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Justice dep't still to decide on who gets MRT-3 project
B. L. Lorenzo, BusinessWorld (11 Aug 2004)

MANILA, PHILIPPINES: The lack of a Department of Justice (DoJ) opinion is delaying a three-station expansion of the Metro Rail Transit Line 3 (MRT3) which is scheduled to start this year.

MRT3 General Manager Roberto Lastimoso said his office cannot completely comply with requirements set by the National Economic and Development Authority (NEDA) without the DoJ opinion.

"We have submitted four out of the five requirements. We can't submit [all] because the issue is not yet resolved by the DoJ," Mr. Lastimoso said in an interview.

He said the DoJ has yet to decide whether to award to MRT Corp. the expansion project or to open the project to other possible bidders.

"Under the package, MRT Corp. should start the construction of Phase 2 18 months after the construction of Phase 1," Mr. Lastimoso said.

Certain parties, he said, have insisted that Phase 2 is a new project and therefore must go through the whole bidding process.

The delay means the NEDA's Investment Coordination Committee (NEDA-ICC) cannot start its project evaluation for MRT3.

Aside from the DoJ's legal opinion, the NEDA-ICC is requiring details on the project's return on equity, political risk premiums and interest limitations, review of costs from the Department of Budget and Management, and the acquisition of light rail vehicles.

The project comprises the construction of three new stations in Roosevelt and Balintawak in Quezon City to Monumento in Caloocan. The expansion is expected to increase the current MRT3's ridership of 350,000 to 400,000 passengers daily.

Meanwhile, he said the MRT3 is not liable to pay real estate taxes, estimated at about PhP4 billion, said to be owed to four cities hosting the railway.

Mr. Lastimoso said he will just wait for the local governments to file a case so that the issue would be settled in the proper forum.

The MRT3 chief said that even before he took office, there was an informal agreement between the DoTC, DILG and the Finance Department exempting the rail system from paying taxes because it is a public utility.

"As far as the national government is concerned, the MRT3 should not pay taxes because it is a public utility," Mr. Lastimoso said.

Copyright © 2004 BusinessWorld Online, Inc. ALL RIGHTS RESERVED.

http://bworldonline.com/current/TheEconomy/ecostory3.html

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