Metro Rail Transit Corporation

History
For years now, rapid growth of commuters and vehicles population have plagued Metro Manila,
the center of Philippine socio-economic and political activity. Heavy traffic, pollution and all the
attendant undesired results are problems that Metro Manila have to contend with daily.
A case in point is on EDSA, a 24-kilometer stretch from MacArthur Highway at Caloocan City
in the north of Metro Manila to Roxas Blvd., Pasay City, south of Metro Manila.Considered one
of the world's highest volume thoroughfares, EDSA is a semi-circular ring road link with several
radial roads leading to the metropolis' social, economical and political centers. The avenue cuts
across the cities of Caloocan, Quezon, Mandaluyong, Makati, and Pasay and bounds Pasig City
and the town of San Juan.
EDSA's importance to the lives of more than eight million people - or 12 percent of the country's
68 million citizens who live in Metro Manila cannot be underestimated. Added to the metropolis'
growing population are the transients and migrants who come to live in Metro Manila in search
of opportunities. Every birth, transient or migrant, is a potential commuter who will likely join
more than the 2.8 million people already using EDSA.
At the same time, every birth, and transient or migrant, is also a potential car owner likely to
occupy 4.6 meters by 2.7 meters, the average car area of street space. The fast pedestrian and
vehicle population growth has become a major headache for metropolitan planners who concede
that Metro Manila's road, which comprise less than 10 percent of the country's network, cannot
adequately accommodate pedestrian and vehicular traffic. Streets in the metropolis expand by
less than two percent annually.
Statistics add that traffic has caused the loss of over P15 billion yearly due to lost man-hours,
repairs and maintenance and lost fuel. Added to these are unquantifiable discomforts to
commuters and vehicle owners undergo when they travel through major streets.
At worse, heavy traffic is taking its toll on the nation's social and economic build-up. Traffic in
Metro Manila is expected to nearly resemble nerve-wracking conditions in Bangkok, Thailand
and in other parts of the world. Experts agree that a long term solution, beyond just keeping
vehicles off the streets, is imperative. One of the solutions that the government sponsored was
the establishment of the EDSA MRT3 System.

Background
The Metro Rail Transit 3 (MRT-3) is the cornerstone of the Department of Transportation &
Communication's integrated strategy to alleviate the chronic traffic congestion experience along
the EDSA corridor. The Metro Rail system is designed to carry in excess of 23,000 passengers
per hour per direction, initially, and is expandable to accommodate 48,000 passengers per hour,
per direction.

The DOTC awarded a contract to Metro Rail Transit Corporation (MRTC) to build, lease and
transfer the Metro Rail Transit System, under the BOT laws of the Republic of the Philippines.
The scheme required the DOTC to hold the franchise and run the system particularly the
operation and the collection of fares. The MRTC built the system, maintain the same as to
guarantee the availability of the trains at specified headway at specified hours, as well as to
procure the required spare parts, the DOTC pays MRTC monthly fees for a certain number of
years.

MRTC financed the construction of the EDSA MRT III, a 16.9-kilometer modern rail system to
stretch along EDSA's 10.5-meter median from North Avenue in Quezon City to Taft Avenue,
Pasay City.

MRTC infused US$ 190 million (P4.49 billion) in equity into the project.

MRTC obtained financial closing, with the help of international financial consultant JP Morgan,
for loans worth US$ 465 million P 12.32 billion) from the Bank of Tokyo-Mitsubishi, and Japan
Export-Import Bank (JEXIM); the Postal Bank of the Czech Republic and Czech Export Credit
Agency; and a group of local banks on October 17, 1997.

The loans are backed by the government through a sovereign undertaking, as agreed with the
Department of Finance, to cushion risks to investors and creditors.

Management Aspect

A. Business Perspective
Mission
To provide an adequate, regular and faster mode of transport service along EDSA by operating a
safe, efficient and reliable light rail transit system designed to meet the standards of service,
quality and customer satisfaction; create opportunities for community development; attain scal
independence and economic growth; in order to contribute to national stability and prosperity.
Vision
A progressive rail transport system anchored on:
service excellence
community development
economic stability
Service Pledge
To provide fast and safe transportation to the public
To provide efficient, courteous and respectful service to the riding public
To promote and embody the development, national stability, and aspirations of the
Philippine Government
To serve our Senior Citizen and differently-abled persons





Legal Requirements

The BLT Agreement was signed by DOTC and Metro Rail on August 8, 1997 and amended on
October 16, 1997. It constitutes a restatement of similar agreements dating back to the first such
contract, which was signed on November 7, 1991. That agreement was restated on April 22,
1992, and the restated agreement was supplemented on May 6, 1993, and amended on July 28,
1994 and May 1996. Another restatement was signed on October 3, 1996. All the terms in those
prior agreements were superseded by the provisions of the BLT Agreement.
The BLT Agreement governs the relationship between Metro Rail and DOTC during the
Projects two major phases, construction and revenue service. During the construction phase,
Metro Rail was obliged to construct the Project (Phase 1) and to complete that construction by a
certain date (the Date Certain). The construction was to be accomplished in accordance with
the specifications and drawings approved by the DOTC and the completed system capable of
achieving certain capacity requirements. Metro Rail was also obligated to provide all equipment
that was to be used in the system, including the rail vehicles.
The DOTCs obligations during the construction phase included granting Metro Rail access to
the Project site (including relocating squatters and other persons from the Depot area) and
ensuring that certain work to be performed by the Department of Public Works and Highways
(DPWH) was completed properly and on time. In addition, the DOTC accepted the
responsibility for certain events that could delay completion of the system. Should such events
occur, DOTC would be responsible for paying the costs of the event and the delay it causes, and
the date by which Metro Rail is obliged to complete construction would be adjusted.
After completion, Metro Rail was obligated to lease the system to DOTC, who would operate the
system, with Metro Rail providing the maintenance. DOTC was required to make payments of
Rental Fees to Metro Rail, and these were broken down into several different portions. One
significant part was intended to repay the loans taken out to finance the Project (Debt Rental
Fees).







Organizational Structure