MPIC likely to pass up on subway bidding

February 22, 2024 | 12:00am

MANILA, Philippines — The Metro Pacific Investments Corp. (MPIC) plans to pass up on the opportunity to manage the Metro Manila Subway Project (MMSP), the first underground railway in the Philippines being built by the government.

MPIC chairman Manuel V. Pangilinan said the company wants to balance its portfolio to sustain financial health, and adding another project regulated by the government is counterproductive to that strategy.

Pangilinan recalled that MPIC in 2020 pulled out of the consortium that submitted a P102-billion pitch to rehabilitate and upgrade the Ninoy Aquino International Airport (NAIA).

He said MPIC withdrew from that group on concerns about the regulatory environment in the airport.

“From what we hear, subways don’t make money. We also care for the balancing of our portfolio and that is part of the reason we opted out of the super consortium for NAIA,” Pangilinan said.

“In our case, we have quite a heavy concentration of regulated industries already, and so we have to sort of diversify,” he added.

On the contrary, MPIC is planning to become the majority owner of the Light Rail Manila Corp. (LRMC), the operator of the Light Rail Transit Line 1 (LRT-1), by acquiring the 35 percent stake of the Ayalas.

Recently, LRMC has received the green light to raise passenger fares at the LRT-1, the first time that it did since 2015 when the railway was turned over to the private sector.

As allowed under the concession, LRMC can request for fare hikes to recoup its investments in the rail line, but the government has denied prior petitions made by the company.

This forced the LRMC to file a lawsuit in 2022 demanding compensation of about P2.67 billion.

The privatization of other railways, including the MMSP, is expected to tread a similar path as the LRT-1 wherein the government will retain control on fare setting.

In 2023, the Department of Transportation confirmed that the operations and maintenance of the MMSP would be handled by the private sector.

The DOTr estimates the privatization of the MMSP to cost P76.89 billion, and the concessionaire can earn from the project through fare collection and future developments.

The MMSP will run for roughly 33 kilometers across seven cities in Metro Manila and will trim the travel time between Quezon City and NAIA to 35 minutes.