All mass transit systems are subsidized by gov’t

THE HEADS of both the Light Rail Transit (LRT) and the Metro Rail Transit MRT) are talking about increasing their fares because the government is losing money in subsidizing their operations. The government pays P40 for every rail passenger in addition to the fare he pays, they said. This subsidy comes from the taxes paid by all taxpayers, even those from the boondocks, and not only from the taxes paid by those who use the rail lines, they said, and it is unfair to use the taxes paid by the former to subsidize the fares of the latter. So they have no choice but to increase their fares.

Not so fast. All mass transit systems in the world, whether elevated rails or the regular trains or the city-operated bus lines, are subsidized by their governments. Because the mass transit systems are, as the name implies, for the masa, the poor. They are meant to transport the biggest number of people quickly at the least cost to them. If these transit systems were to charge their passengers what it costs to transport each one of them, they wouldn’t be able to afford it or they wouldn’t be willing to pay it. For example, if the LRT or MRT were to charge each passenger what it costs to transport each of them, which is, according to them, P50 per, that would cost each passenger P100 round trip, almost half of the day’s wages of a laborer. This laborer would be working only for the light rail transits, leaving little for his family.

All governments subsidize their people, in one form or another. That is the service they deserve in exchange for all the taxes, direct or indirect, that they pay. That is what a government is there for. It is not correct to say that the taxpayers of Mindanao or North Luzon are subsidizing the fares of light rail passengers in Manila. The taxpayers of Metro Manila also pay for subsidies that go to the people of Mindanao and North Luzon, like health care, feeder roads and free or cheap rice.

Let’s go back to why the light rails were set up in the first place. They were set up primarily to decongest the streets below. It was hoped that the LRT and MRT would take passengers away from the buses and jeepneys which have been making the streets hell on earth. With fewer passengers, there would be fewer buses and jeepneys clogging the streets. They would go elsewhere where their services are needed, as in the provinces.

But no such thing happened. As we can see, Edsa is still clogged with buses and Rizal Avenue with jeepneys because the light rails cannot carry all the people who want to ride them. As we can also see, the coaches of the elevated trains are bursting with people packed like sardines, and many more are left waiting in the train stations. Because the companies do not have enough trains and coaches.

Through economies of scale, the government can reduce the subsidy by transporting more people by having more trains and coaches. But the companies refuse to buy more of them. Anyway the government pays for the profits that they don’t earn from their passengers.

Right from the very beginning, it was known that the trains would not earn enough to pay for the costs of operation. That is why the government guaranteed to pay the private corporations the profits they could not earn from their passengers. In other words, the government went into the venture with its eyes open. It knew from the very beginning that it would have to subsidize the trains. The government would get back its subsidies in the improvement of the economy when goods and people are transported quickly and cheaply.

And so that the private train operators would earn more and lessen the government subsidy, the original plan was to have small shopping malls and parking lots at every train station, where people with cars could park their vehicles for a small fee, and ride the trains to their destinations. The operators would earn extra from the parking fees and from the rentals in the shopping malls. They were also given the authority to rent out the advertising spaces in the stations, under the elevated rails, and inside and outside the trains themselves to earn more.

But while the advertising aspect was implemented, the parking and shopping mall versions were not. What for, when the government was subsidizing its operations anyway?

One more thing, the huge lot at the end of the MRT line on Edsa, opposite SM North Edsa, was supposed to be used for MRT trains. Instead, it was sold or leased to Ayala, which built the Trinoma shopping mall. To whom did the money go? If the land is being leased, to whom is Ayala paying?

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May I suggest that new MMDA Chair Francis Tolentino and the new LTFRB chair stand on Edsa for several minutes one day and watch the buses passing by. They would notice that all the buses, running bumper-to-bumper, have very few passengers, even during rush hours. How do they earn enough to continue operations? If each bus has only very few passengers, then the bus must be losing money with each trip. So how can they continue operating day in and day out? There is only one logical explanation: they are overcharging their passengers. The fares authorized by the LTFRB are too much. So that the few passengers are actually paying for all the empty seats.

Why do the bus operators, even those from the provinces, insist on operating in Metro Manila even as colorums where they run with very few passengers, whereas their services are sorely needed in the provinces? Because there is more profit operating in Metro Manila, even with fewer passengers. How do they do it? Because they are charging their few passengers more than what is fair to the latter, and that is courtesy of the LTFRB. –Neal Cruz, Philippine Daily Inquirer