P54-B for MRT-3 buy-out most likely to be slashed from DOTC 2015 budget – Chiz

By Office of Senator Chiz Escudero
October 20, 2014

PASAY CITY – The Department of Transportation and Communications’ (DOTC) plan to buy out the Metro Rail Transit 3 (MRT 3) for almost P54 billion is unprogrammed and is not reflected in the 2015 General Appropriations Act (GAA), Senator Chiz Escudero said.

Escudero, chairman of the Senate Committee on Finance, said the P54 billion which the DOTC has set aside for the takeover of the MRT 3 will be sourced from a loan, and not from the national treasury.

“That amount which was authorized by DOF (Department of Finance) Secretary Cesar Purisima to effect the MRT 3 buyout is actually a loan. Thus, although it is unprogrammed once the loan has been signed, it will reflect in the GAA and the DOTC is apparently to push through with the buyout,” Escudero said.

He, however, said he is most likely to slash the amount from the GAA or realign it to more essential services for the general public like the much needed infrastructure to ease traffic congestion and disaster preparedness programs.

“While it is true that we need to improve our mass transport system, I have not been convinced by the DOTC that a takeover with a very high price tag is what we need at this time. One, that P54 billion is not enough as MRTH (Metro Rail Transit Holdings) said the equity value buyout amounts to P112 billion. Where did DOTC get that figure? Who did they talk to?” Escudero said.

The senator said the amount DOTC is appropriating as opposed to MRTH’s asking price is worthless and might just go to waste. “Even DOTC Secretary Abaya said in the hearings that even after they take over MRT 3, the only upshot is better terms for the government when it bids out the operation and maintenance. The DOTC can bid that out now without shelling out P54 billion of taxpayer’s money,” Escudero pointed out.

He is also wary that the bulk of the takeover appropriation will just be used to pay for the bonds held by state-owned Land Bank of the Philippines and Development Bank of the Philippines.

“Granting we pay the bonds in LBP and DBP, which are technically government anyway, why scrape Juan dela Cruz’s tight resources? The remaining balance is too miniscule to really own back MRT 3, why force the issue then?”

The DOF will go on an executive session with the Senate today to discuss the MRT 3.