Palace mulls light rail fare increase

THE Aquino administration plans to increase the fares in the country’s mass rail systems, citing higher operational expense and subsidies from the government. “I think it is time for the fares to go up. [But] there will be a lot of factors to be considered.

We will try to complete the study within August,” Transportation and Communication Secretary Jose de Jesus said, referring to the Light Rail Transit Line 1 and 2 and the Metro Rail Transit 3.

The Metro Rail Transit Authority (MRTA), the operator of the MRT 3 is considering to increase the maximum fare to P25 from P15.

The MRT 3 runs from North Avenue in Quezon City to Taft in Pasay City.

Reynaldo Berroyo, general manager of MRT 3 had said that the government is shelling out $3.3 million a month as equity payment and $1.67 million for maintenance costs to Japanese operator Tespi Corp., a subcontractor of Sumimoto Corp.

He added that the government subsidy amounts to P48 a passenger.

With a daily ridership ranging from 420,000 to 430,000, the government is estimated to be spending at least P20.46 million a day given the minimum fare of P10 a passenger.

The Land Bank of the Philippines and Development Bank of the Philippines (DBP) earlier acquired 75 percent of MRT Holdings Inc.—a private consortium that owned Metro Rail Transit Corp.—through Goldman Sachs for an estimated $800 million.

The remaining 25 percent of MRT Holdings is held by private lenders, including Philippine Bank of Communications, Bank of Commerce and United Coconut Planters Bank.

Lesser hikes for LRTs
The Department of Transportation and Communications is also eyeing to raise the fares of LRT Line 1 and 2.

An earlier joint study by the National Economic and Development Authority (NEDA) and the Japan for International Cooperation Agency (JICA) recommended a fare hike of at least P2 for LRT 2 to cover operating expenses.

The LRT Line 1 charges P12 for the first four stations and P15 for the rest of the route.

Line 2, on the other hand, imposes a fare of P12 for the first three stations, P13 for four to six stations, P14 for seven to nine stations, and P15 for 10 stations.

The Megatren, or the LRT 2, traverses five cities in Metro Manila (Pasig, Marikina, Quezon City, San Juan and Manila), all along the major thoroughfares of Marcos Highway, Aurora Boulevard, Ramon Magsaysay Boulevard, Legarda Street and Recto Avenue.

The LRT 1 stretches 15 kilometers on elevated tracks, servicing the Taft Avenue to Rizal Avenue route between Baclaran, Pasay City and the Bonifacio Monument in Caloocan City.

The MRT 3 traverses EDSA from North Avenue, Quezon City to Taft Avenue in Pasay City.

Meanwhile, Finance Secretary Cesar Purisima told reporters that the fares of the three mass rail systems would surely increase and the only question is when will it take place.

“We are only choosing between increasing user’s pay through fare hike, so that the government need not give subsidy; or continue the subsidy but will charge sales tax on the operation of the two entities,” he added.

Purisima said that when the government charges higher user’s pay, there would be no need for it to shoulder the expense of the rail systems in the form of subsidy.

If the government continues its subsidy for the rail systems, then it would charge taxes to level off the expense it would incur in giving the subsidy.

The Finance chief said that they would meet with de Jesus to tackle the matter.

“That [fare increase] has yet to reach the DOF [Department of Finance] level. That is the reason why we are meeting with Secretary de Jesus next week,” he added.

Currently, the user’s pay for the MRT 3 stands at P15 for its whole stretch while it is P20 for the LRT 1.

Purisima said that he would also recommend the privatization of the MRT 3.

Citing his meeting with Trade Secretary Gregory Domingo who co-chairs the National Development Co., he said that the Trade secretary is not keen on taking charge of the privatization of the MRT 3.

“But on the part of the DOF, we have the inclination to privatize the MRT,” he added.

The Finance chief said that if the MRT 3’s financial structure would be improved and its operations become profitable, “businessmen would step in.” –ARWIN G. AMOJELAR SENIOR REPORTER AND KATRINA MENNEN A. VALDEZ REPORTER, Manila Times