Metro Pacific Investments Corp. (MPIC) is hesitant to join the government's bidding for the operations and maintenance (O&M) contract of Metro Rail Transit Line 3 (MRT-3), as losses from its existing railway business dampen its appetite for another rail concession.

"It is hard to propose to the board because we already have [LRT-1]. Why would you want [MRT-3]? Why would you want to double down on something that is losing money?" MPIC Chairman Manuel V. Pangilinan said on the sidelines of an event last week.

The Department of Transportation (DoTr) is preparing the bidding for the MRT-3 O&M contract after a series of market-sounding activities aimed at gauging private-sector interest in the project. MRT-3, the 16.9-kilometer, 13-station line along Epifanio de los Santos Avenue (EDSA) that carries hundreds of thousands of commuters daily, has been maintained by a joint venture of Japan's Sumitomo Corp. and Mitsubishi Heavy Industries since a Japanese-funded rehabilitation completed in 2021 restored the line's fleet and facilities. The planned solicited auction proceeds under the amended Build-Operate-Transfer law, whose 2022 amendments and 2023 implementing rules were meant to give agencies more flexibility on contract terms and government support arrangements to draw private capital into big-ticket projects.

Mr. Pangilinan said MPIC remains interested in reviewing the terms of the MRT-3 project as the company concentrates on returning Light Rail Manila Corp. (LRMC) to profitability.

"We need to see whether the terms of the MRT-3 are conducive," he said.

MPIC has previously said it was considering divesting its stake in LRMC due to mounting losses, which it attributed in part to delayed government payments.

LRMC took over the operations and maintenance of Light Rail Transit Line 1 (LRT-1) in September 2015 under a P65-billion, 32-year concession agreement with the Light Rail Transit Authority (LRTA) and the DoTr.

Earlier this year, the DoTr said it had obtained a P3.6-billion facility from the Land Bank of the Philippines (LANDBANK) to help settle its obligations to LRMC.

In May, the Transportation department said about 74 local and foreign companies from 14 countries had expressed interest in the planned public-private partnership (PPP) for MRT-3.

Under the DoTr's timeline, solicited bidding for the project may begin by October, with bid submissions expected by March 2027. The contract is targeted for award between June and July 2027, while the winning bidder is expected to take over MRT-3 operations by October 2027. For prospective bidders, a central question is how the final terms treat government payment obligations and other support mechanisms — the same issues that weighed on the LRT-1 concession's finances.

MPIC had earlier submitted an unsolicited proposal for the MRT-3 O&M concession, which the DoTr rejected in December 2024.

MPIC is an infrastructure investment company with interests in toll roads, water utilities, hospitals, rail, logistics, and power distribution through its portfolio companies. It is one of the three principal Philippine units of Hong Kong-based First Pacific Co. Ltd., alongside Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

Source: BusinessWorld — Ashley Erika O. Jose