MVP ­­wants longer contract period for MRT-3

MANILA, Philippines —  One of the potential bidders for the privatization of the Metro Rail Transit Line 3 (MRT-3) wants the government to award a new concession with a service contract longer than 15 years.

Tycoon Manuel V. Pangilinan of Metro Pacific Investments Corp. (MPIC) said he is hopeful nothing is final yet with regard to the government’s plan of shortening the concession of the next operator of MRT-3 to a maximum of 15 years.

Pangilinan said concessionaires demand longer terms to give them time to recover their investments and make profit, noting that government also loses from a shorter concession. In the end, the government will be forced to cut the value of an infrastructure if the contract runs for a few years only.

“The longer the concession period, the better it is because that is the nature of this [business]. We will be investing in MRT-3, so shortening doesn’t help us and doesn’t help them as well because the prices will drop,” Pangilinan said.

The Department of Transportation (DOTr) has yet to set the length of the concession for the contract to operate and maintain the MRT-3 from 2025 onward.

However, Transportation Undersecretary Timothy John Batan said the DOTr may condense it to 10 to 15 years, as the deal will cover only the operations and maintenance of the railway.

Batan earlier said the government is shouldering the P29.6 billion rehabilitation of the MRT-3, taking a $130 million loan from Japan in 2023 to fund the improvement of the rail line.

He admitted that things may change down the line depending on the feasibility study that will be turned over by the Asian Development Bank (ADB) to the DOTr. Batan said most likely, the DOTr would adhere to whatever the ADB will say is the best possible term.

The DOTr is expected to bid out this year the concession to run the MRT-3, as the contract with Sobrepeña-led Metro Rail Transit Corp. will expire in 2025. Pangilinan said MPIC is prepared to participate in the bidding, and is open to the prospect of tying up with San Miguel Corp. (SMC) in vying for the project.

SMC had secured the original proponent status for the operations and maintenance of the MRT-3, but MPIC had submitted a separate proposal to compete for the project.

However, the DOTr opted to decline both offers made by MPIC and SMC as it wants to take the solicited route where the government can dictate the terms of the concession.