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Tuesday, December 23, 2014

It has been noted to all concerned leaders, media people, news companies and citizens of the Philippines, that for the past months, Secretary Emilio Abaya was very much alive with his planned strategies on how to tackled MRT3 problems and continued to move forward with his leadership for the good of the commuters. While at the same time, never had a wink of giving MRT Holdings its proposition for business unification. Even the Senate cannot twisted his firmed ways to solve this gigantic problem of the MRT3 drama that buyout was the only option.

Is he on track with his move? The Pnoy Administration’s truly involved and believed the same way as he did. Moreover, he has the support for this MRT3 endeavor all along.

The Department of Transportation and Communication’s Secretary Joseph Emilio Abaya issued Department Order No 2014-014 setting the new fares for the three mass train system in Metro Manila; MRT3, LRT-1 and LRT-2. “It’s a tough decision, but it had to be made. It’s been several years since an increase was proposed. We delayed its implementation one last time until after the Christmas season. While 2015 will see increased fares, it will also see marked improvements in our LRT and MRT services. The Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya has decided to adopt a uniform distance-based fare scheme for MRT-3 as well as LRT-1 and LRT-2 pursuant to the Medium-Term Philippine Development Plan. It is envisioned that this fare scheme will result in an equitable distribution of government funds currently dedicated to subsidizing the operations of the above rail lines in Metro Manila to much-needed development projects and relief operations in other parts of Luzon, the Visayas and Mindanao.”

DOTC Secretary Jun Abaya’s Department Order made a gigantic response from every sector of the Philippine society. It created much disappointment to some opposition leaders, train commuters, some Senators and even ordinary Filipino citizens. It has its own way of surprising concerned people while maintaining his stand about the issue. He downplayed the MTR audit team’s warning, stressing that government is addressing the issue on worn out rail tracks and scarcity of spare rails, “We’re not just sitting down on the issue of rails, we are addressing it. We have procured rails, and in fact we are doing more than what MTR is suggesting by replacing 6 kilometers of rails instead of the 1.2 kilometers they suggested.” The DOTC has allotted P81.5 million to procure 608 pieces of new 12-meter steel rails for MRT 3. Pending the awarding of the contract and the supply of the new rails, the MRT 3 is borrowing spare rails from the LRT 2 due to its depleted stocks of spare rails. Aside from the rail replacement, the government is also procuring a new maintenance contractor for the MRT 3 line. The DOTC has recently increased the approved budget for the three-year MRT 3 maintenance contract to P2.4 billion from P2.2 billion allocated during the failed first bidding. The new maintenance provider will be the one to replace worn out rails with new ones.

What could be the utmost solution for MRT3 train system; management and operations, when the DOTC Secretary himself moved to increase fares and showed that the government can handle, maintain, monitor and develop the MRT3 –EDSA?

Likewise, the government should create more trusted actions to alleviate the disappointment at present before implementing the fare increase next month. It’s more than doing things right than to do things to iron-out past mistakes.

Therefore, an added action plan and strategies to be developed and maintained by the DOTC in instilling the public trust. It’s not only the leadership, not only the MRT3, but all mass transportation of the country.

Monday, December 8, 2014

The DOTC wanted the MRT3 buyout through the 54 billion pesos of 2015 budget, but is confused on what to do about MRT3? Or worse, purposely confusing the public for some ulterior motive we can only imagine to happen?

The P54 billion DOTC wants would not buy out the original private owners as DOTC officials are publicly claiming. That large sum of money will only redeem MRT bonds now being held by GFIs. In other words, they would just move money from one government pocket to the other, something they are already doing now with the lease payments.

In the past months, Secretary of DOTC Jun Abaya had so many announcements for this buyout. He even declared the greatest confidence in completing this buyout when the 2015 budget’s released. 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. He 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. His funding request also included $143 million for taxes and $2 million for legal fees.

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

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

A buyout would also not stop lawsuits against the government and 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. The P54 billion be appropriated to jumpstart the Metro Manila subway project as recommended by the Japan International Cooperation Agency.

The senators could not just block the government’s solution to MRT-3 woes without offering alternatives and as long as such problems persist, the safety of the more than 600,000 MRT-3 commuters daily would be in peril.

Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya has been saying that buying out the owners of MRT3 to the tune of P54 billion is necessary to start the rehabilitation of the system. He called that process Equity Value Buyout or EVBO which is provided for in the contract. First of all, the EVBO is a remedy available only to MRTC and would require DOTC to be in breach of agreements and go into default. A default on the part of government would affect the country’s credit rating and should not be resorted to lightly.

DOTC Secretary Joseph Emilio Abaya on the Senate’s scrapping of the buyout fund? He would face the Senate and the MRT Holdings to facilitate his goals for this MRT3 buyout. Given more reasons why they needed the 54 billion pesos is not enough to uplift the MRT3-EDSA train development and operations. It will only be paid to the two banks but cannot be for the whole improvement.

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