DOTC Secretary Jun Abaya's Department Order Has An Edge To Complete The MRT3 Buyout? #ExpertWriter

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.

Read More

MRT3 Buyout, A DOTC Strategy? #ExpertWriter

MRT3 Buyout, A DOTC Strategy? #ExpertWriter

The MRT3 is the lifeblood of every commuter along EDSA who sees it as their means of transportation for their daily existence. Their expectations for services render must be maximized for the common good. The Filipino people are the users of this train system who wanted comfortable and efficient operations and management. Upgrading the MRT3 train system for development is clearly visible for government to continue the hassles of the past.

The buyout for MRT3 evolved from DOTC Secretary Jun Abaya for the last months when the dilapidated relation of the government to MRT Holdings and MRTC are vanished despite the fact that MRTC’s Bob Sobrepena’s interview with a famous media network. Senate hearing ensued and both parties lay down their cards for the Senate and the Filipino people to clearly understand the background of the case; likewise, the train system breakdowns and the drama of the maintenance provider.

MRT3 buyout by the government seems to be the option at hand ever since?

The DOTC’s only pretending to buy MRTC but they're just buying 27 billion worth of bonds to complete the 100% ownership. The government is waiting for the 2015 budget of 54 billion to process the same.

The DOTC said earlier that modernizing and upgrading MRT-3 are critical to improve the services to passengers in terms of both safety and convenience, formed a transition team composed of engineers and staff of the MRT-3 Office and the Light Rail Transit Authority (LRTA) to closely monitor and assist maintenance work on the MRT-3 system. The move is intended to give government a direct role in ensuring that safety requirements are met and protocols are properly followed on a daily basis in the interest of the riding public.

The APT Global, DOTC Maintenance Provider said, received 1.4 million USD per month supposedly with spare parts. But actually the DOTC is not providing the spare parts to us. It’s been dragging the problems to a more extreme ways until next year during the budget approval.

Major upgrades that are already underway are the addition of 48 brand new train cars and the automation of the railway ticketing system. The new train cars will increase passenger capacity by 66 percent. This means that the current three-car configuration will be made into four-car sets, and that trains will arrive at 2.5-minute intervals instead of the current three minutes. The prototype unit of the new train cars will be tested on the system by August 2015, and once approved, three to four new units will be delivered every month thereafter. While complete delivery of the 48 train cars will be only accomplished in December 2016, each monthly delivery will already afford partial relief to riders.

As such, really, the government wanted an MRT3 buyout for complete operations and management? But they cannot do that without the MRTC approvals. So, the government needs the 2015 budget to buy bonds to complete the 100% ownership of MRT3.

The Department of Transportation and Communications (DOTC) said, Metro Rail Transit Line 3 (MRT-3) Equity Value BuyOut (EVBO) may be expected to take place in the first week of January 2015.

A compromise agreement with MRTC is a must for this purpose and the process of completing the EVBO would have to be agreed on by the Office of the Solicitor General, Landbank, Development Bank of the Philippines, and the DOTC.

The The Department of Transportation and Communications DOTC Secretary is firm when he said, “As long as there is no change in policy, there is an EO (Executive Order) to execute the EVBO. The government’s long-term plan for the MRT-3 is to implement the equity value buy-out of the system’s private-sector owner Metro Rail Transit Corp. (MRTC) as provided for in the Build-Lease-Transfer (BLT) Concession Agreement. Under Executive Order No. 167 s. 2013, the DOTC and the Department of Finance (DOF) are tasked to implement the EVBO to put an end to an ongoing arbitration case in Singapore between the DOTC and the MRTC. The EVBO will terminate the Concession Agreement and transfer ownership of the MRT-3 to the government, saving billions of pesos in equity rental payments paid annually to MRTC by the government. What is critical is the 2015 budget, because the P54 billion (the amounted needed for the EVBO) is in 2015’s budget. If the budget is passed it is in there so we could expect it to roll in the first week of January 2015. The BLT provides for a formula on how to execute the EVBO so there is no room for negotiations. We are buying everything out. The bonds, the remaining equity interest in private hands. The objective at the end of the day is 100 percent government control.”

Therefore, the DOTC was rolling its strategies for MRT3 thing while aiming for the 2015 budget to completely control the bonds. They’re very positive about 54 billion to actually give them the edge over the MRT Holdings. The bonds will create them to fully utilize every transaction without the approval of MRTC, which in turn could hinder to DOTC plans.

Watch this video for complete information behind the DOTC and MRTC relationship

Read More