MANILA, Philippines - Ayala Corp. (AC) is eyeing a comeback in Metro Rail Transit (MRT) Line 3, forging a three-way battle with other conglomerates Metro Pacific Corp. and San Miguel Corp. for the right to operate the train system traversing a huge stretch of the bustling Epifanio de los Santos Ave. (EDSA).
In an interview, Antonino T. Aquino, president of AC’s listed property arm Ayala Land Inc., said the parent firm is interested in the expansion or operation of MRT 3 as it seeks to explore various opportunities in the infrastructure sector.
“We are awaiting the government’s decision on MRT 3, whether they would bid it out or not,” he said.
AC, which has businesses in real estate, banking, manufacturing and telecommunications, has been keen on diversifying into power and participating in infrastructure projects the government may bid out.
If successful, this would signal the return of the Ayala Group in the mass railway system, which runs from North Avenue in Quezon City to Taft Ave. in Pasay City. The Ayala Group was one of the original members of the consortium behind MRT Corp. which was awarded the original contract on the MRT 3 project in the late 1990s.
AC and other consortium members, however, opted to sell out after the government decided to securitize the railway system’s future cash flows to bondholders.
State-run banks Development Bank of the Philippines and Land Bank of the Philippines eventually bought the bonds from investors.
MPIC, the local flagship of Hong Kong-based conglomerate First Pacific Co. Ltd., last year offered $1.1 billion to acquire the government’s stake in the company operating MRT 3. It acquired an initial minority stake in the project from the Sobrepeña-led Fil-Estate Group.
Not to be outdone, San Miguel, which has been aggressively diversifying away from food and drinks, had also submitted a proposal to the Department of Transportation and Communications (DOTC) for the expansion of the capacity of the MRT 3.
The Aquino government, which is seeking help from the private sector to fast track the construction and upgrade of infrastructure, however, is still reviewing the offers made by both San Miguel and MPIC and is likewise considering spending for the rehabilitation of the railway system itself. The expansion would entail an investment of P4.5 billion to P6.3 billion to buy new 26 new trains to boost the aging railway line’s current capacity of half a million passengers daily.
Analysts said a modern, fast and reliable railway system will help plug human congestion and further fuel the domestic economy.
Big corporations, particularly real estate developers, are keen on investing in transportation infrastructure as this would increase demand and value of their properties.