THE Aquino government played a Grinch role to commuters last Christmas when it announced that there will be a uniform rate increase for the MRT3 and the LRT1 and LRT2 train lines in the Metro. The Department of Transportation and Communications (DOTC) began implementing the new rates last Sunday which roughly doubled the fares for the 1.3 million commuters riding the trains daily.
Secretary Joseph Abaya and government apologists defended the increase and called it “necessary.” It will supposedly lighten government subsidy of the train companies. Abaya estimated that around a billion pesos from the additional income coming from the increase will go to the MRT Corporation as part of its agreement with the private concessionaire instead on upgrades on the line.
Bagong Alyansang Makabayan (Bayan) called the increase a “Great Train Robbery” and asked why the government is increasing the fares when Congress has already allocated money for upgrading of the MRT in the 2014 and 2015 budgets.
Bayan filed a petition earlier this week at the Supreme Court questioning the lack of hearings and grave abuse of discretion by the DOTC in approving the increases. There was no opportunity for consumers to scrutinize and question the details of the increase. Bayan pointed out that only an LRT Administration board resolution and supposed recommendations by the MRT3 Office were mainly used to decide the fare increase, both of which were neither published nor presented in any public hearing.
According to the research group IBON, the LRT and MRT lines are actually generating enough income to cover its operation and maintenance (O&M) costs. If one computes the farebox ratio, which is the ratio of its earnings to its O&M costs, the LRT1 and 2 lines gives an average of 1.10. On the other hand, the MRT3 has a farebox ratio of 1.17 in 2012. These numbers tell us that the LRT and the MRT lines are actually generating more than what was required by their charters.
If it is just as the government calls “users pay” principle, the users— consumers— are actually paying more for the service, however bad it is right now. As activist and former congressman Teddy Casino pointed out these farebox ratios are better than in industrialized countries where the farebox ratio ranges from 0.12 to 0.71 (US), 0.39 to 0.78 (Canada), 0.41 to 0.90 (Spain), 0.30 (Paris), 0.17 (Berlin), 0.91 (London).
What make the fare structure skewed are the terms entered into by the government during the Ramos administration in 1997. The government gave a sovereign guarantee to ensure a 15% return on investment in the build-lease-transfer agreement with the MRT Corporation.
IBON sees the increases as a way to make the LRT1, 2 and MRT 3 to be more appealing to new investors by making the commercial venture profitable. The LRT1 has been awarded last year to the Light Rail Manila Consortium (LRMC) for a P64.9-billion public-private partnership (PPP) deal. IBON warns that this deal will result in a similar guaranteed increases in fare throughout the 32-year concession agreement. The same problem is seen with the LRT 2 line which is also up for bidding next year under the government’s PPP program.
The government is hard pressed to explain why there is a need for the increases. They tried to justify it by alluding to a supposed inequity of having people of Mindanao and Visayas subsidize the railways in Metro Manila. Yet what the government is not admitting is its failure to develop more railways to connect the Mindanao and Visayas Islands with Luzon and each other.
It is not a matter of the rest of the country subsidizing Luzon but the government failing to expand mass transportation beyond the three light rail lines outside of Manila. What the government is doing is just to wait for investors to expand the rail lines which investors will do only when it is profitable.
The government’s failure to implement a mass transport solution in the country is the real problem. The government officials have abandoned their duty to provide cheap and accessible transportation for people and goods and instead surrendered these to profit- making companies. As they do that, mass transport ceases to be a normal means of moving people and instead becomes a privilege that you access only when you can pay. What is worse is that these fare increases not only make these public utilities less accessible to workers and students but it only serves to keep the high profit margins of private companies.
The same policy of privatization is being implemented in electricity, in water, in telecommunications and other utilities. This policy has only brought us ever increasing rates and not the service that we need. It is high time to make public utilities true to their “public” nature: government must be the one to build and maintain these services in order to make our lives and production easier.