MRT used P1-B college plan money - Paras

An administration congressman claimed yesterday that a company running the Metro Rail Transit project along EDSA had to borrow P1 billion from the College Assurance Plan to meet MRT's financial requirements.

"There is a need to inquire into allegations that Fil-Estate Corp., a Sobrepeña company, in order to finance MRT's needs, had to borrow P1 billion from CAP (College Assurance Plan), another Sobrepeña company, thereby endangering the future of the beneficiaries and policy holders of CAP," said Rep. Jacinto Paras (LAMP, Negros Oriental).

Paras filed Resolution 1244 asking the proper House committee to conduct the inquiry.

He said CAP, a pre-need company which is supposed to hold its funds in trust for its subscribers, should invest the money in the most stable and risk-free instruments.

He said most loans obtained by the builder of the MRT project were guaranteed by the government, but that he did not know if the P1 billion CAP loan received any state guarantee.

Fil-Estate, which is headed by Robert John Sobrepeña, leads the consortium that is building and operating the MRT project. The other consortium members are Ayala Land, Anglo-Philippines Holding Corp., Greenfield Development Corp., Allante Realty, DBH Corp., and Ramcar, Inc.

CAP, on the other hand, is headed by Sobrepeña's lawyer-father Enrique. It is the 146th on the Securities and Exchange Commission's list of top 5,000 corporations.

As of August 1999, CAP's trust funds amounted to P6.4 billion. Total benefit payments reached P279.3 million.

The pre-need firm has 2,840 pensioners and 59,580 scholars.

Paras said the government is considering a renegotiation of the terms for the operation of the MRT.

He said under the contract the Ramos administration entered into with the MRT builder-operator, the Fil-Estate-led consortium is assured of a P100 million payment annually for 25 years, "or a staggering P101 billion."

Paras added the operator has a commitment to transport at least 400,000 commuters daily, but that it is only averaging 40,000 commuters since it began operation last Dec. 15.