By Lawrence Agcaoili (The Philippine Star) | December 21, 2014

MANILA, Philippines - Even as they complain of long queues and poor service, passengers of Metro Rail Transit line 3 (MRT-3) as well as Light Rail Transit lines 1 and 2 (LRT) should brace for higher fares starting Jan. 4 after the Department of Transportation and Communications (DOTC) approved the fare hike.

Transportation Secretary Joseph Emilio Abaya issued Department Order No 2014-014 setting the new fares for the country’s three major mass transport system in the metropolis.

“It’s a tough decision, but it had to be made. It’s been several years since an increase was proposed. We delayed its implementation one last time until after the Christmas season. While 2015 will see increased fares, it will also see marked improvements in our LRT and MRT services,” Abaya said.

The DOTC has decided to adopt a uniform distance-based fare scheme for MRT-3 as well as LRT-1 and LRT-2 pursuant to the Medium-Term Philippine Development Plan.

“It is envisioned that this fare scheme will result in an equitable distribution of government funds currently dedicated to subsidizing the operations of the above rail lines in Metro Manila to much-needed development projects and relief operations in other parts of Luzon, the Visayas and Mindanao,” Abaya stated in the order.

The LRTA board earlier approved a formula in May 2011, fixing a rate of P11 base fare plus P1 per kilometer charged to passengers of the MRT and LRT.

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The proposed fare hike was revived when President Aquino said in his 4th State of the Nation Address in July last year that it was about time to implement the fare increase.

Using the formula, passengers of the 17-kilometer MRT-3 from North Avenue in Quezon City to Taft Avenue in Pasay City and vice versa would pay P28 for stored value and single journey tickets from the current fare of P15.

MRT-3 fares were lowered to a range of P10 to P15 from a range of P12 to P20 in 2000. When the mass transit system started operating in 1999, fares ranged from P17 to P34.

On the other hand, passengers on LRT-1 from Baclaran to Monumento would have to shell out P30 for single journey and P29 for stored value tickets from the existing P20 fare.

Likewise, passengers of LRT-2 from Recto Avenue to Santolan would have to pay P24 for stored value and P25 for single journey tickets from the current P15 fare.

The government last raised fares for LRT-1 to P15 in 2003 while fares of LRT-2 have remained unchanged.

Abaya said the failure to match fare adjustments with increasing operating costs caused by inflation have resulted in practically break-even finances for all three lines.

“In turn, this crippled their ability to invest in large-scale improvements for their facilities, since revenues have only been enough for day-to-day operational requirements,” he said.

Since government subsidizes around 60 percent of the cost for each LRT-1 and LRT-2 passenger and around 75 percent of each MRT-3 passenger, Abaya said an estimated P2 billion would be freed up for development projects and relief operations in other parts of the country.

“I’m referring to the vast majority of Filipinos outside of Metro Manila – those in other parts of Luzon, in the Visayas and in Mindanao, most especially those whose lives have been severely affected by typhoons and calamities. They will be the real beneficiaries of a more equitable distribution of these savings,” he added.

The projected savings is equivalent to 8,240 classrooms, 82 kilometers worth of farm-to-market roads or 11,440 hectares of irrigated farmlands.

Abaya pointed out the government shells out around P10 billion annually to subsidize the operations of MRT and LRT.

The MRT and LRT fare hike comes amid the rollback in the minimum jeepney fare from P8.50 to P7.50.

‘Gov’t to pursue MRT buyout’

The government has not abandoned its plan to take over the breakdown-prone Metro Rail Transit 3 despite the decision of the Senate to deny funding for it.

“The takeover-buyout plan is still an option, which I and Budget Secretary Butch Abad and Finance Secretary Cesar Puri- sima will pursue. That is our mandate from President Aquino,” Transportation and Communications Secretary Joseph Emilio Abaya told The STAR.

He said government buyout of MRT-3, the rail line along EDSA, is “still the most advantageous arrangement for riders and taxpayers.”

“Some people are out to derail this plan because they want to continue making money,” he said without elaborating and naming names. Abaya said he did not know yet how the takeover-buyout option could be

pursued. “We still have to discuss and flesh

this out,” he said, referring to Abad and Purisima.

But he added that the allocation of more than P6 billion for the purchase of the re- maining bonds of MRT Corp. (MRTC) could be the key to such an option.

The P6 billion is part of the P54 billion the House of Representatives has included in the P2.606-trillion 2015 national budget for the state takeover-buyout of MRT-3 next year.

Senators deleted the bulk of the P54- billion appropriation. They retained a small part, including P6 billion intended for buying the remaining 15-16 percent of MRTC bonds floated by private investors who built the EDSA rail line system.

Two state banks – Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP) – now hold more than 80 percent of such bonds. The two banks control MRTC, which owns MRT-3.

Isabela Rep. Rodolfo Albano III, who supports the takeover-buyout plan, said if the government is able to buy all of MRTC bonds, it should own the EDSA rail line and rehabilitate it without interference from the remaining private investors.

“The private investors claim that the government, by holding MRTC bonds, owns only economic interests, including revenues, while they, the investors, have ownership rights over the system that produce such revenues,” he said.

“To me, economic rights and owner- ship rights are one and the same thing, because when the contract between the government and private investors end in 2015, both of these rights and interests will accrue to the state. By then, the state will own the system,” he said.

He added that private investors would have no stake at all in MRT-3 after the expiration of the contract, no matter how they try to distinguish between economic and ownership rights.    – With Jess Diaz