LRT-1 to seek 10-percent fare hike under new president

The private sector operator of Light Rail Transit Line 1 (LRT-1) will seek a 10-percent fare increase in August this year, in line with a contract it signed with the government, according to a shareholder.

Light Rail Manila Corp., led by Metro Pacific Investments Corp. and Ayala Corp., won the P65-billion public private partnership (PPP) deal that calls for the extension of the 20.7-kilometer LRT-1 in Metro Manila to Cavite province. It assumed operations of LRT-1 in September last year.

David Nicol, chief financial officer of Metro Pacific, said the next fare increase is slated for August 2016, and would be around 10 percent, subject to regulatory approval.

Nicol said that under the PPP contract, fares would be adjusted every two years. Railway fares were last adjusted on Jan. 4, 2015. It should have come in 2014, but this was pushed back due to the unpopularity of the move.

“The contract is clear,” Nicol said at the sidelines of Metro Pacific’s first quarterly briefing on Thursday. He added that the group was aware that this hike was coming close to the shift in the country’s leadership in June.

“This is about a month into the new administration. This will be a test [for the new government],” Nicol said.

Light Rail Manila is investing to expand LRT-1 by another 11.7-km to Bacoor, Cavite. It has locked horns with the government in the months since winning the contract, saying the train line’s condition was worse than what was earlier acknowledged. Light Rail Manila earlier sought P1.8 billion in compensation, which the government, through the Department of Transportation and Communications, is disputing.

Light Rail Manila argued that the amount was fair and would go toward helping rehabilitate the LRT-1 in Metro Manila that would cost about P10 billion over the next two years.

The LRT-1 opened in the early 1980s, making it Southeast Asia’s oldest metro rail system. Its last fare increase before the 2015 adjustment was in 2003.

The line served an average daily ridership of 419,081 for the first quarter of 2016, an improvement of 11 percent since Light Rail Manila Corp. took over in September 2015.

The company noted that out of the 100 light rail vehicles committed to be delivered upon the takeover, only 77 were in safe operating condition. Since the handover of the LRT-1, the company has restored 14 more as of March.