2015 Budget For MRT3 Buyout? #PublishingArticles

2015 Budget For MRT3 Buyout? #PublishingArticles

The saga of MRT3 continues to roll its twists and turns wherein the DOTC is very much positive about the buyout. It’s very clear that even before the DOTC’s playing game as part of the strategy. This buyout thing surfaced again when the 2015 budget is fast approaching for approval.

What happened in the past is only the prologue of the story in which the government played its role so well. Defended their stand with ease and effectively wrangled its flaws.

The DOTC is pretending this buyout or buying ample time up to the point where they could buy the remaining bonds of the private counterpart, the MRTC?

“We are buying everything out, including the bonds and the remaining equity interest in private hands. The objective, at the end of the day, is for the government to own 100 percent of the line. The equity value buyout of the Metro Rail System-3 (MRT-3) will push through in 2015 as far as government is concerned, according to The Department of Transportation and Communications DOTC Secretary Jun Abaya.

It’s very clear that the government is buying time for this MRT3 drama, which constitutes of buying bonds to complete the buyout next January 2015? And, it will materialize after the approval of 2015 budget?

The controlling factor is critical because the P54 billion is earmarked for 2015. If the budget is passed, surely expect the takeover to roll in the first week of January 2015.

This MRT3 buyout is just a strategy of the government to buy the remaining bonds of 20% of the MRTC that could complete the ownership, management and operations of the MRT3 train system; a government takeover of the entire MRT3 facility.

The MRT3 is owned by MRT Corporation (MRTC) and is operated by government as part of the system’s original build-lease-transfer (BLT) agreement.

Entering into a compromise contract would effectively end the ongoing arbitration case in Singapore. The case was lodged against the government in 2008 due to its failure, as the operator of the line, to pay billions of rentals payment to the owner of the rail system.

There must be compromise agreement between the DOTC and MRTC that could be done within this year. They must agree with the terms of the acquisition, which includes the price of the takeover. The DOTC must initiate this meeting to seal the buyout.

Likewise, if the MRTC do not want to sell the remaining bonds to DOTC as per compromise agreement between the two parties?

Secretary Abaya said, “Buying out the rail system will allow government to make decisions without the interference of the private sector. The buyout will no longer be negotiable, citing the build-lease-transfer agreement between government and MRTC that specifies a formula on how to compute an equity value buyout. No negotiations, the formula is fixed, we will execute.”

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