The Department of Transportation (DOTr) wants to bring back the Japanese group involved in the Metro Rail Transit Line 3 (MRT 3) construction and design 18 years ago in a bid to resolve breakdowns that disrupt the journey of thousands of commuters on a near-daily basis.
The DOTr said yesterday it was holding high-level talks with the Japanese government for Sumitomo Corp. and its technical partner, Mitsubishi Heavy Industries, to maintain and rehabilitate the MRT 3 via an indicative three-year agreement—backed by a fresh loan from Japan.
It hopes to sign the agreement before the end of 2017.
Sumitomo-Mitsubishi maintained the MRT 3 for its first 12 years of operations. The agreement was not renewed in 2012 under the Aquino administration when the 17-kilometer MRT 3, which traverses the crucial Edsa highway, was already showing signs of strain.
Aquino-era officials said the tandem had imposed conditions they could not accept, including increasing the monthly maintenance fee to $2.2 million from $1.4 million while cutting back on certain responsibilities covering fare collection and the MRT 3 signaling system. Local companies were hired instead but the problems at the MRT 3 did not abate.
The DOTr’s announcement yesterday came less than a month since it formally terminated the contract of previous maintenance provider Busan Universal Rail halfway through its three-year agreement due to continued glitches and for not meeting certain obligations.
The new direction with Sumitomo also casts the spotlight on the MRT3 rehabilitation, maintenance and operations offer of Ayala Corp. and Metro Pacific Investments Corp., which was already granted original proponent status. It likewise reflects the Duterte administration’s general skepticism on the private sector funding big infrastructure projects.
“The joint venture of Sumitomo and Mitsubishi Heavy Industries is being closely considered due to its background and experience with the MRT 3,” the DOTr said in a statement.
The DOTr did not detail the target loan amount under the Japanese overseas development assistance (ODA) component. The department said the intention was for Sumitomo-Mitsubishi to “rehabilitate and restore the system to its original performance condition.”
“Due to under-investment in preventive maintenance and renewal works in recent years, the condition of MRT 3 has degraded to a state where maintenance works alone are no longer sufficient,” the DOTr said.
The department also clarified that these were direct talks with Japanese counterparts and that businessman Robert Sobrepeña was not involved. Sobrepeña, part of the group with private interests in the MRT 3, said last May that Sumitomo offered to rehabilitate the MRT 3 for $150 million (P7.5 billion).
https://business.inquirer.net/241699/japan-aid-eyed-mrt-3-rehab
The DOTr said yesterday it was holding high-level talks with the Japanese government for Sumitomo Corp. and its technical partner, Mitsubishi Heavy Industries, to maintain and rehabilitate the MRT 3 via an indicative three-year agreement—backed by a fresh loan from Japan.
It hopes to sign the agreement before the end of 2017.
Sumitomo-Mitsubishi maintained the MRT 3 for its first 12 years of operations. The agreement was not renewed in 2012 under the Aquino administration when the 17-kilometer MRT 3, which traverses the crucial Edsa highway, was already showing signs of strain.
Aquino-era officials said the tandem had imposed conditions they could not accept, including increasing the monthly maintenance fee to $2.2 million from $1.4 million while cutting back on certain responsibilities covering fare collection and the MRT 3 signaling system. Local companies were hired instead but the problems at the MRT 3 did not abate.
The DOTr’s announcement yesterday came less than a month since it formally terminated the contract of previous maintenance provider Busan Universal Rail halfway through its three-year agreement due to continued glitches and for not meeting certain obligations.
The new direction with Sumitomo also casts the spotlight on the MRT3 rehabilitation, maintenance and operations offer of Ayala Corp. and Metro Pacific Investments Corp., which was already granted original proponent status. It likewise reflects the Duterte administration’s general skepticism on the private sector funding big infrastructure projects.
“The joint venture of Sumitomo and Mitsubishi Heavy Industries is being closely considered due to its background and experience with the MRT 3,” the DOTr said in a statement.
The DOTr did not detail the target loan amount under the Japanese overseas development assistance (ODA) component. The department said the intention was for Sumitomo-Mitsubishi to “rehabilitate and restore the system to its original performance condition.”
“Due to under-investment in preventive maintenance and renewal works in recent years, the condition of MRT 3 has degraded to a state where maintenance works alone are no longer sufficient,” the DOTr said.
The department also clarified that these were direct talks with Japanese counterparts and that businessman Robert Sobrepeña was not involved. Sobrepeña, part of the group with private interests in the MRT 3, said last May that Sumitomo offered to rehabilitate the MRT 3 for $150 million (P7.5 billion).
https://business.inquirer.net/241699/japan-aid-eyed-mrt-3-rehab
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