Press Release
September 1, 2014


Legal action should have been taken against the Metro Rail Transit Corporation (MRTC) for having been in default in its responsibility to purchase additional train coaches for Metro Rail Transit 3 (MRT 3) to decongest the system, Senator Chiz Escudero said.

In today's Senate Sub-Committee hearing on MRT, Escudero grilled officials of the Department of Transportation and Communications (DOTC) for their inaction in protecting the interests of the government in the MRT 3 project and allowing the private company to shortchange the government and the riding public.

"Don't you have any plans in your pipeline to sue MRTC? Why do you allow them to barrage the government with litigations left and right by way of TROs when clearly, they did not perform on their contract? They are in default, they have not been doing all of these we are talking about here in the past 11 years?" Escudero asked DOTC Undersecretary Jose Perpetuo Lotilla.

The senator, who made the call to probe the real ownership of the MRT 3 as early as 2010, issued fresh calls anew to resolve the issue as DOTC officials admitted in the hearing that the Sobrepeña group, which owns the MTRC, is still the owner of MRT 3 by way of a build-lease-transfer (BLT) contract with DOTC in 1997. The agreement was to build the MRT 3 project with a put-up equity of $190 million. The government has since been paying for the project.

DOTC officials said the MRTC should have purchased additional train coaches as far back as 2003 to address capacity expansion. It has failed to expand the mass transport system and even took legal action against the DOTC over the latter's purchase of additional 48 train coaches for MRT 3.

"The MRTC has not been doing its side of the contract for the past 11 years, why has not the government through you sued them to comply or you have made any legal move to terminate the contract instead of us paying P50 billion for their lapses and blunders? Why do we, the Filipino taxpayers, pay for the sins of these sinners?" Escudero pointed out.

Undersecretary Lotilla said "the option is already under study, going to that direction" in reply to Escudero's question.

"So how much longer do we need to study this before we actually file a case against them and stop the bleeding of the taxpayers' money? Why is the MRTC so quick to draw their guns against the government but you are so slow to protect people's money?" the senator asked DOTC officials.

Over the years, the MRTCo has retained control of the operations and development of the MRT 3 and has been collecting and receiving income from development rights from commercial rights and development of the 16-hectare depot site, including all concessions to develop air and ground spaces.

"It is very wrong for the government to do what MRTC should have been doing. Why do we continue subsidizing them for their non-performance and allow them to just watch and pocket all the revenues? Revenue flows should be pointing towards the government coffers," Escudero said.

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