Planned MRT, LRT fare hikes in 2013, passing of burden of government debts to commuters

Renato Reyes of Bayan said the government is heavily subsidizing the MRT and LRT because of the onerous contracts and loan guarantees it entered into with foreign banks and investors as part of a public-private partnership project.

By ANNE MARXZE D. UMIL
Bulatlat.com

MANILA –As if the incessant oil price hikes, and its corresponding impact on prices of basic commodities, is not enough burden for majority of the Filipino people, the Aquino government is again pushing for fare hikes in the country’s train system. Department of Transportation and Communication (DOTC) secretary Manuel “Mar” Roxas has said, during the 2013 budget hearing at the House of Representatives last Thursday, Aug. 23, that the fares for the Metro Rail Transit (MRT) and the Light Rail Transit (LRT) will be adjusted next year to enable the government to “subsidize infrastructure programs in the countryside.”

Quoted in a news reports, Roxas said, “It will be unfair for the areas in the provinces if we continue to subsidize Metro Manila as we have done so for the past ten years.” He called it a “fairness issue” and said the money can be redeployed to the countryside.

Last year, the DOTC proposed a fare hike for the MRT and LRT but several progressive groups strongly opposed it. The proposed increase is at least 100 percent, the fare from Taft Ave. to North Ave. would increase from P15 ($0.35) to P30 ($0.71). https://www.bulatlat.org/2011/01/13/outrage-by-mrt-lrt-commuters-can-avert-great-train-robbery-groups-say/

Passing the burden

Different progressive groups lambasted the secretary’s statement saying that the unjust increase in MRT and LRT fares is anti-consumer.

“Why does the government think that it would be unfair for Metro Manila commuters – most of them low-income employees, workers and students, some of them coming from nearby provinces to contribute to the metro’s productivity – to enjoy affordable and efficient transport services? What this fare hike aims to achieve is to once again pass greater debt burden to commuters,” Anakpawis vice chairman Fernando Hicap said.

Hicap added, “They announce this candidly as if incessant hikes in oil prices and basic utilities are still not enough to weigh down the ordinary Filipino. Foreign banks and big businesses – the regime’s real bosses – are set to gain from the fare hikes by minimizing so-called regulatory risks. Sacrificing the people’s interests in the name of profit seeks to attract more investors in the regime’s Public-Private Partnership (PPP) ventures.”

The Riles Laan sa Sambayanan (Riles) Network, a broad alliance of groups and passengers against MRT and LRT fare hikes said the government’s plan to increase fares to as much as P30 ($0.71) will be a burden to the passengers.

Renato Reyes, Jr., Bagong Alyansang Makabayan (Bayan) secretary general said the increase is unjust and will be a tremendous burden to ordinary commuters who depend on the MRT for fast and efficient transportation going to work and schools.

The groups vow to conduct massive campaign and protest actions should Roxas push through with the planned fare hike. “The public was able to halt the implementation of the fare hikes last year with our protests. Sec. Roxas’ announcement means that we have to continue and even intensify our protests against this huge burden,” said Sammy Malunes, Riles Network spokesman.

Vencer Crisostomo, Anakbayan national chairman meanwhile said “the MRT and LRT are public utilities, and the riding public should not bear the brunt for profiteering businesses operating these services.”

“Commuters benefit from the relatively cheaper train fares. Half of its passengers are students and those whose income is lower than P10,000 ($232) a month,” he said. He added that the planned increase is “without basis” and slammed Roxas for his plan to “railroad” the hikes without deliberations and consultations.

MRT and LRT passengers are from the working class, students as well as unemployed. The MRT line 3 traverses Edsa while LRT 1 is from Baclaran to Monumento where almost 500,000 passengers in each train station ride every day. The MRT’s current fare is P15 ($0.35) from Taft Ave. to North Ave. while the LRT charges P12 ($0.28) to P19 ($0.45).

Subsidize the countryside?

Roxas justified the fare hike by saying that the government will fund infrastructure projects in the countryside. Hicap questions Roxas’ motives behind the funding of infrastructure projects. “Is he referring to the MRT-7 project, where his family stands to gain from the $1.235-billion project to be constructed over Araneta property?”

The MRT-7, which will run from Tungkong Mangga, San Jose del Monte City, Bulacan to SM City North EDSA, linking up with the Light Rail Transit (LRT) Line 1 and Metro Rail Transit (MRT) 3, is also being opposed by Anakpawis and various urban poor and farmers’ groups because it would mean the eviction and dislocation of hundreds of families in the target areas. The billion-dollar project is also seen as President Benigno S. Aquino III’s ultimate concession to Roxas for accepting the DOTC portfolio.

Meanwhile, Reyes pointed out that the main reason why the subsidy for the MRT is huge is because of the onerous contracts entered into by the government, which have resulted in massive debts for the train system. “These were the result of the contracts between the national government and the private contractors, a kind of public-private partnership that failed. These debts are now being paid for by the national government and eventually the commuters, once the fare increases.”

Crisostomo said the government is actually burdening commuters with a a questionable debt, after it assured contractors and private operators of MRT and LRT with superprofits.

Reyes explained that the original proponents of MRT were private local and Japanese corporations, which formed the consortium Metro Rail Transit Corp. (MRTC). “These investors made a killing with the MRT because the government guaranteed payments to the banks that financed the project, which included the Export-Import Bank of Japan, Sumitomo Bank, and other Japanese and Czech banks as well some local financial institutions like the Bank of the Philippine Islands (BPI).”

Furthermore, he said, the deal was made more financially onerous because the owners of these banks that provided a loan of $462.5 million in 1998 and the private firms that constructed the MRT have the same investors. On top of the guaranteed debt payments, government also guaranteed that the MRTC will get 15 percent return on investment (ROI) per annum.

“The government is telling us that an efficient train system like the MRT should not be cheaper than other modes of transportation like buses. The government forgets that it is operating a service that is different from buses, taxis and jeeps, which are private businesses. On the issue of fairness, government is employing a divide and rule tactic by repeating the fallacy that provincial taxpayers are the ones subsidizing the MRT when it is the national government that is subsidizing the MRT,” Reyes said.

Reyes then pointed out, “Let’s be clear on one thing: the fare hike will be used primarily to service MRT’s debts. The fare hike is being used to fill the gap as a result of the subsidy reduction. As such, the fare hike will not lead to an improvement of services,” he added.