Makati court stops MRT 3 expansion project

MANILA, Philippines - The Makati City regional trial court has stopped the Department of Transportation and Communications (DOTC) from acquiring 48 brand new trains for the Metro Rail Transit 3 (MRT3) to expand the rail system’s capacity.

In a two-page order, Makati City RTC Branch 66 Presiding Judge Joselito Villarosa granted the petition of Metro Rail Transit  Corp. and MRTC Limited (MRTCL) by issuing a 20-day temporary restraining order against the DOTC.

The order bars the DOTC from implementing a contract awarded to CNR Dalian Locomotive & Rolling Stock Co. of China involving the purchase of 48 brand new light rail vehicles.

“Wherefore, premises considered, the ex-parte application for a 20-day temporary order of protection is hereby granted upon the filing of the bond within five days from issuance of this order, in the amount of P300 million to answer for all damages which respondent may sustain by reason of the TRO if the court should finally decide that the petitioner was not entitled thereto,” Villarosa said in the decision.

The MRTCL entered into a build-lease-transfer agreement with the DOTC in 1999 to construct and maintain a light rail transit system for EDSA, eventually known as MRT-3.

“Respondent (DOTC), its officials, employees, agents or any person acting in their behalf are hereby restrained from performing any and all acts related in any manner to its procurement of additional LRVs for the MRT3 and from committing any act tending to usurp and to violate the rights of MRTC under . . . the BLT agreement,” he added.

Villarosa underscored that among the rights assigned to MRTCL and MRTC under the BLT agreement was a provision in paragraph 5.2 that it would only lose its preferential right to supply light rail vehicles if the MRTC is in breach of its obligation under the BLT Agreement or if it consents to DOTC’s use of light rail vehicles which were not provided by MRTC.

However, DOTC awarded the capacity expansion contract to Dalian last month, despite its prior BLT agreement.

After painstaking and assiduous perusal of the records of the case, the judge said the court found that there is an urgent need to preserve property, prevent the DOTC from disposing of, or concealing, the property, and prevent the relief prayed for by the complainant.

“The court finds that the reasons given by the petitioners are meritorious. The Court hinges its ruling on the fact that petitioners have neither breached their obligation under the agreement or much more gave its consent to the DOTC pursuant to section 5.2 of their agreement,” Villarosa said.

The lower court gave DOTC 15 days to file a comment to the order and the petition.

Through an unsolicited proposal, MRTC offered to spend $300 million to expand the capacity of MRT3 and another $350 million to acquire equity and bonds issued by MRTC.

Manuel Pangilinan-led MPIC has a 48 percent interest in MRTC after it entered into cooperation agreement with the Sobrepena-owned Fil-Estate Corp. in November 2010 regarding its interests and rights in Metro Rail Holdings Inc., Metro Rail Transit 2 Inc., and Monumento Rail Transit Corp.

On the other hand, government financial institutions Land Bank of the Philippines and Development Bank of the Philippines (DBP) control an 80 percent interest but have no voting rights in the company.

Michael Arthur Sagcal, DOTC spokesperson, said in a text message to reporters that the agency would review the petition filed by MRTC as well as the decision of the Makati City RTC.

“Our legal department is now reviewing it, but we are ready to explain our position on adding MRT coaches for the benefit of its riders,” Sagcal stressed.

The acquisition of new trains would help alleviate the sufferings of the commuting public as the mass transit system along the congested EDSA is now serving close to 600,000 passengers per day or almost double the original designed capacity of 350,000.