San Miguel to acquire 51% of MRT 7 firm

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) is acquiring a controlling stake in Universal LRT Corp. (ULC), the company that owns the long-delayed Metro Rail Transit (MRT) Line 7 project that will run from North Avenue in Quezon City all the way to San Jose del Monte in Bulacan.

At the sidelines of PhilWeb’s stockholders meeting yesterday, SMC president and COO Ramon Ang said they are finalizing an agreement with businessman Salvador Zamora, who owns 63 percent of ULC, to acquire a significant portion of his stake.

Ang revealed that their agreement is for SMC to acquire up to 51 percent of ULC. According to sources, Zamora may end up selling his remaining 12 percent stake to another interested party.

Ang earlier told The STAR that they signed a memorandum of understanding with Zamora for the acquisition by SMC of a majority stake in the railway project.

Zamora acquired majority control of the ULC consortium in 2008 from its original proponent, Israeli businessman Eli Levin.

Ang also revealed during the interview that they are also exploring a possible investment in the light rail transit project in Cebu, as well as other projects in Cagayan de Oro, Davao and Iloilo.

The STAR earlier reported that SMC is interested in building a bullet train railway that will run the Laoag-Manila-Bicol route.  Ang said they have commissioned a group that includes international companies with experience in bullet trains to study the possibility of building a bullet train railway that will run from the north to the south end of Luzon.

MRT 7 is a build-“gradual transfer”-operate, maintain and manage project for the development, financing, operation and maintenance of a 22-kilometer light rail transit route that extends from the MRT Line 3’s North Edsa terminal to San Jose del Monte, Bulacan.

ULC earlier said it has tapped Morgan Stanley as its financial advisor to raise equity and debt needed to finance the construction of the $1.3-billion project.

Aside from Zamora, other stakeholders in ULC include the SM Group of Companies, which plans to put up a mall in San Jose del Monte, Bulacan that will have access to the MRT 7 line.

SMC has been expanding from its core food and beverage business and into heavy industry such as power, infrastructure and telecommunications to fuel faster future growth.

The MRT 7 project involves the construction of a 22-km light rail transit system carrying at least half a million passengers a day.

The project also includes an intermodal transport terminal — a transportation hub for buses and other forms of public conveyances — in San Jose del Monte, as well as a 22-km, six-lane feeder highway from the northern end of the line to Bocaue, Bulacan. This highway will link the intermodal terminal to the North Luzon Expressway.

As envisioned by the proponents, the rail component of MRT 7 project will initially operate 108 rail cars in a three-car train configuration. Initial capacity is projected at 448,000 passengers a day, but will eventually be expanded to accommodate as many as 850,000 passengers daily.

The rail line will have 14 stations, namely: North EDSA, Quezon Memorial Circle, University Avenue, Tandang Sora, Don Antonio, Batasan, Manggahan, Doña Carmen, Regalado, Mindanao Avenue , Quirino, Sacred Heart, Tala and Araneta San Jose Del Monte.

The intermodal terminal, on the other hand, will be able to accommodate 60 buses and will also feature passenger facilities and amenities.

The entire project is expected to be fully completed in 42 months, although parts of it may be made operational in phases.

Once completed, ULC will operate and maintain the rail service, the intermodal terminal and the highway for a period of 25 years. The government will get a 30-percent share of net passenger revenues and a 20-percent share of other earnings.

The rail and road network is expected to cost as much as $1.3 billion, while the commercial and residential developments that are expected to rise along the route would cost another $2 billion.