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Monday, July 14, 2008

 

EXCLUSIVE

Bad contract derails MRT 3

Commuters see no respite from jampacked trains

By Darwin G. Amojelar, Reporter

A railway contract that supposedly has put the government at great disadvantage is delaying expansion plans for the Metro Rail Transit Line 3, or MRT 3. The railway line runs from North Avenue in Quezon City to Baclaran in Pasay City.

Roberto Lastimoso, the general manager of Metro Rail Transit Authority, or MRTA, which operates MRT 3, said the plans to expand the railway line were drawn up three years ago but have been stalled by objections from Metro Rail Transit Corp., or MRTC, which owns the assets of MRT 3.

Another option of the government to expand the capacity of MRT 3, Lastimoso added, was the buyout of equity of the railway line. Negotiations with MRTC in May bogged down, however.

“In a buyout, we can follow our expansion plans,” the Metro Rail chief said.

MRTC is a consortium led by the Sobrepeña family’s Fil-Estate Management. Other investors include Ayala Land Inc., Anglo-Philippine Holdings Corp., Ramcar Inc. and Greenfield Development Corp.

“The contract [with MRTC] is onerous to the government . . . [the contract says] that any improvement, any alteration, in the design and improvement in [MRT 3] facilities should have the consent of the owners,” Lastimoso said.

He added that the government cannot procure additional trains for MRT 3 because MRTC has the right of first refusal under the contract.

MRTC, however, has no plans to purchase additional trains, according to Lastimoso. The railway consortium’s stand, he said, has led MRT 3 to seek the legal opinion of the Department of Justice on the government’s plan to buy more trains through the Department of Transportation and Communications.

MRT buyout

Buying out MRT 3 was raised because the government can no longer afford to subsidize the railway line’s operations. The government is paying the Sobrepeña-led consortium $3.33 million a month representing equity payment and $1.43 million a month for maintenance costs.

The government, through the Transportation and Finance departments, entered into an agreement with the consortium to buy out the build-lease-transfer (BLT) contract of the MRTC for $865 million, ahead of the period stipulated in the concession agreement.

The early buyout will result in $380 million in savings for the government, according to the Finance department. An earlier study, though, showed that the savings can run to $1 billion.

Lastimoso said if the government failed to buy back MRT 3, it would pay $10 million in monthly equity payments by 2010 and $1.6 million for maintenance costs.

If the negotiations bogged down again, the two parties will maintain the BLT contract guarantee of a 15-percent return on investment. The contract stipulated that the consortium should be paid for 25 years.

The government’s plan to buy more trains stemmed from commuter congestion at MRT 3 stations as a result of higher fuel prices and record-high inflation. Costlier fuel and food have forced many, including car owners, to use trains and other public vehicles to save on expenses.

MRTC must negotiate

According to Lastimoso, the Justice department last week issued an opinion, directing the Sobrepeña-led consortium and MRT 3 to negotiate within 30 days.

“We will follow it [the department’s opinion], because we have a contract [with MRTC],” he said.

“The [Justice department] said this [30 days] is the reasonable period for [the Transportation department] to assume that MRTC is not interested anymore to exercise its right of first refusal,” Lastimoso added.

The consortium has until August 9 to decide if they will purchase additional trains.

Its officials were unavailable for comment when contacted by The Manila Times.

“The situation [procurement of more trains] is a matter of public interest, public concern, and it is dangerous already [given the passenger congestion]. The government will buy [the trains] if they [members of the Sobrepeña-led consortium] will not acquire additional trains,” Lastimoso said.

The Metro Rail chief added that the government intends to buy 73 light-rail cars with three minutes headway or four-car trains with 2.5 minutes headway, which cost $3 million each.

“We are ready [to buy] but it will take another three years if you will order a new car from the time you order and to the time of delivery. We are looking at second-hand cars,” he said.

At present, MRT 3 uses three-car trains with three minutes headway.

The additional trains are expected to be delivered by 2009 and will be operational by 2010.

Lastimoso said MRT 3 has exceeded its daily passenger capacity.

He explained that the railway line is designed to carry only about 22,500 passengers per peak hour per direction, or PPHD, but that existing demand has ballooned to 26,500 passengers. The maximum load of 22,500 was breached in 2004.

Data from the Metro Rail showed that from April to June 2008, the number of passengers rose 11.26 percent to 37.17 million, with a monthly average of 12.39 million and a daily average of 470,000 passengers.

During the first quarter of 2008, the number of passengers grew by only 2.24 percent to 36.08 million, compared to the 35.29 million during the same period in 2007.

Lastimoso said “emergency capacity expansion” is needed to meet the projected per peak-hour demand of 30,031 passengers by 2010.

MRT 3 was built to speed up the commute and alleviate chronic traffic congestion along Epifanio de los Santos Avenue, or EDSA. But the current capacity of the railway line is inadequate to meet the first goal, let alone the second. The line’s tracks run almost the entire stretch of the avenue.

Currently, MRT 3 has a fleet of 73 Czech-made air-conditioned cars, of which up to 60 three-car trains operate daily. The trains run at a top speed of 65 kilometers per hour to cover 13 stations in about 30 minutes, stopping for 25 seconds to 35 seconds per station.

Lastimoso said the government plans to expand the North Avenue station to prevent passenger congestion there. The station is the northernmost in the MRT 3 line.

“We have to increase the area of the North Avenue station, because it is not a terminal, it was designed to be a station but it has become a terminal,” he added.

The government plans to spend P100 million to acquire a 500-square meter land beside the North Avenue station and put a two-story building there.

Extended peak hours

To decongest its stations during peak hours, MRTA has decided to extend operations between 6:30 a.m. and 9:30 a.m. and between 5 p.m. and 8 p.m.

At present, the peak hours are between 7 a.m. and 9 a.m. and 5 p.m. and 7 p.m., during which 20 three-car trains leave every three minutes.

At the North Avenue station, the busiest station during the 7 a.m. to 9 a.m. rush-hour period, about 23,000 to 25,000 passengers climbed onboard going south.

Beyond peak hours, Lastimoso said, the system uses 15 three-car trains that roll on every five minutes.

He added that Tespi Corp., the maintenance operator of MRT 3, has granted the request of the government to extend the peak-hour period and for the operator to deploy additional trains at no cost.

Lastimoso explained that under the contract of Tespi, for every additional car used beyond the peak hours, the government will pay $1,000 per car. “If you need 15 cars, its $15,000 per hour.”

The government is also studying deployment of additional trains beyond the peak hours to ease overcrowding in the stations.

“We encourage passengers to come early to avoid overcrowding,” Lastimo­so said. He announced that the government has no plans to raise fares.

Lastimoso said public subsidy amounts to P42 per passenger. With a daily ridership of at least 470,000, the government pays at least P19.74 million a day at the minimum fare of P10 per person.

MRT 3 collects an average of P4 million to P5 million a day.

   

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