MRT operator starts arbitration vs gov't in Singapore

MANILA, Philippines - The Metro Rail Transit Corp. (MRTC), owner of MRT-3, Wednesday said it has started arbitration proceedings against the Department of Transportation and Communications (DOTC) before the Singapore International Arbitration Centre.

MRT Holdings (MRTH) spokesman David Narvasa said a notice of arbitration has already been given to the DOTC on January 21, 2014.

The dispute stemmed from the DOTC's decision to purchase 48 light rail vehicles (LRVs) from CNR Dalian Locomotive & Rolling Stock Co. (CNR Dalian) as part of the MRT-3 capacity expansion project despite an existing build-lease-transfer agreement with MRTC, which remains valid until 2025.

"The timetable will depend on how soon the arbitration tribunal can be constituted in Singapore. That is why the petition before the Makati regional trial court needed to be filed for interim relief," Narvasa said in a statement,

Makati RTC Branch 66 Presiding Judge Joselito Villarosa earlier granted MRTC's prayer for a 20-day temporary order of protection to stop the DOTC.

"The main action is the arbitration case in Singapore. The arbitration case in Singapore will determine who has the rights to capacity expansion for the MRT-3." Narvasa added.

In the hearing on February 13 at the Makati RTC Branch 66 for MRTC's petition for an injunction on the move of the DOTC to buy 48 LRVs from CNR Dalian, former MRTC chairman Robert John Sobrepeña testified that the MRTC has submitted proposals to the DOTC to buy brand new LRVs in 2000, 2004 and 2008.

"Our agreement with the DOTC was to supply brand new trains," Sobrepeña told the court. He added that the MRTC proposal to buy new trains was approved in 2000 by the National Economic Development Authority (NEDA).

However, Sobrepeña said government wanted a "triggering event" for the purchase of new LRVs to push through.

Sobrepeña said the "triggering effect" was for the MRT to reach a daily riding capacity of 350,000. That figure was reached and reported by the DOTC in 2000.

Sobrepeña said the MRTC again proposed to buy additional LRVs in 2004.

"We renewed the offer and to also improve the system to allow for new trains to come in," he said.

Sobrepeña said the DOTC agreed and even formed a technical working team to study the MRTc's offer.

However, Sobrepeña said the idea of purchasing second hand trains was floated by the DOTC and the House Transportation Committee.

"That did not come from us but from the DOTC. I was not in favor. What we want were brand new trains," he said.

Sobrepeña told the court that in 2008, the DOTC became delayed in its lease payments to the MRTC, forcing the MRTC board to focus on the lease collection and not on line expansion.

In 2008, the MRTC and the DOTC then agreed to solve the collection issue by arbitration in Singapore.

"We offered brand-new trains for expansion. That offer is still pending but the reply of the DOTC was to supply second-hand trains," Sobrepeña said.

Sobrepeña however stressed that MRTC is still open for negotiations with the government for the purchase of brand new LRVs for the MRT3 system.

The MRTC earlier filed a petition with the Makati RTC Branch 66 to stop the DOTC's plan to buy 48 LRVs from the CNR Dalian Locomotive & Rolling Stock Co. of China, which it says is in violation of the existing build-lease-transfer agreement entered between the DOTC and MRTC on August 8, 1997.

Makati Regional Trial Court Branch 66 Judge Joselito Villarosa earlier granted MRTC's petition for preliminary injunction with a 20-day temporary order of protection to stop the DOTC.