MRT contractor denies it owes DOTC P1 billion in development rights

MANILA, Philippines - The Metro Rail Transit Development Corp. (MRT Devco) denied that it owes the Department of Transportation and Communications (DOTC) more than P1 billion in unpaid development rights payments (DRP), saying that it has even made overpayments to the DOTC of almost P65 million.

Arnold Laigo, MRT Devco assistant vice president, said their firm has been making full payments to the DOTC in connection with its development rights on developed spaces in the EDSA-bound rail line.

Laigo explained that the DRP pertains to payments due to DOTC for it to avail of development rights over “developable” portions of the rail line.

He said that the DOTC has no right or authority to claim payment on the undeveloped airspace above the stations of MRT since the development rights to undeveloped airspaces were automatically forfeited to DOTC as of July 15.

“MRT Devco also informed DOTC that the automatic forfeiture is provided under the build-lease-transfer agreement and what was forfeited is the right to develop the airspace above the said stations,” Laigo said.

Laigo issued the statement in reaction to a STAR report that the DOTC had sent a demand letter to MRT Devco for the payment of an alleged outstanding obligation of P1,009,727,506.94, for its alleged failure to make any monthly amortization for the DRP to the DOTC since 2005.

The report was based on a June 22, 2010 demand letter issued by DOTC Assistant Secretary for administrative and legal affairs Raquel Desiderio to MRT Devco.

“MRT Devco is very much willing and looking forward to work with the new administration, specifically with DOTC Secretary Jose de Jesus, known for his credibility and integrity,” Laigo said.

Laigo said reports of its alleged debt to DOTC was being aired by detractors who want to destroy its relationship with the new administration since MRT Devco still has other development rights over the MRT systems.

MRT Devco is pursuing a move to take over the control and the sale of advertising rights over MRT airspaces from out-of-home media firm Trackworks, claiming that the latter had failed to fulfill contractual obligations stipulated in the exclusive advertising contract the two forged several years ago.

Laigo also clarified that its chairman, Robert John Sobrepena, is not the owner of College Assurance Plan. “He has never owned majority stake in CAP nor is he the owner of the company. In fact, he is no longer a member of the board of directors thereof since June 15, 2009,” he said.

He said the issues involving CAP and MRT Devco are separate and distinct. 

The MRT was built by the MRT Devco, a consortium led by the Sobrepena family-owned Fil-Estate Management Inc., at a cost of $665 million from reportedly borrowed funds, all guaranteed by the national government.