National Devt Co. to acquire control of MRT operator
RUBY ANNE M. RUBIO, GMANews.TV
08/20/2009 | 11:17 PM
By October, the Philippine government’s investment arm will acquire roughly 80 percent of the Metro Rail Transit Corp. (MRTC), the company that runs the Metro Rail Transit-3.
The National Development Co. (NDC) will buy the combined 80 percent MRTC stake held by both the Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP), DBP president Reynaldo G. David said.
The MRTC may be re-privatized in a different shape or form, David said during a briefing held on Thursday.
“It cannot be anymore in the form of 15 percent internal rate of return (IRR) for 25 years or MRT bond. That is unconscionable. Today’s rates are totally different from 15 years ago," he told reporters.
IRR refers to the rate used to generate cash flow from an investment over a given period.
Refinancing debt is one of the ways being explored to renegotiate the build-lease-transfer agreement, officials said.
MRTC creditors and the two government-led banks can help NDC sell bonds to pay for old debts.
The MRT-3, which runs from North Avenue in Quezon City to Taft Avenue in Pasay City, has the highest ridership among light rail systems in Metro Manila. Some 485,066 passengers took the MRT-3 compared to LRT-1’s 397,765 and LRT-2’s 132,011.
The government intends to enhance operations since any improvement, extension, or expansion requires MRTC’s approval which was difficult to obtain in the past.
The government plans to close the loop, renegotiate the build-lease-transfer (BLT) agreement in terms of lower fees and buy 21 light rail vehicles.
Under the BLT agreement, the DOTC (Department of Transportation and Communication) will become the train system’s operator while the private sector is the investor.
However, outflows exceeded inflows for the government as the DOTC had to pay maintenance rental, equity rental, debt rental, operating and administrative costs.
Inflows came in the form of farebox revenues and share in development rights.
MRT 3 is not commercially viable at current fare levels.
For revenues to cover expenses, fares must be increased from an average of P12.50 to P60.50, David said. - GMANews.TV
The National Development Co. (NDC) will buy the combined 80 percent MRTC stake held by both the Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP), DBP president Reynaldo G. David said.
The MRTC may be re-privatized in a different shape or form, David said during a briefing held on Thursday.
“It cannot be anymore in the form of 15 percent internal rate of return (IRR) for 25 years or MRT bond. That is unconscionable. Today’s rates are totally different from 15 years ago," he told reporters.
IRR refers to the rate used to generate cash flow from an investment over a given period.
Refinancing debt is one of the ways being explored to renegotiate the build-lease-transfer agreement, officials said.
MRTC creditors and the two government-led banks can help NDC sell bonds to pay for old debts.
The MRT-3, which runs from North Avenue in Quezon City to Taft Avenue in Pasay City, has the highest ridership among light rail systems in Metro Manila. Some 485,066 passengers took the MRT-3 compared to LRT-1’s 397,765 and LRT-2’s 132,011.
The government intends to enhance operations since any improvement, extension, or expansion requires MRTC’s approval which was difficult to obtain in the past.
The government plans to close the loop, renegotiate the build-lease-transfer (BLT) agreement in terms of lower fees and buy 21 light rail vehicles.
Under the BLT agreement, the DOTC (Department of Transportation and Communication) will become the train system’s operator while the private sector is the investor.
However, outflows exceeded inflows for the government as the DOTC had to pay maintenance rental, equity rental, debt rental, operating and administrative costs.
Inflows came in the form of farebox revenues and share in development rights.
MRT 3 is not commercially viable at current fare levels.
For revenues to cover expenses, fares must be increased from an average of P12.50 to P60.50, David said. - GMANews.TV
