Dec 062014

The Senate is effectively aborting the planned government takeover of the breakdown-prone Metro Rail Transit (MRT) 3 next year.

Senators are insisting on their decision to take out the P53.9-billion appropriation in the proposed P2.606-trillion 2015 national budget for the buyout plan even if the House of Representatives would insist on retaining it.

Ayaw kong magsalita ng patapos, but definitely we will not restore the whole amount. As of now, we just retained P6 billion out of the P53.9 billion in the approved Senate version,” Senate finance committee chairman Francis Escudero said yesterday.

Escudero was responding to a question from The STAR if the Senate’s deletion of the MRT-3 buyout funding was non-negotiable.

He said the P6 billion they kept in the budget “is for payment of taxes under the BOT (build-operate-transfer) contract (with investors), which is one of the components of the MRT buyout plan.”

He informed congressmen of the Senate’s decision to scrap funding for the planned government takeover of the rail system during the bicameral conference committee on the 2015 budget last Thursday.

Asked if the House would fight for its decision to fund the buyout plan, Escudero’s counterpart, Rep. Isidro Ungab of Davao City, appropriations committee chairman, said his panel still has to discuss the matter.

The conference committee will convene again tomorrow to agree on the proposed changes in the 2015 budget and possibly vote on the measure.

Escudero said senators do not believe that the buyout plan, if it pushes through, would solve the problems plaguing the MRT-3.

He said the P53.9 billion would just go to two state banks holding 80 percent of bonds sold by MRT Corp. (MRTC), the owner of the EDSA rail line, and none to its maintenance and private investors.

A buyout would also not stop lawsuits against the government, the senator said.

Isabela Rep. Rodolfo Albano III, one of the minority members in the conference committee on the 2015 budget, said the net effect of the Senate decision to deny funding for the buyout plan is that such takeover would not push through.

“The plan will be derailed because the government will not have the necessary funds for it,” he said.

Albano suggested that the P54 billion be appropriated to jumpstart the Metro Manila subway project as recommended by the Japan International Cooperation Agency.

He said the senators could not just block the government’s solution to MRT-3 woes without offering alternatives.

The lawmaker pointed out that as long as such problems persist, the safety of the more than 600,000 MRT-3 commuters daily would be in peril.

The  STAR tried to get the reaction of Transportation and Communications Secretary Joseph Emilio Abaya on the Senate’s scrapping of the buyout funding, but he did respond to a text message.

Based on the funding details he submitted to the Ungab committee, the government would need $1.172 billion (equivalent to P53.9 billion) to pay off MRT-3 investors.

The two biggest MRT-3 investors are Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP), which have majority representation in the MRTC board, including the board chairman.

Abaya placed the value of the two banks’ exposure at $619.1 million, plus a “return” of $312 million for a total of $931.1 million.

He valued “non-DBP/LBP investments” at $95.8 million. Abaya’s funding request also included $143 million for taxes and $2 million for legal fees.

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