Gov’t plans to raise stake in MRTC to 75%

03/31/2009

The government plans to raise its stake to about 75 percent in Metro Rail Transit Corp. (MRTC) by the end of April from its current 56 percent holdings in the mass rail transit firm.

Finance Secretary Margarito Teves said the government, through the Development Bank of the Philippines (DBP) and Land Bank of the Philippines (LBP), already had a controlling stake in MRTC.

MRTC is the owner of the 16.9 kilometer MRT-3 line plying Edsa from North Triangle in Quezon City to Taft Avenue in Pasay City.

Teves said that with control of the firm, the government will save about $235 million from rental payments for the rail transit.

“This will enable the government to expand MRT-3 and to optimize revenues for commercial development,” he said.

DBP president Reynaldo David said the DBP is also negotiating with other MRTC stakeholders to buy more shares.

He said DBP’s plan to acquire more shares of the company for the government was concretized last December.

He said that to date, the government has six seats in the MRTC board and by the end of April this would likely increase to about 10 seats.

A bigger stake in MRTC means higher savings to the government and “substantial” benefit to the riding public, Teves said.

“It’s going to be more efficient,” he said, pointing out that the government can now buy more coaches and decrease the interval time for each coach to arrive at a station.

He said the MRT coaches’ capacity is only around 200,000 a day but in reality it is servicing around 400,000.

Meanwhile, Teves clarified that acquiring more shares with the company does not mean that the government is reversing its privatization policy.

He said what they want doing “is not reverse privatization but savings for the government.”

“Take-over will be temporary because privatization will be done as soon as possible,” he stressed.

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