SMC pushes speedy resolution of common station impasse

San Miguel Corp. ( SMC) is pushing for the immediate resolution of the impasse on the proposed common train station connecting the Metro Rail Transit ( MRT) and Light Rail Transit (LRT) systems.

Raoul Eduardo Romero, chief financial officer of San Miguel Holdings Corp., said the stalemate in the dispute between the Department of Transportation and Communications and SM Prime Holdings Inc. is affecting the financial closure for the P63 billion MRT-7 project.

“Hopefully we can gear up and get the MRT-7 project rolling as well, depending on the resolution of the problem with the common station. That is one of the major problems. If the common station will remain a common station or not, we don’t know,” Romero said.

In 2008, the Department of Transportation and Communications (DOTC) and ULC signed a contract to build the 22.8-kilometer rail system from North Avenue corner EDSA in Quezon City, passing through Commonwealth Avenue, Regalado Avenue and Quirino Highway up to the proposed Intermodal Transportation Terminal in San Jose del Monte, Bulacan.

The MRT-7 project is expected to carry two million passengers a year. SMC is in the middle of completing the financial closing for the project.

According to Romero, the DOTC has given the company until February next year to complete the financial closure for the infrastructure project.

“We have until February 2016 for financial close. We are still putting the financial group together,” he said.

According to Romero, lenders would not extend loans for projects that are surrounded by controversies.

“It doesn’t make sense for us to do that right now because there are questions the lenders will ask that we cannot answer. Like where will it end, if the ridership is divided. Will MRT-7, MRT-3, and LRT-1 be separated,” he said.

The DOTC pursued the transfer of the proposed P1.4 billion common station to the Trinoma Mall instead of SM North EDSA as part of the concession agreement for the P65 billion LRT-1 Cavite extension project signed with Light Rail Manila Consortium of Ayala Corp. and Metro Pacific Investments Corp. (MPIC).

“There is a legal challenge from SM against the Republic of the Philippines. We are not a party to that. Our concession agreement mandates and requires us to be there (in SM). If we move out of that, that is a violation of our concession agreement,” Romero said.

Furthermore, the proponent would have to adjust the cost of the project originally placed at $1.6 billion since it was pegged in 2008 prices.

“We will have to make adjustments,” he said.

Despite the predicament, Romero said the company is doing its best to meet the February deadline for the financial closure of the project.