of the $1.67 million for maintenance costs due Japanese operator Tespi Corp., a subcontractor of Sumimoto Corp.

Sicat said the government expects to resolve the legal issues on the ownership of MRT 3 by June next year to enable an expansion of the system.

”Our goal is to remove the Sobrepeñas to expand the MRT capacity,” Sicat said, referring to the original owner of Metrol Rail Transit Corp. (MRTC).

The government cannot procure additional trains for MRT 3 because MRTC has the right of first refusal under the lease contract.

Sicat said the DOTC plans to purchase the shares held by Land Bank of the Philippines and Development Bank of the Philippines (DBP), as well as other shareholders before the privatization process begins.

”We will integrate the LRT Line 1 and MRT 3, then we will bid out the O&M [operation and maintenance],” Sicat said.

The Land Bank and DBP earlier acquired 75 percent of MRT Holdings Inc.—a private consortium that owns MRTC—through Goldman Sachs for $679 million.

”We will own it first and re-privatize it because the BLT [Build-Lease-Transfer] is very one-sided. So, we want to collapse [the contract] first, then we will re-do it in a better
way,” Sicat said.

The MRT 3 contract guarantees a 15-percent return on investment for 25 years.

Metro Pacific Investment Corp. and Sobrepena-owned Fil-Estate Land earlier said they forged an agreement to promote a “smooth relationship” between the private sector and the government towards expanding the MRT 3, including its second phase.

The railway was built under a build-operate-transfer agreement that would be paid in 25 years. It runs through EDSA from Taft Avenue in the south to the EDSA-North Avenue intersection in the north for a total length of 16.9 kilometers covering 13 stations.

At present, MRT 3 has a fleet of 73 Czech-made air-conditioned cars, 60 of which are three-car trains that operate daily. The trains run at a top speed of 65 kilometers per hour covering 13 stations in about 30 minutes, stopping for 25 seconds to 35 seconds per station.