BIZ BUZZ: ‘Use your own money’
When public-private partnerships (PPP) turn sour, thanks to little to no tariff hikes at all, billionaire Manuel V. Pangilinan has something to say to the government: Pay your way.
The Light Rail Transit Line 1’s (LRT 1) bleeding continues, as approved tariff adjustments have come in lower than what the operator proposed to keep operations profitable.
As a result, Pangilinan, who leads Metro Pacific Investments Corp., is seriously weighing his options, considering if the business remains worth the group’s while.
The thought of continuing to operate despite losses “para sa bayan” may not be enough to keep the train running.
Pangilinan said his group was “considering selling” its stake—which is 35.8 percent—in Light Rail Manila Corp. (LRMC).
“Kasi naman hindi nagbibigay ng tariff adjustment (Well, it’s because we are not being given a tariff adjustment,” Pangilinan said, perhaps half in jest, during a media briefing in Hong Kong.
“It should be a government thing kung ayaw nila magbigay ng taripa (It should then be a government project if they do not want to give the right tariff rates). The basic tenet of PPP is that you’re asking for other people’s money to build a particular project. So it is not government money,” he said.
“When you borrow other people’s money, that money was given to that particular proponent by its owners, and its owners expect a return from that … It’s as simple as that,” Pangilinan stressed.
And if the government refuses, he said, “then use your own money.”
“If you can’t put your mind around that concept, the very heart of PPP, then you should undertake it by yourself. Because when you use your own money, nobody questions it,” he explained.
While the executive really hit the nail on the head, he noted that nothing’s final yet on the exit from LRT 1.
And according to LRMC president Enrico Benipayo, Pangilinan’s pronouncement had made the transportation chief drop a line.
“The following day, I received a message coming from the DOTr (Department of Transportation) secretary himself. I cannot disclose at this point in time, but what I can say is [that it’s] something positive,” Benipayo said.
