More oppose fare hike

INQUIRER FILE PHOTO / RICHARD A. REYES

MANILA, Philippines–A commuter group and party-list lawmakers have joined calls to stop the fare increases in Metro Manila’s elevated train lines, saying the costlier daily commute was “unjust” and “oppressive” to minimum wage earners as the adjustments were enforced without public consultations.

In separate petitions, the United Filipino Consumers and Commuters’ Inc. (UFCC) and Bayan Muna on Tuesday asked the Supreme Court to halt the enforcement of the fare hike at the Metro Rail Transit (MRT) Line 3 and Light Rail Transit (LRT) Lines 1 and 2, accusing the transportation secretary of grave abuse of discretion in enforcing the increases.

The petitions followed two suits against the fare hike filed separately on Monday by Bagong Alyansang Makabayan and former Iloilo Rep. Augusto Syjuco.

Bayan Muna Rep. Neri Colmenares, said the Department of Transportation and Communications (DOTC) must account for the P120.7 billion the government had poured into Metro Rail Transit Corp. (MRTC), the owner of the 25-year build-lease-transfer (BLT) contract of MRT 3, the rapid transit line system traversing Edsa, before jacking up the fares.

Colmenares said LRT 1, LRT 2 and MRT 3 were generating close to P2 billion in operating revenue annually, belying DOTC’s claims that these trains were operating in the red.

“Malacañang is taking the people for a ride because there is no need to increase fares. Annual MRT and LRT revenues outstrip operation expense so it is deceptive for government to insist that it is losing. MRT earned P2.2 billion in ticket sales and only spent P1.8 billion in operation expenses last year. LRT earned P2.5 billion but only spent P1.03 billion for operation expenses,” Colmenares said in a statement.

In a petition for certiorari and prohibition, UFCC impleaded the DOTC, MRT Corp. and LRT Authority (LRTA), saying Transportation Secretary Joseph Emilio Abaya committed grave abuse of discretion in enforcing the hike.

‘Un-Christian’ move

The group scored the respondents for the “un-Christian” move, citing the lack of consultations before the fare hike was announced just before the holiday break.

“Public transportation is critical to this nation’s economy and future. A properly managed mass transport system will definitely contribute to a stronger economy and progressive nation,” UFCC said in its petition.

“Unfortunately, however, nothing can be more un-Christian than to honor the birth of our Lord with a message of added hardship for our people. Especially considering the fact that the DOTC did not even have the conscience to consult commuter groups and the public as required for such an undertaking before announcing these increases,” the petitioners said.

Seeking legal relief three days after the fare increases took effect, Bayan Muna Representatives Colmenares and Carlos Isagani Zarate, Bayan Muna members Imelda Luna and Carl Ala, and blogger and commuter Anthony Ian Cruz asked the Supreme Court “to void and permanently enjoin the implementation of the rate hike” and to issue an immediate temporary restraining order against it.

Named respondents in the petition were Abaya, MRT 3 officer in charge Renato San Jose and LRTA Administrator Honorito Chaneco.

Greed, mismanagement

“It is not the subsidies and the present fare rates that render life miserable for the Filipinos but the inordinate greed of the private investors, the mismanagement by the government, including the respondents,” the petition said.

“The fare hike is oppressive to the low income workers/commuters who comprise the largest number of the passengers and is violative of the social justice provision of the Constitution; government subsidy and light rail fare rates must be based on the ability to pay of the minimum wage earners,” the petition said.

The fare hike of between 50 and 87 percent at the three metro rail lines took effect on Jan. 4, just as employees and students prepared to go back to work and school after the Christmas holiday break.

The trains, which serve an estimated 1.2 million passengers daily, now charge a base fare of P11, with an additional P1 for every kilometer.

Abaya said the fare increase would support improved maintenance of the trains, which recently figured in successive accidents due to poor upkeep.

No public hearing

In their petition for certiorari and prohibition, the Bayan Muna lawmakers and members said Abaya issued the Dec. 18 department order enforcing the hike “without notice and hearing to the stakeholders and the public.”

