The Department of Transportation and Communications (DOTC) will hold a public hearing on the fare increase initially set at P5 this year and another P5 next year for Metro Manila’s three elevated railway systems after the Light Rail Transit Authority (LRTA) board reaffirmed last month a 2011 resolution to raise rates.
“We just reconfirmed the decision that was made two years ago because the rate hike was not implemented,” said Hernando Cabrera, board secretary of the LRTA.
The increase is part of the DOTC’s plan to reduce costly subsidies from the money-losing train lines.
The public hearing, which could be held over two days, is crucial as this will help determine the extent of the rate increase, Cabrera said.
Transportation Secretary Joseph Abaya said in a text message that the plan was still to increase fares at the Light Rail Transit (LRT) Lines 1 and 2 and the Metro Rail Transit (MRT) Line 3 by “roughly P7 to P10 on the average which will be split over two years.”
“It depends on the formula of how the average is computed,” he said, while reiterating that the department had yet to set any date for the public hearings.
Abaya said in an interview in June that the DOTC planned to split a P10 average fare hike into two equal parts—P5 this year and P5 in 2014. The original plan was to implement the first increase in August.
Cabrera noted that following the public hearing, the fare matrix itself would need to be published and its effectivity to come 15 days after.
Huge subsidies
The long-planned increase, which continues to face stiff opposition, was meant to reduce billions of pesos in subsidies every year and to bring rates at the railways closer to that of bus lines, which charge about P40 on the average.
The current fare at MRT, which runs through Edsa, Metro Manila’s main highway, is pegged at a maximum of P15 per passenger. For LRT 1, passengers are charged up to P20 each for a single journey; for LRT 2, the rate is pegged at P15.
The plan, announced by Abaya in June, had gained fresh attention after it was endorsed by President Aquino in his State of the Nation Address on Monday.
Abaya noted that it cost government P60 to ferry a single passenger from end to end at MRT—well above the P15 maximum ticket price. For LRT, the cost is about P40.
Thus, the difference is shouldered by the government as a subsidy, which for MRT 3 alone translates to about P7 billion to P9 billion every year.
In his speech, Aquino questioned whether it was fair for all taxpayers to bear the burden of railway losses in Metro Manila.
“Whether you live in Mindanao or Visayas, and not once have you ever stepped into the LRT or MRT, you help to fund this,” he said on Monday.
Overcrowding
The increase comes as the DOTC moves to address overcrowding at the trains. For example, MRT 3 was designed to serve 350,000 passengers per day, but some 600,000 people cram the system daily.
LRT 1 is a 20.7-kilometer elevated track that runs from Baclaran, Pasay City, to Roosevelt in Quezon City. LRT 2 is a 13.8-km track that starts at Santolan in Pasig City and runs through Recto in Manila. MRT 3 is a 17-km elevated railway that starts at North Avenue in Quezon City and runs through Taft Avenue, Pasay City.
Part of this effort involves buying new train cars but even that has been hit by a recent controversy, namely, allegations that certain DOTC officials had attempted to extort $30 million from Czech train manufacturer Inekon Group last year.
Bidding review
Abaya said on Sunday that the DOTC would review the bidding terms for the P3.77-billion deal to expand the capacity of MRT 3 by 48 train cars from the current 73-car fleet. He said a rebid would be called if they found any anomaly.
A state-owned Chinese firm, Dalian Locomotive & Rolling Stock Co. CNR Group, which bid P3.76 billion, is now under “postqualification” after meeting all eligibility requirements on June 11.
Another Chinese firm, CSR Zhuzhou Electric Locomotive Co. Ltd., was disqualified while three other groups, including Inekon and Japan’s Sumitomo Corp., purchased bid documents but did not submit any offer at all, according to the DOTC.
Al Vitangcol III, the head of the MRT, took a leave of absence on Monday after he and several others were named by Czech Ambassador Josef Rychtar as having attempted to extort from Inekon. Abaya said the DOTC was investigating the matter.