MANILA, Philippines - The government's plan to take full control of the Metro Rail Transit Line 3 (MRT-3) may cost it nearly $1 billion, Transport Secretary Joseph Emilio Abaya said Tuesday.
"The buyout was approved by the President and consented by the cabinet secretaries yesterday. No one objected to it. So in effect, it will be fully owned by the government. We need not seek consent from any private party when we expand the capacity of MRT3 then we can eventually bid out the O&M (operation and maintenance)," Abaya said in a press briefing.
He said the Finance department will handle the buyout and deal with state-owned banks Land Bank of the Philippines and the Development Bank of the Philippines, which own a collective 77% economic interest in the consortium that built the MRT-3. The remaining 23% interest is held by private shareholders.
"Basically, we will be buying out the bonds that's still in private hands. Government will actually cash out to DBP and LBP," Abaya explained.
"Likewise, the remaining shares out there-both economic and political-will be swept out. There will be no residual rights out there, it will be fully owned by the government," he continued.
The government's plan to take full control of the MRT-3 was announced by the Transport department in October. The plan is being pursued before bidding out an O&M contract for the system under the Aquino administration's public-private partnership program.