MRTC hits DOTC for giving MRT trains contract to Chinese firm


Posted at Feb 07 2014 07:12 PM | Updated as of Feb 08 2014 03:12 AM

MANILA, Philippines - The Metro Rail Transit Corp. (MRTC), which owns the assets of the MRT-3, hit the Department of Transportation and Communications (DOTC) for awarding a P3.8 billion contract for new trains to a Chinese company.

MRT Holdings said the DOTC did not respect the owner's rights under the MRT build-lease-transfer agreement, which gives them the right to supply trains for the MRT-3.

"The fact that DOTC awarded the additional trains to a Chinese supplier without the express approval of the owners of the MRT-3 system as per their agreements with DOTC and without following any PPP principles is therefore without legal basis. This is also a concern of MRT Holdings. How can DOTC use public funds, taxpayer money, to pay for trains that will be used by a privately owned company for its MRT-3 system," MRTC said.

Last month, the DOTC awarded the capacity expansion contract to Dalian Locomotive & Rolling Stock Co., CNR Group of China, which would pave the way for the acquisition of 48 new trains.

MRTC said it had proposed to provide additional trains for the MRT at no additional cost to the government.

"Such a proposal was made to DOTC a few years ago. If the DOTC were really in a rush to put trains, why haven't they acted on the proposal of the private sector to supply trains at private sector's exclusive cost. This proposal includes running the operations of the MRT3 system to replace the inefficient DOTC, which is causing government to subsidize billions every year," the company said.

Metro Pacific Investments Corp. has a 48% stake in MRTC. In November 2010, it entered into a cooperation agreement with the Sobrepena-led Fil-Estate Corp. for its interests and rights in Metro Rail Holdings Inc., Metro Rail Transit 2 Inc., and Monumento Rail Transit Corp.

"The owner shareholders of the MRTC are able and willing to undertake the capacity expansion program as stipulated in its existing agreements with DOTC which remains valid until 2025. MRT Holdings has asked the Court for the Injunction with TRO to remain valid until resolution of its Petition for Arbitration which shall be immediately filed under International laws in Singapore," MRTC said.

Makati City RTC Branch 66 presiding judge Joselito Villarosa had granted the petition of MRTC and Metro Rail Transit Holdings Inc. II to stop the DOTC from implementing the MRT-3 capacity expansion project.

On Friday, the court moved the hearing for the case  to February 13, as the DOTC did not file their response to the court's order.

Meanwhile, the DOTC said it is ready to defend its position in court.

"We are ready to defend our position in court. The government has its rights, too, as well as the obligation to fight for the interest of the riding public," DOTC spokesman Michael Sagcal said.

He noted President Aquino issued Executive Order No. 855 in 2013, authorizing the DOTC and the Department of Finance to implement the equity value buy-out of MRTC.