Japan's Sumitomo offers to rehabilitate MRT-3

by Caroline Howard, ANC

Posted at Dec 01 2014 01:13 PM | Updated as of Dec 02 2014 01:58 AM

MANILA, Philippines - Japan's Sumitomo Corp. is willing to come back as the maintenance provider of the MRT-3 on the condition it will be tasked to also rehabilitate the railway system.

MRT Holdings chairman Robert Sobrepeña said this was the only condition Sumitomo gave when he convinced the Japanese company to fix the sorry state of the railway system.

Government took Sumitomo out of the project in 2012.

"They refuse to come back unless they do the rehab themselves... They assume full responsibility because they designed it, they built the rail system for us, maintained it under a full guarantee so that puts it back to them. That's the biggest thing we lost when government terminated the contract and appointed a local provider," he told ANC.

Sumitomo's proposal involves rehabilitating the railway system over an 18-month period at an estimated cost of $97 million.

Sobrepeña said the private sector can also help raise the money for the rehabilitation under the build-operate-transfer scheme.

"They (Sumitomo) estimated that it would cost $97 million for a complete rehab for the whole railway system, the tracks, everything, including 73 cars," he said.

"In that 18 months, they would be maintaining and overhauling the system. That's the Sumitomo proposal. For the private sector, we're even willing to raise the money for them. It doesn't even have to come from the government. The private sector can can raise the money under existing agreements and we'll fund, they'll fix it and Sumitomo goes back under single point of responsibility."

Sobrepeña insisted MRT didn't have major maintenance problems under Sumitomo because the company had excess spare parts that were good for six months.

Under Sumitomo, he added, any faulty parts can immediately be replaced, unlike current maintenance provider APT Global.

"The local maintenance provider has not been putting parts in. They have not been replacing the rails. They have not been grinding the rails and putting the parts necessary to maintain a system that is in the mid-life... At the time of Sumitomo, 60 percent of the budget went to spare parts and now that's not being done," he said.

Sobrepeña insisted it's better for the government to choose Sumitomo over Chinese train maker Dalian, whose experience is with locomotive trains run run by diesel and not light trains driven by power.

"We don't have 48 cars or LRVs coming next year. A prototype is coming next year. And that's one of the things we objected to, is that Dalian company has never made such a vehicle... So this is a guinea pig for them," he said.

However, the final decision is still up to the Department of Transportation and Communications.

But with public safety at stake, Sobrepeña said the government should not take its chances.

"We wrote 17 letters to them objecting to it, raising the question of safety... A week ago I asked for an appointment with Secretary Abaya so we could discuss how to improve the system," he said.

But until now, it's still a waiting game if the government will accept the proposal.