They asked that the order be annulled and set aside.

In his statement, Colmenares said that even DOTC officials, in their testimony during the House budget hearings, were in agreement that revenues for both LRT and MRT were bigger than their operating expenses.

Colmenares said the DOTC officials had admitted that the MRT was losing money because the revenues were used to pay income taxes of concessionaires and their guaranteed loans.

The lawmaker said the government pumped more than P120.7 billion into MRT in the past 10 years alone (the government had a five-year grace period) or more than four times its original project cost of P28 billion in 1999.

For that amount, the government could build two more MRTs at current prices. Colmenares said the original private owners of MRT pumped in only P7 billion, with the balance of P21 billion borrowed from foreign banks.

Group of investors

The project started in 1995 during the Ramos administration with a group of investors led by the Fil-Estate group of Robert John Sobrepeña.

It was completed in July 2000 during the Estrada administration. The project was valued at $675.5 million. From 1995 to 1998, the peso exchange rate fell from an average of 25.71 to the dollar in 1996 to 40.90 to the dollar in 1998.

P600-M monthly payment

In a radio interview, Abaya explained that any savings from the fare hike would be used to reduce the government’s P600 million monthly payment to MRTC as part of its BLT contract in 1999.

This is unlike the LRT 1 and 2 systems where all savings from the fare hike would go to the administrator to spend for operations, maintenance and other capital expenses.

Buyout plan

This was the reason the government was pushing to buy out the MRTC-MRTH (MRT Holdings) from MRT and pursue the arbitration case filed in 2009, which would allow the government to exercise its equity value buyout exit clause in the BLT contract, according to Abaya.

Abaya said that once the government takes charge of MRT’s finances, it could immediately slash borrowing costs to 3 or 4 percent from the 15 percent embedded in the contract.

Abaya said MRTC’s refusal to hand over control to the government was the reason it was blocking government’s plan to bring in 48 new coaches for MRT.

He said the government had rejected offers from the private sector to take over the MRT because while it would relieve the government of any expenses, it would mean passing the full cost to commuters.

“I’m not saying that all businessmen will get your whole arm after giving them your hand,” said Abaya, who noted that President Aquino had already issued an executive order way back in 2013 to execute the buyout.

Colmenares said the P600 million monthly payment to the private concessionaire was the reason the contract had been tainted with irregularities.

“It is the government which entered that sweetheart deal which is the reason why it is losing. Why will they pass on their sin to the public? They should deal with the problem and jail negotiators who handled that contract,” Colmenares said.

Unconventional contract

Abaya said that the MRT contract was unconventional from the very start as the private company owned the facility but the government operated it; the private party took care of the procurement of facilities but the government was responsible for paying for it.

“This is the first time I saw this kind of setup. It’s usually good practice that the one who procures is also the one who pays. It will not be difficult for the one procuring to make a deal. It raises a lot of questions,” said Abaya.

He noted that a government takeover of the maintenance contract, which was widely criticized, had done away with this bad practice. “We should ask them (MRTC), why insist on this setup and not an open and transparent one?”

Shell company

Abaya described MRTC as a “shell company” after selling out its future revenue earnings to a new group, MRT Holdings, which was majority-owned by government banks. “In fact, if we require (MRTC) to pay or make an upgrade, I think it will have a hard time.”

Abaya pointed out that the MRT rail tracks needed replacement as early as 2008 when then contractor Sumitomo Corp. noticed vibrations. Once the tracks and signaling system were upgraded, Abaya said the MRT could double its speed from 40 to 60 kilometers per hour.

The transportation secretary said that up to the present, the MRTC merely presented to the DOTC a one-page proposal of “generalisms” on its plan to overhaul the MRT while it was going around media outlets giving sound bites.

Onerous

For Colmenares, the MRT’s contract should have been declared void for being an “onerous contract consummated against the interest of the people and disadvantageous to the government.

“Secretary Abaya is correct when he says it is difficult to understand the corporate layering in MRTC because it is untransparent. But if it (contract) is void, it should be voided whether it is going to end in one year’s time or ten years’ time,” Colmenares said.

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