What about MRT 3 and Slex?

If less intervention in the ongoing PAL dispute is the norm for the government, it must take a more proactive and interventionist role in the case of the other transport problems it is now facing—the rate increases for Metro Rail Transit (MRT) 3 and South Luzon Expressway (Slex). In the case of MRT 3, perhaps it is time for it to take over the operations after buying up to 80 percent of the system’s issued bonds (the “economic interests,” as they call it in investment lingo) and ensure that the Sobrepeña group, which has been living off the largesse from this questionable BLT contract for so long, can no longer dip into the till without having to pay its outstanding obligations and account for all the monies which have been poured (mis)using the thrice-renegotiated contract and then those siphoned off by the same group via currency swaps, operating contracts, equipment orders, nonrail revenues, and the like, from this vital transport link.

Yes, sir, this system has been so messed up and drained of its real value by the private operator, MRT Development Corp., it is time the government stopped the leakage. By taking over the operations at this time, the government can get a handle on the day-to-day handling of this vital link and find for itself where the possible savings can be. Why, if it gets deep and exhaustive enough in its investigation, it may even bump into other sources of revenue, like unpaid fees and taxes, which may mitigate the expected rise in the rates it hopes to impose anytime soon. There is really no rhyme or reason for the government to treat this operation like “business-as-usual,” without opening itself to charges of regulatory capture. Worse, it has allowed itself to be maltreated twice over, having paid the princely sum of $800 million to take the 80-percent “economic interest” of the entire system and letting the Sobrepeña group operate it in its own “merry ways.” If Energy Secretary Jose Rene Almendras had the courage to suspend the contract payments for the suspected National Transmission Corp. contracts in the dying days of the past regime, why can’t the Department of Transportation and Communications and the Office of the President do the same on a system it already owns, di ba?

The same can be said of the Slex, which, as we said in a previous
column, may have actually used at least part of the unremitted collections of the original franchisee, PNCC, to finance its “upgrading” of the Alabang-Calamba portion of the tollway. Before the government agrees to any toll increase, it should inquire into the actual disbursements for the so-called upgrading to make sure the Philippine National Construction Corp.’s Malaysian partner, MTD Berhad, invested what it said it did and, more important, that its actual cost is fair and reasonable.

We are told, for example, that the consortium did not actually spend what it told the TRB it spent and inputted in its petition for rate increase. If true, that is really worrying and despicable. We are also being advised that the rate need not be increased to such a stratospheric level of 250 percent immediately since the same can be done incrementally. I mean, why allow the private consortium to get back its investments, if any, in say, a year or two, when its contract is for 25 years? Is this not a most abominable operation by any standard?

Indeed, as Energy Secretary Almendras and, I am sure, Secretary Ping de Jesus should appreciate by now, there is a limit to what the public can take from such predatory operators. Which is the reason, I am told, they have actually ordered a full and complete review of all the contracts which the government has entered into with private “partners,” many of which have been messed up, truncated, recast, reworked and reconfigured beyond recognition to the utter dismay and disadvantage of the government and the general public. Indeed, “business-as-usual” can no longer be the norm and President Aquino himself has said so. Sya nawa! –Businessworld