The Philippine Star
By Zinnia B. Dela Pena
MANILA, Philippines - Metro Pacific Investments Corp. (MPIC) is open to partnerships with local or foreign groups for its planned buyout of the government’s stake in the Metro Rail Transit 3 train line.
MPIC offered to acquire the shares held by state-owned lenders Land Bank of the Philippines and Development Bank of the Philippines in MRT 3 for $1.1 billion, an amount enough to settle the government’s outstanding debt to MRT Corp. bondholders.
“We are open to partnering with a local or foreign company. In fact, we have been receiving offers from local and foreign groups for a possible partnership with respect to MRT 3 but nothing has been finalized so we can’t disclose any material information yet,” said Melody M. Del Rosario, vice president for media and corporate communications at MPIC.
Sources said MPIC is likely to team up with a big local conglomerate though the publicly-listed infrastructure and health services holding firm can do the MRT 3 project alone.
Company officials earlier said Hong Kong-based conglomerate First Pacific Co. Ltd., the parent firm of MPIC, will help fund the group’s bid for MRT 3.
MPIC, which intends to further diversify its business interests-which already includes high-profile investments in telecommunications, infrastructure, health care, power generation and distribution, reportedly wants to own 51% of the MRT 3 project.
Industry analysts believe there is still a lot of room for growth in MRT 3 given that the current number of passengers is at 500,000 a day, already above the project’s capacity of 300,000.
Should it succeed in taking over the project, MPIC plans to spend $300 million to expand MRT 3’s capacity to 40,000 passengers per hour per direction (PPHD) or 700,000 passengers a day. The budget would also cover additional light railway vehicles, signaling system upgrades, station and depot improvements.
The acquisition will give the group, chaired by telecommunications magnate Manuel V. Pangilinan, 100% ownership of the company that holds the right to operate the train line that runs through the capital’s main expressway.
As part of its proposal, MPIC sought the reduction of the 15% equity rental payments that the government pays to Metro Rail Transit Corp.
The government’s rental fees stood at $118.33 million last year. This figure is expected to hit $130 million a year beginning this year until 2014.
MPIC also sought an extension of the build-lease-and transfer agreement by 15 years or until 2040 to make it financially viable.
The company also believes that the project would be feasible if the government allows an increase in the MRT 3 fare from P12.50 to P30.
MPIC said the government stands to save $150 million in annual subsidies with its proposal.
