In a recent turn of events, the Department of Transportation and Communications (DOTC) announced that they are expecting to purchase the privately-owned equity shares of the Metro Rail Transit Corporation (MRTC) via the Equity Value BuyOut (EVBO) in the first week of January 2015.
This initiation was expressed by DOTC Secretary Joseph Emilio Abaya wherein the government aims to get in full control of the operations and management of the MRT 3.
The long-term plan of the government for the MRT-3 is to implement the equity value buy-out (EVBO) 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 Department of Transportation and Communications (DOTC) and the Department of Finance (DOF) are tasked to implement the EVBO to finally end the negotiation between the DOTC and the MRTC.
However, if we look into the issue deeper, this MRT buyout plan of the government can be a really big problem. Secretary Jun Abaya expressed that the government is buying everything out, from the bonds to the remaining equity interest in private hands. The government allotted P54 billion ($1.25 billion) for the buyout. This amount was included in the P2.26-trillion ($50.45-billion) national budget for 2015. And if ever the budget for 2015 will be passed, the takeover can be in effect as early as the first week of January that same year.
But, isn’t P54 billion a huge amount considering that it will be taken from the 2015 national budget? When you come to think of it, as Quezon City Congressman at House Committee on Metro Manila Development Chairman Winston Castelo mentioned, why not take the P54 billion and use it for other projects instead? Projects that could actually solve the traffic jam problem within the metro. Plus, a huge factor is that the government does not even have a proper plan laid out as to what they are going to do after the buyout.
Another case we can look at is that perhaps DOTC is just buying P27 billion worth of bonds that they already own but pretends to buy MRTC so that they can use the P54 billion allocated amount for the project for their own greed.
This issue is still ongoing and we are yet to get answers from DOTC and MRTC. But I am firm on my stance, the MRT buyout should not happen as it might lead to another endless case of corruption.
What do you think?