FIVE REASONS WHY WE OPPOSE THE LRT/MRT FARE HIKE

Posted: January 24, 2011 in Economy
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Bayan opposes the provisionally approved fare hike for the LRT and MRT because of the following reasons:

  1. There is no need for a fare hike. The present fares can already cover the cost of operation and maintenance of the LRT and MRT. The additional fares government wants to implement are only meant to increase the direct burden of commuters in paying the creditors. The DOTC said that the rule of thumb for big infrastructure projects like the LRT/MRT is that debt accounts for 85 percent of the cost. This is the obligation of the National Government and not the commuters, who as taxpayers are already servicing such debts. The MRT debts, in particular, have been also proven to be onerous. It is thus a double injustice for the commuters to pay more to service these debts when the just thing to do for government is to seek remedies including the possible renegotiation of the terms with creditors.
  2. The fare hike is anti-poor. According to the Mega Manila Public Transport Study of 2007, almost 68 percent of regular LRT/MRT commuters earn just less than P 10,000 a month. Such income is just within the range of the minimum wage rates in Metro Manila. Forty-five percent of the commuters earn below the minimum wage. The new fares will cost a minimum wage earner who is a regular LRT/MRT user as much as 16 percent of his income. Put in the context of increasing fares in alternative modes of transportation, prices of food and other basic goods, etc. – not to mention the chronic job scarcity – the LRT/MRT fare hike is unconscionable.
  3. Public infrastructure is not business. Government should not consider as losses the subsidies it provides to LRT/MRT users. Instead, these must be deemed as public investment that will provide the economy and its human resources new or additional capacity. The viability of public infrastructures is measured not in narrow financial terms but in terms of net social and economic gains. Besides, the losses stem not from commuters paying less than the operation and maintenance costs of the LRT/MRT. The losses are the results of burdensome contractual and loan obligations that previous governments inked with the private sector.
  4. There are other ways to ease fiscal pressure. We recognize that there is an urgent need to address the fiscal woes of government. But this should not be at the expense of the already hard-pressed masses. Instead, government must negotiate with creditors to find ways on how to lessen the debt burden. Government must seriously look into the many projects funded by onerous debts and were bloated by corruption. Further, creative ways to improve the non-rail revenues of the LRT/MRT, which at present is only less than 3 percent of the total, should be pursued and maximized.
  5. Fare hike is first step to privatization. Government admits that the long-term plan for LRT/MRT is privatization. Thus, the fare hike can also be seen as a scheme to entice potential investors and showcase the profitability of the rail system. But we already have around three decades of experience under privatization that includes water and power utilities. Since last year, we have seen how insecure we remain in our energy and water needs despite the manifold increases in user fees under privatization. The fiscal crisis, which privatization was supposed to help address, has not only lingered but even worsened. The same predicament is true in many countries around the world where corporations have taken over public utilities and infrastructures. #

 

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  1. […] secretary-general Renato Reyes Jr. outlined five reasons why the public should derail the fare […]