Bayan to PNoy: Cancel MRT contract, take over train system
September 10, 2014 | 9:42am
MANILA, Philippines - Militant group Bayan on Wednesday said the government should cancel the build-lease-transfer (BLT) agreement and take over the maintenance, operations and ownership of the Metro Rail Transit (MRT) 3 system.
The move will enable the government to upgrade the system and expand capacity, Bayan added.
Bayan also hit the Department of Transportation and Communication's planned Equity Value Buy-Out wherein government will shell out P53 billion to acquire the MRT, but with the direction of re-privatizing the train’s operations and maintenance afterwards.
“The way out is indeed the government take over of the MRT. However, what the Aquino government plans does not make sense because it wants to re-privatize the train system. Why will taxpayers spend P53 billion for the equity buy out, and another P9.7 billion for systems upgrade, only to have the train line re-privatized? We will be spending billions so that private companies can profit again from the train line? That’s just plain stupid,” Bayan Secretary General Renato Reyes Jr. said.
“And if this buy-out and re-privatization is being rushed before 2016, we can only suspect that some quarters are again out to take advantage of the negotiations to advance their vested interests. It smells fishy to us,” he added.
Reyes said that the original BLT contract was so onerous that it put the government deep in debt.
"The original MRT3 investors such as Fil-Estate of the Soberpena group, Ayala Land, and Anglo Phil only invested $190 million from 1995 to 1997, while the the rest of the financing came from loans paid for the by the government. Yet the investors were given a 15 percent return on their investment for 25 years. They invested $190 million yet they stand to earn $2.4 billion for the duration of the contract,” Reyes said.
“Taxpayers have already paid $488 million in bank loans as of 2010 and some $799 million in equity rental payments to the private investors as of 2013. We have been carrying the financial burden as well as the extreme public inconvenience of a dilapidated system, while the big banks and private investors are reaping the profits,” he added.
He also said that government had an inter-agency review of the contract as far back as 2011 due to these onerous provisions but the full results of the review have not been made public.
He said that the outrageous part is that the private investors seem unconvinced with the P53-billion buy-out and will likely be seeking more money from the state.
“That the private investors say P53 billion for the buy-out is not enough is proof that they are indeed insatiable when it comes to profits. We have already paid them more than 400 percent their original investment, through terms patently unjust, yet they still ask for more,” Reyes said.
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