A modern, fast and reliable railroad system that can transport commuters and cargo over long distances is a major factor that will open new real estate markets outside Metro Manila; will mitigate massive human congestion therein and stimulate economic growth in the countryside.

But with the way the Philippine National Railways (PNR) rehabilitated the Southrail Line – from Tutuban to the Bicol Region – what we have is a railroad system that is neither modern, fast nor reliable.

If our railroad system is to live up to its full potential, its modernization should be left in the hands of the private sector. And if there’s one company that has the motivation, vision, ability and financial muscle to do it, it is Ayala Corporation.

Let’s look at the timeline:

1987: During former President Fidel V. Ramos’ visit to Los Angeles, US financial and industrial giants Bechtel Enterprises and GE Capital signed a memorandum of understanding (MOU) with Ayala Corporation signifying their entry into a US$600 million railroad project.

… Dubbed the MCX or Manila-Calabarzon Express, it was to provide commuter and freight service between Metro Manila and the southern provinces of Luzon… Additional phases in the plan include extending the line to the southern port of Batangas City thus linking it to the deep-water port of Manila. An additional lateral section can connect Lucena City in the east to Sangley Point, Cavite in the west thus opening up the entire southern Luzon area to a modern transport facility…

The plan didn’t push through. But the vision and motivation of Ayala Corp. for wanting to modernize PNR’s Southrail Line at that time will be clear if you consider the succeeding events.

1988: Ayala Corporation spun off its real estate division into a separate company, giving birth to Ayala Land, Inc (ALI).

1989: Laguna Technopark, a 387-hectare industrial park was opened by ALI together with two other multinationals, in response to the government’s call for private sector participation in countryside development. Technopark straddles Sta. Rosa and Binan, Laguna and is now home to almost 100 of the biggest manufacturing/assembly corporations in the Philippines.

1990: Known for high-end commercial, office and residential projects primarily in Makati, ALI decided to test the middle-income housing market by establishing Laguna Properties Holdings, Inc. (now known as Avida Land)

LPHI acquired a 400-hectare property from the Yulo family in Sta. Rosa, Laguna and developed it into Santa Rosa Villages, San Jose Village and later, the Santa Rosa Estates. These were followed by various projects in Batangas and Lucena City in Quezon.

1995: A consortium of five local companies was formed to acquire controlling interest in what would later be called Metro Rail Transit Corporation Ltd. to develop and maintain EDSA MRT 3. These were Fil-Estate (a real estate company), Ayala Land, Inc., Anglo Philippine Holdings Corp (that owns National Bookstore among others), Ramcar (the car battery company that also owns Kentucky Fried Chicken, Mr. Donut and Tokyo Tokyo) and Greenfield Development Corporation (of the Camposes who own Unilab).

Anglo Philippine Holdings has minority stake in Shang Properties, Inc, the upscale developer of The St. Francis Shangri-La Place, The Shang Grand Tower, Shangri-La Plaza Mall, The Enterprise Center (in Makati) and currently, One Shangri-La Place – all are within spitting distance from MRT 3.

Greenfield is one of the biggest landowner in the country. Together with ALI, it has controlling interest in Bonifacio Global City. It has vast properties in Laguna. It is currently focused on its 11-hectare mixed-use development along Shaw Boulevard called the Greenfield District, just across Shangri-La Plaza, again just a stone’s throw away from MRT 3.

1999: EDSA MRT 3 started operation

2001: North Triangle Depot Commercial Corporation was incorporated by three of the original consortium-members of MRT 3 – Fil-Estate, ALI and Anglo Philippine Holdings Corp – to develop the 20-hectate TriNoma Mall. Did you know that this mall sits directly on top of MRT’s huge depot?

2005: ALI and Greenfield Development Corporation formed a joint venture to develop Ayala Greenfield Estates – a 350 hectare upscale residential development in Calamba, Laguna with an 18-hole, par 72 championship golf course designed by Robert Trent.

2007: Ayala Land launched Nuvali, a 1,800 hectare mixed-use development that straddles the cities of Sta. Rosa, Calamba and the municipality of Cabuyao in Laguna. It is envisioned to become the Makati Central Business District of the South. It is one of the country’s most ambitious real estate projects that will be completed in 30 years. The various residential developments in Nuvali are handled by its three units – Ayala Land Premier, Alveo and Avida.

April 2010: ALI established its fourth residential unit, Amaia Scapes, this time for the class C market. It offers house and lot packages from P605,000 to P1.25 million. Currently, Amaia has developments in Cabanatuan, Pampanga, Cavite, Laguna, Lipa, Batangas and Negros Occidental.

December 2010: The Inquirer announced that Ayala Corp was looking into the possibility of participating in the development of the PNR’s (Southrail Line) service to Southern Luzon up to Legazpi City in Bicol.

… the PNR line can directly link the Makati central business district to suburban communities being developed by ALI in areas in Laguna… It’s logical for them to participate in the development of that corridor. They have a lot of developments near the PNR line.

So far, nothing new has come up regarding this plan.

August 31, 2011: ALI puts up its fifth residential unit, the South Maya Ventures Corp. to cater to the largest but most neglected segment of the housing market – the underprivileged and homeless. Called “socialized housing,” each unit will cost P400,000 and below. Its first project was scheduled for launching within the last quarter of this year in Gen. Trias, Cavite. To remain feasible, expect succeeding projects to be located farther down south where lands are cheap.

The timeline indicates the following:

1. Bechtel’s and GE’s MOU with Ayala Corp. in 1987 to construct the MCX railroad project was meant to lay the groundwork for the latter’s future projects in Laguna. The freight service was certainly partly intended to transport cargoes to and from the various locators in Laguna Technopark. The commuter service was meant to “pull” its early middle-income real estate projects closer to Metro Manila.

With hundreds of real estate projects that have sprouted in Laguna and other provinces in the south since, plus the seventeen economic zones in Laguna alone, a modern railroad system is imperative and feasible now more than ever.

2. MRT 3 illustrates that those who have the greatest motivation to invest in transportation infrastructure are big commercial, office and residential real estate developers whose properties lie near this transportation line. An improved transportation increases demand for and, therefore, value of their properties.

It also indicates that ALI has the ability and experience in building and managing a modern transportation infrastructure.

3. With the pattern of its real estate developments, ALI clearly sees the high growth potential of the South Luzon Corridor. It is the only big developer that has invested a very large part of its resources south of Metro Manila. ALI probably knows something that other developers don’t.

The private sector is motivated to participate in the construction of transportation infrastructure not only because of the revenue they will gain from it but more importantly, because of the boost it gives in the demand for and value of their real estate developments.

And with the way Ayala Land has lined up many of its projects near PNR lines, it shall reap the biggest benefit from a modern railroad system in the south.

Thank you so much