Tuesday, November 25, 2014

We Cannot Afford The Buyout

The government wants to buy out the Metro Manila Line 3 (MRT) to take over its operation. Their target date is First quarter of this year. But it is impossible if they do that because as of now they had a complaint from Metro Rail Transit Corporation (MRTC). This company filed a suit in arbitration tribunal in Singapore against the Philippine government for throwing all of their rights. The government signed the 1999 BLT agreement that the MRTC. MRTC private shareholders has the right to operate the MRT and they have also a right to choose contractor for the train development.questioning the government: why they gave a contract to Dalian Locomotive & Rolling Stock Co.? Without any proper consultation on their side; but Department of Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya that said that they are not worried, they are very confident that the buyout will happen.

 David Narvasa, spokesperson of the MRTH, said the government has to be in default first before it could invoke the Equity Value Buy Out (EVBO).The government allotted P56 billion ($1.25 billion) for the Equity Value Buy Out . The amount was included in the P2.26-trillion ($50.45-billion) national budget for 2015.However, MRTC’s private shareholders said the amount only accounts for the 80% bonds owned by state-run Land Bank of the Philippines and Development Bank of the Philippines.The government can only complete the buyout if they settle the bonds which cost another PhP 100 billion. which they cannot afford.

Joseph Abaya said that prior to the buyout, the DOTC needs to receive the Solicitor General’s opinion on whether the government should proceed with its plan to take over MRT3. The buyout for MRT3 evolved from DOTC Secretary Jun Abaya's frayed relationship with MRT Holdings and MRTC.Despite the fact that MRTC’s attempt to reach out. Likewise, the train system breakdowns and the drama of the maintenance provider.

But the critics of the administration are in doubt. Can the government really afford this? Are they really concern to the commuters because they witnessed their sacrifices every time they ride in MRT? I’m just wondering because the government is always complaining that they are paying higher subsidies for the commuters. What’s their reason why they want to take over it? Do they want to make a business out of it? If this is their reason, the public would hope that they increase the MRT fare. Are they really ready to manage MRT 3 without the support of a private sector? What would be our assurance that they can handle it properly? There is a tendency that they will pass it to other investors and they will of course pass it on to the commuters.

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