Monday, March 31, 2008 [ manilatimes.net ]
By Chino S. Leyco Reporter
A EUROPEAN commercial bank is willing to finance the capacity expansion of the congested Metro Rail Transit Line 3 (MRT-3), the Department of Finance said Friday.
Finance Undersecretary Roberto Tan told reporters that WestLB AG will offer financing for the winning bidder of the project, adding access to this loan would depend on the fate of the plan.
“They [WestLB] are just saying that they are willing to finance it. [But] we will give this to [the] best offer. I’m sure there will be other offers,” Tan said, without providing details of the financial package.
“DOTC [Department of Transportation and Communication] wants it as soon as possible, hopefully at the end of the year,” he added.
Almost eight years after the MRT-3 started running, the government is set to buy out its assets from a group of investors led by the Metro Rail Transit Corp. (MRTC) ahead of the contract termination date, purportedly to save on hundred millions of dollars in state subsidies a year.
The idea of buying out the rail transit was raised after the government expressed difficulties financing the P48 per passenger subsidy for the train’s operations. With a daily ridership ranging from 420,000 to 430,000, the government pays at least P20.46 million a day given the minimum fare of P10 per passenger.
Despite the government’s plan, MRTC will pursue the capacity expansion.
Robert John Sobrepeña, MRTC chairman, had said that within the next two years, 30 new train cars would be added, while another 48 cars would be purchased five years thereafter.
Last year, the government already signed the $865-million deal to acquire the operation of MRT 3, which would yield it $380 million in savings. If the government failed to buy back MRT 3, it will have to pay $10 million a month by 2010.
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