DOTr to extend Sumitomo MRT 3 rehab contract
The Department of Transportation (DOTr) will extend its existing contract with Sumitomo Corp. for the rehabilitation and maintenance of Metro Rail Transit Line 3 (MRT 3) as the agency gears up to improve operations in one of the capital region’s main transport systems.
In a forum hosted by the Economic Journalists Association of the Philippines on Monday, Transportation Secretary Vince Dizon said they were “sure” about the extension, especially since the contract with the Japanese conglomerate was set to expire in July.
“There will be an extension and we will give details once it’s done,” Dizon told reporters.
“Let’s wait for the [extension] documents to be released,” he explained when asked about the length of the extension contract.
Sumitomo is the original designer, builder and maintenance provider of MRT 3, which began operations in 2000.
The Japanese firm was replaced in 2012, then rehired in 2019. Sumitomo’s contract with the DOTr was extended in May 2023 for P7.38 billion, giving the company authority to rehabilitate and maintain MRT 3 until July 2025, along with Mitsubishi Heavy Industries Ltd. and TES Philippines Inc.
Rail extension
In addition to maintaining the main MRT 3 line, Sumitomo needs to extend rail lines, install signals to the delayed common station and expand tracks “necessary for increasing the number of railcars in a train.”
At the same time, Dizon said bidding for the build-lease-transfer (BLT) deal for MRT 3 would push through, as the government’s contract with Sobrepeña-led Metro Rail Transit Corp. (MRTC) was also scheduled to end next month.
“Why would it not push through? We need a PPP (public-private partnership) for MRT 3. That is the goal for this year,” the secretary said.
Under a BLT deal, a private entity usually finances, designs and builds the project. Once completed, the government leases the infrastructure within a specified period before ownership of the project is officially transferred to the government.
In MRTC’s case, it entered into a 25-year BLT contract with the government for the 16.9-kilometer train system. The DOTr then pays monthly equity rental payments to MRTC to help the latter recoup its investment and cover financial obligations.
