SMC still waiting for PNoy's nod on start of MRT 7 construction
MANILA - The Department of Transportation and Communications (DOTC) is awaiting the National Economic and Development Authority (Neda) Board’s approval for the start of construction of the Metro Rail Transit (MRT) Line 7 to be undertaken by San Miguel Holdings Corp.
The inter-agency Neda Board is chaired by President Aquino.
“The MRT 7 is now with the President. Once the Neda Board gives its approval then we will issue the notice to proceed,” Transportation Secretary Joseph Emilio Abaya said in a text message.
San Miguel Holdings Corp., the proponent of MRT 7, is already eager to start construction of the $1.2-billion railway system.
The conglomerate had awarded to the Marubeni-DMCI consortium the contract for the engineering, procurement, construction and commissioning of the railway project.
The MRT 7 project involves the construction of a 22-kilometer train line with 14 stations traversing North Avenue, Elliptical Road, Commonwealth Avenue, Quirino Avenue and San Jose del Monte in Bulacan.
“We have forwarded a memo to the President as directed by the Neda, addressing the unit cost comparison of the various rail projects,” Abaya said.
According to the DOTC chief, the Neda wants a comparison of the project cost, project scope and possibly the railway fares of MRT 7 as against MRT Line 3 and LRT (Light Rail Transit) Lines 1 and 2.
“Just a check to make sure that prices are relatively the same. When we compared, it seems to be similarly priced on unit costs,” Abaya said when asked why there was a need to compare the proposed MRT 7 project versus the existing railway lines in the metropolis.
He said it was the Neda Board which asked the DOTC to submit a report on it. “I think once approved by the Neda Board we can then issue the notice then that’s the green light,” added Abaya.
The government is carefully scrutinizing the contract to ensure there will not be a repeat of the MRT 3 case, in which the government has already spent some P75 billion in subsidy for the past 10 years.
The loans incurred by the consortium that built the MRT 3, Metro Rail Transit Corp., were backed by the government’s sovereign guarantee similar to the Independent Power Producers contracts in the power industry, which carried “take-or-pay” provisions guaranteeing profit for the investors.
Universal LRT Corp. held the right to develop the MRT 7. However, in 2010, San Miguel acquired a 51-percent interest in Universal LRT, which used to be owned by Israeli businessman Eli Levin before he sold it to businessman Salvador Zamora II.
The project has been delayed for about five years now because of the failure of the proponent to secure a performance undertaking from the Department of Finance (DOF). A performance undertaking is crucial so the MRT 7 proponent can secure financial closure for the project.