MRT re-privatization

DIE HARD III
Herman Tiu Laurel
9/3/2012



Last time we summarized the decade-and-half experience of the BLT (Build-Lease-Transfer) MRT III contract, a history of swindle is continuing to this day. It began with tying the country to paying "subsidy" of P7 billion annually to the guaranteed profits of the original "investor consortium" of 15 percent per annum, a margin on the basis of super-bloated fares based on P60 from its South end at Taft to its North end at North Triangle, Quezon City. Then the latest phase: the re-transfer of the privatized project back into the hands of government with the buyback by the past Arroyo administration of the project which tried to avoid the increased financial burden imposed by another consortium led by powerful Goldman Sachs sued government. Now the dilemma is how to raise fares without triggering a commuters' revolt, in order to re-privatize it more profitably for the new corporations competing to take over.

Last August then DoTC Secretary Mar Roxas announced from out of the blue, the MRT 3 fare hike in 2013. That was perplexing as 2012 still had one whole quarter to go. There was no immediate trigger to cause concern in the MRT 3 issues. After seeing the rapid movement of Mar Roxas to the DILG portfolio taking over from the tragically fated Jessie Robredo and the appointment of an Aquino-Cojuangco loyal coattail hanger-on Rep. Joseph Emilio Abaya did possible explanations emerge. The inordinately early announcement of the MRT 3 fare hike for 2013 was to commit the DoTC to that fare hike and ensure that the new appointee to that post will have no more responsibility in defending that policy position. Roxas also announced that further public hearings on the issue were no longer needed and would not be called, freeing the successor to just implement the policy in 2013.

Roxas' MRT 3 fare hike announcement came five days after the loss of Robredo's plane, by that time his fate was already known. A case can be made that the preemptive announcement of the 2013 MRT 3 is connected to the sudden vacancy created in the top seat of the DILG. It was seen as the opportunity to ensconce the anointed Liberal Party 2016 candidate, and to concretize the down-to-baranggay control in preparation for the 2013 and 2016 elections. Several birds were hit with the move after Robredo's plane went into the sea like a big, gravity weighed stone falling from the sky. So much for the hero treatment for Robredo, from this perspective it was more like a hero-sandwich for the partisan political appetites of the Liberal Party plotters. Robredo was not a Liberal puppet because he was more a US puppet in the "civil society" crowd.

It was inexplicable why Robredo stayed on as long as he did in his post at the DILG despite BS Aquino III's zilch-heartedness to his confirmation, or why BS Aquino III appointed him in the first place if he was not going to cement Robredo's authority in the post. Aquino's zilch-heartedness for Robredo is also as clear in the delegation of authority over the police to BS Aquino III's beloved Rico Puno. In this country the only power greater than the presidency itself, though couched in diplomatic cloak and democratic language, is the US Embassy. Robredo is associated with the Magsaysay Foundation crowd, with the whole "Kaya Natin" of Robredo, Padaca, Among Ed crowd and the Kennedy School of Government clone Ateneo School of Government network of Harvey Keh and the Jesuits. With Robredo gone the Liberal Party faction of the Yellow movement moved their chess pieces forward.

Back to the MRT 3, ensuing from the MRT 3 2013 fare hike will be its re-privatization to a new private corporation or consortium. Why are we certain that a private corporation will be taking over after the fare hike? Because that's been announced over and over again, as in this headline by Paolo G. Montecillo of Jan. 25, 2012 reports, "MVP unit to assert right over MRT 3 deal." MPIC and MVP got this right by taking over into the company that signed the MRT 3 BLT contact with FVR — the MRT Corp. MVP's spokesman said, "it is a proposal by MPIC pursuant to the expansion rights granted to MRT Corp. under the existing BLT agreement with the national government," and MVP wants a 15-year extension with that.

Mar Roxas' fare hike will add P2 billion to the revenues of the MRT 3, and whichever companies are in on the re-privatization they will wallow in the P2 billion, plus the P5 billion continuing "subsidy" to the guaranteed profits based on the overpriced P60 fare. MVP said that  "under MPIC's proposal, the company would spend $300 million to improve the system's operations and expand its capacity." But Mar Roxas' fare hike already guarantees P2 billion or $40 million in revenues, more than enough for improvements. Again, the Filipino taxpayers and MRT commuters will be made to feed the increasing profits of the oligarchs and predatory corporations.

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