Palace approves MRT, LRT fare hikes

MANILA, Philippines – Days after the toll rates on several road networks were hiked, railroad commuters in Metro Manila face an impending fare increase, too.

Malacañang has approved “in principle” the proposed fare hikes in Metro Rail Transit (MRT) and the Light Rail Transit (LRT), the rail networks that connect different parts of the country’s capital.

The fare increase will be “slight,” “won’t be that much,” and is “reasonable,” described Presidential Communications Strategy Secretary Ricky Carandang during a press conference on Wednesday afternoon.

On Wednesday morning, Carandang said the economic cabinet cluster submitted a study on the MRT fare hike to the Palace. “It (fare hike) has been approved,” Carandang said.

Transportation Secretary Jose de Jesus said the fare increases will be implemented after the LRTA board, which is the final approving body, meets and approves it on January 11.

Carandang and De Jesus declined to provide the how much will the fare increases be.

“We need to work out the details of when, how the increases are going to take effect,” Carandang said.

Reasonable increase

Despite the new fare metrics, Carandang said MRT commuters will still afford the new fares.

“Nothing more than what you will spend for other means of transportation… Right now, [the] MRT is not the most expensive means of transportation. [After the fare increase, ] it will remain not to be the most expensive,” he said.

Government officials earlier said the new train fares would range between P21 and P25. Some said the higher end of the range may be reach P30.

The current maximum train fare is P15 — way below than the real cost of an MRT and LRT trip, which is about P48.

The new rates are not far from the amount that commuters pay when they take a bus to travel the same distance.

“I think they are reasonable,” Carandang said.

The government expects to save P2 billion a year from the hike in train fares, which will minimize the amount of money the state spends to subsidize the MRT and LRT’s operations.

The government spends P7 billion a year to subsidize MRT operations.

Priorities

The Palace has delayed increasing fares at MRT and LRT as they waited for the completion of a rail study, which a transportation official previously described as a comprehensive analysis of ridership during lean and non-lean months, and potential non-rail revenues, among others.

Carandang said the decision to hike train fares was “a choice we don’t like to make” but the government has to prioritize how to spend its meager resources.

“The entire country is subsidizing the train ridership of Metro Manila,” he noted.

“And a sustained subsidy (of train ridership in Metro Manila) is very expensive. We have scarce resources. Do we subsidize the riding public of Metro Manila or find projects that will benefit the whole country?” he stressed.

“The priority of the Aquino government, Carandang shared, is “to spend the meager resources of government on programs that a broader segment of the country can benefit from,” he added.

However, the government has more leeway in increasing train fares compared to the much-vilified toll rate increases in road networks that link to Metro Manila.

“The structure of ownership in MRT is very different from the structure of ownership in SLEx,” Carandang explained. He was referring to the South Luzon Expressway, which connects Metro Manila to provinces in the south.

The government has an economic and ownership interest in MRT through state-owned banks.

SLEx, on the other hand, is operated by a private firm that invested in the construction and improvements of the toll road in exchange for regular — but regulated — toll hikes.

“These are contracts that this government has to abide by,” explained Carandang.

Honoring contracts inked with private firms have placed prominently in the government’s agenda as it aims to attract investors to take part in its Public-Private Partnership (PPP) scheme.

Investors eyeing PPP projects will assume the task of building and financing priority infrastructure projects in exchange for reasonable returns on their investments.

Toll hikes here to stay

As Filipinos ushered in the New Year, a series of increases in transportation costs in Luzon have greeted them.

Higher toll rates were implemented in key expressways that connect the country’s capital to neighboring provinces.

At the South Luzon Expressway (SLEx), an over 200% toll rate increase was implemented last January 1. The Palace had said SLEx private operator South Luzon Tollways Corp. (SLTC) agreed to this discounted toll hike as a response to mounting complaints against the target 300% hike.

The full new rate hike of 250%, however, will be implemented in April.

Higher toll rates also greeted commuters at the 85-km North Luzon Expressway (NLEx), the 94.5-km Subic-Clark Tarlac Expressway (SCTEx), and the 8.5-km Subic Freeport Expressway (SFEx) on January 1.

Rate hikes at these privately operated road networks were lower. Toll hike at the NLEx was only 11%.

Taxi, bus fare hikes

To cope with the higher toll fees, bus companies operating in the metro and provinces in South Luzon are seeking a 30- to 50- centavo per kilometer fare hike.

On Wednesday, South Luzon Bus Operators Assoc (SOLUBOA) filed a fare hike petition of 50 centavos per kilometer.

As fare hikes require consultation processes and several hearings at the Land Transportation Franchising and Regulatory Board (LTFRB), the SOLUBOA has asked for a provisional 30-centavo hike.

Aside from the toll increase at the SLEx, the group cited rising fuel prices as another cost consideration.

Meantime, the flagdown rate for taxi commuters within Metro Manila will also be raised.

Last December 23, the LTFRB has approved the petition of taxi owners to increase the flagdown rate from P30 to P40, the first increase since 2004.

On top of the higher flagdown rate, taxi passengers will also have to pay P3.50 (from the previous P2.50) for every 300 meters

Impact on inflation

The Bangko Sentral ng Pilipinas has earlier said that it has factored these anticipated increases in toll rates and train fares in its projected inflation rate for 2011.

Inflation rate projections for 2011 was raised to 3.6% from the original 2.4%, BSP Deputy Governor Diwa Guinigundo previously said.

The forecast inflation already factored in the following:

* an P8 increase in the price of a Light Rail Transport ticket by January 2011
* a P10 hike in the price of a Metro Rail Transport ticket for commuters taking the rail line from the North Avenue Station in Quezon City all the way to Edsa Station in Pasay City
* the expected 12% value-added tax on tollways.
* the anticipated 60-centavo increase in bus fares

–abs-cbnNEWS.com