Metro Pacific Investments Corporation (MPIC) said that it will no longer push through with its unsolicited proposal to maintain and operate MRT-3. The company said that it doesn’t care about the proposal anymore. Mr. Tugade, the transportation secretary simultaneously reported that the government is still open for chances to privatize the operations and maintenance of the said transportation system. He said that the most important thing about this matter is for the MRT-3 and the equity to be fixed. Here are more details about the news.
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It was 2017 when the transportation department provided consortium for the unsolicited proposal to operate and maintain the MRT-3. The three big companies that were involved were the Ayala Group, MPIC, and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd. Currently, MRT has the concessions of LRT-1. In 2018, signing of a contract between the Department of Transportation and Japan’s Sumitomo Corporation and Mitsubishi Heavy Industries, Ltd. (Sumitomo-MHI) took place and according to the contract, the companies will take over the maintenance of MRT-3. The disclosure of MPIC as to why it’s dropping the proposal has no clear reasons why yet.
Metro Pacific reported just recently that its net income has increased by 69% in 2019. The rise in net income was triggered by the solid performance of its business segments. The disclosure of the company stated that the income reached P23.9 billion. Because of the enhancement in financial and operation, MPIC got a 7% rise in contributions from operations. The company subsequently reported that the key factors that affected this growth were substantial core net income growth from Manila Electric Company, continued traffic growth on its domestic toll roads, and strong patient numbers at its hospitals.
We know that MPIC is operating different business segments including an electricity company, water, logistics, rail, and others. Its power business segment was able to produce P11.6 billion net operating income or equivalent to 55% of its total net income. Its toll roads brought P5.2 billion or 25% of the totals. Meanwhile, its water business segment contributed 17% of its net operating income or P3.6 billion. The hospital unit gave 4% or P867 million. Logistics, rails, and other businesses of the company incurred a net loss totaling P352 million. There were higher interest costs for finance capital expenditures, which was partly the reason why its core income growth was pulled down.