More fare hikes loom for LRT-1

By RG Cruz, ABS-CBN News

Posted at Jan 08 2015 04:06 PM | Updated as of Jan 09 2015 02:42 AM

MANILA - The LRT-1 fare hike, which was implemented alongside the fare increases in the LRT-2 and MRT-3 earlier this week, is actually just the start of more fare hikes for the LRT line 1.

Transportation Undersecretary Jose Perpetuo Lotilla confirmed that there is a clause in the concession agreement between the government and the MPIC-AYALA consortium for the LRT-1 extension that mandates a 10% increase in fares every two years.

Lotilla made the confirmation during the interpellation of Bayan Muna Rep. Neri Colmenares of Department of Transportation and Communications (DOTC) officials who were invited to the congressional investigation of the MRT/LRT fare hike.

"Hindi lang ito ang increase. As per kontrata, may increase every two years," Colmenares said.

Lotilla replied, "Yes, there's a clause."

The concession agreement is for 32 years.

In a subsequent ambush interview, Lotilla clarified: "Kasi parang yung binid out nating kontrata, ganun yung terms, para siyempre kasi ikaw negosyante you would want to see a parang basis to say whether you'll make money out of it or not..."

"Kung let's say government, for policy reasons, says no won't allow increase this year, government will top up nung amount, parang ano yan classification kontrata material adverse government action."

Lotilla also admitted that no law prescribes how the fare hike will be imposed.

"Walang law that says this is how this should be done, regulated, or that this should be the basis. But we follow basic rules on constitutionality (and) reasonableness... What it just means is law is silent. Since we're government anyway, we still take the extra mile always. That's why we hold consultations even though walang mandate to do that."

In the same hearing, Lotilla also admitted that the DOTC has no jurisdiction to increase fares.

The transportation official was asked by Dasmarinas Rep. Elpidio Barzaga what the rules and regulations were governing the implementation of the fare hike. Lotilla said there was none.


DOTC Secretary Joseph Abaya was not present during the hearing, prompting criticism from Colmenares.

"May we know why the secretary isn't present today to face the people but is always in the media where no one can interpellate him?" Colmenares said.

Lotilla explained: "With apologies to Congress, the secretary is right now involved in the preparations for the papal visit. Because of the meetings he had to attend, he had to request to be excused from today's hearing."

Colmenares, however, was not satisfied with the transportation official's answer, saying the meeting for the papal visit could have been done yesterday.

"Pwede naman kahapon, bakit tiniming sa hearing na ito? Isang meeting that could have been done earlier, parang di malinaw yang ganyang sagot. Parang umiiwas si Secretary Abaya dito eh," he said.

Ako Bicol Partylist Rep. Rodel Batocabe tried to intervene and said that the DOTC officials present may be enough if they speak for the department.

But Colmenares insisted, "If we do follow the line of Cong. Batocabe, no member of executive will go here during hearings... Executive should be here to explain major policy issues."

"I ask the secretary to be invited in the next hearing and we don't expect an 'I don't know' answer, 'I don't have documents,' 'We're going to study it.' Wala kayo dapat sabihin na di namin alam," he added.


Meanwhile, DOTC Underscretary Rene Limcaoco justified the fare hike that was implemented earlier this week.

Limcaoco said the fare increase is unpopular but necessary to achieve medium and long term visions of DOTC.

"The country will have to build 11 more lines and line extensions in order to accommodate 3.5 million person trips per day. 3.5 million will mean 23% to 24% of our person trips will be using mass transit rail, which will bring to same levels of our neighbors such as Korea, Singapore, Thailand," he explained.

"The fare hike is just one of the actions or one of the several solutions that are necessary in order to achieve this goal at the end of our program," he said.

Limcaoco named the 11 lines: LRT-1 extension to Bacoor and the additional extension to Dasmarinas, LRT-2 to Masinag and North Harbor, Malolos-Caloocan line, Calamba-Caloocan line, MRT-7 to feed north of Metro Manila, Taytay to Ortigas-line to compliment Masinag line to open up eastern portion of Metro Manila, the Manila bus rapid transit traversing Quezon boulevard and C-5 bus rapid transit which will compliment EDSA MRT-3.

"If we don't have fare hike, there's subsidy of P35 to P40 per person. If we don't have fare hike, upon completion of all lines, subsidy, additional subsidy of P22 billion. Sheer economics necessitate fare hike. This is one of the solutions to achieve goal of mass transit for greater population of Metro Manila," Limcaoco said.

Government believes that the additional revenue will mean a decrease in the subsidy of government for each passenger, freeing up more money that can be reallocated to other projects of government.

Government officials presented the following data to lawmakers during the hearing.

Right now, the LRT lines 1 and 2 have a deficit of P4.7 billion while the MRT-3 has a deficit of P7.25 billion.

Revenues from the fare hike would mean incremental revenue of P942 million for the LRT 1 and 2 and P1.122 billion for the MRT-3.

This brings down the deficit for the LRT 1 and 2 to P3.7 billion and P6.12 billion for the MRT-3.

Government argues that even with the higher MRT/LRT fares, these will still be cheaper than or at par with taking jeepneys, buses and FX.

For the MRT-3, the expense per passenger is P53.96, with passengers paying an average of P12.4 while government subsidizes P41.56. For the LRT 1 and 2, the cost per passengers is P34.74, of which passengers pay P14.28 while government subsidizes P20.46.


Bayan secretary general Renato Reyes, for his part, pointed out that there is no clear government agency that regulates fare hikes for the MRT and LRT.

"Walang malinaw na ahensiya... Wala po kaming nakita doon," he said.

Quezon City Rep. Winston Castelo said he would ask Malacañang to certify as urgent the bill that proposes the creation of the Rail Regulatory Board (RRB) "to supervise, oversee, and regulate" the country's railway system.

Castelo made the statement after the DOTC said that only the railway transport sector does not have a regulatory body to oversee rail transport issues, including fare hikes.

Castelo authored House Bill 5313, or the Rail Regulatory Board Act of 2015, which pushes as state policy the provision of "efficient, affordable, and comfortable means of travel" and empowers the RRB to set and approve fares and other costs for all transport system that uses rails and tracks.

Meanwhile, Colmenares noted that the revenues of the MRT and LRT exceed the operating expenses.

"Sa aktuwal niyo di sinusubsidize pasahero, pashero nagsusubsidize sa MRT, LRT kasi lampas," he said.

Lotilla, however, clarified that because of the contract with the private concessionaire for the MRT-3, it also has to pay the private contractor a 15% guaranteed return to the MRTC.

Colmenares then remarked that the subsidy then is not for the passengers but for the private concessionaire.

"Binabayad nilang ticket sobra-sobra sa pasahero pero sisingilin sila ng dagdag imbes na contest ng kontrata na di makatarungan."

He said Lotilla made at least three fatal admissions against the MRT/LRT fare hikes.

"No.1 is that Usec. Lotilla admitted that the DOTC does not have the authority to increase fares, so the fare hike is illegal. No.2 he also admitted that the MRT/LRT makes profit and that the fare hike would go to the concessionaire. No.3 Usec. Lotilla also said that under the concession agreement for the LRT1 extension, this would just be the first fare increase and that there would be fares hikes every two years," he said.

"As it is I already moved for the Transportation committee to recommend the deferment of the fare hike pending the decision of the Supreme Court for the TRO. We will do all we can to stop these hikes because this is just the start of fare hikes especially LRT1," Colmenares added.