QnA on the approved MRT-LRT fare hike effective January 4, 2015

Posted: December 22, 2014 in Uncategorized
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How much will the new MRT and LRT fares be on starting January 4, 2015?

APPROVED LRT 1 FARE MATRIX FOR STORED VALUE AND SINGLE JOURNEY

Stations SV Fare SV Fare  SJ FARE SJ FARE
Baclaran Baclaran 29 Bclrn 30
EDSA 12 29 15 30
Libertad 13 28 15 30
Gil Puyat 13 27 15 30
Vito Cruz 14 26 15 30
Quirino 15 25 15 30
Pedro Gil 16 24 20 30
UN Ave. 17 23 20 30
Central 18 22 20 30
Carriedo 19 22 20 30
D. Jose 19 21 20 30
Blumentrit 20 20 20 20
Tayuman 21 20 30 20
Bambang 21 19 30 20
Abad Santos 22 18 30 20
R. Papa 23 17 30 20
5th Avenue 24 16 30 20
Monumento 25 15 30 15
Balintawak 27 13 30 15
Roosevelt 29 Rsvlt 30 Rsvlt

The current maximum fare for LRT 1 is P20 for stored value tickets. Under the approved scheme, the new maximum fare would be P29 for stored value and P30 for single journey tickets, a 50% increase from the current maximum fare. The LRTA says the average increase per commuter per trip, based on the average distance traveled, would be around P5.00 per trip or P10.00 for a round trip. Single journey tickets will come in P15, P20 and P30 and will be significantly more expensive than the fares for stored value tickets.

APPROVED LRT 2 FARE MATRIX

Stations SVFare SVFare SJFare SJFare
Recto Recto 24 Recto 25
Legarda 12 23 15 25
Pureza 14 22 15 25
V. Mapa 15 21 15 25
J. Ruiz 16 19 20 20
Gilmore 17 18 20 20
Betty-Go B 18 17 20 20
Cubao 19 15 20 15
Anonas 21 14 25 15
Katipunan 22 13 25 15
Santolan 24 Sntln 25 Sntln

For the LRT 2, the new maximum fare would be P24 for stored value tickets and P25 for single journey tickets, an increase of 66% from the current maximum fare of P15. Single journey tickets will come in P15, P20 and P25 values. The LRTA estimates that the average impact on commuters, given the average distance traveled, will be P6.00 per trip or P12.00 for a round trip. Those who have taken the LRT 2 know that most of its passengers are actually students studying in the university belt in Manila.

APPROVED MRT 3 FARE MATRIX OF SV AND SJ TICKETS

Stations Fare Fare
North Avenue North Avenue 28
Quezon Avenue 13 28
Kamuning 13 24
Cubao 16 24
Santolan 16 24
Oritgas 20 20
Shaw 20 20
Boni 20 20
Guadalupe 24 16
Buendia 24 16
Ayala 24 13
Magallanes 28 13
Taft 28 Taft

The maximum fare of the MRT 3 will go up from P15 to P28 for single journey and stored value tickets. That’s an 87% increase from the current maximum fare. The minimum fare also goes up from P10 to P13. According to the DOTC, the average increase per passenger per trip of the new fare matrix, based on the average distance traveled, would be a whopping P8.00 per trip or P16.00 for a round trip.

The fare increases are quite significant, especially since there is no corresponding increase in wages and salaries for working people.

What is the basis for the increase? Is there a legitimate ground for such fares? What is the basis of the computations? How were the rates approved?

The DOTC justified the increase by saying that the government should be reducing its subsidy for the train lines and that commuters should be the ones paying for the real cost of transportation. It invokes the neo-liberal notion of “user-pays” where government abandons the commuters to fend for themselves by removing subsidies.

The DOTC also said that the train fares need to be adjusted so that they would be closer to the fares of other land transport such as buses and AUV/FX. However, the DOTC failed to present any basis for their computations, other than the so called need to reduce government subsidy and the need to continue paying debts incurred in the construction of the train lines.

 

Should train fares approximate the fares for other modes of transportation?

This argument is obviously without basis, as the comparison is between apples and oranges. Land transport such as buses and AUV/FX are being operated for private profits. The train lines receive subsidy and are considered part of government’s service. These train lines are the fastest and cheapest means of transportation to bring workers and employees to their workplaces and to bring students to their schools. It is government’s obligation to provide this kind of service for working people and students because in the end, the whole economy benefits.

As for the question of subsidy, government says that the actual fare for the MRT is P53.96 but that commuters only pay an average fare of P12.40 while government subsidizes P41.56. How and why the “actual fare” reached P53.96, they do not explain.

What they don’t say is that government has been subsidizing the MRT at about P6-7 billion a year due to onerous contract terms.

Under the MRT’s Build Lease Transfer Agreement, the government has financial obligations in the form of Equity Rental Payments and Administrative Costs amounting to P5.504 billion and Taxes, Duties and Fees amounting to P2.088 billion. These debts are the result of an onerous contract during the Ramos administration that guaranteed the profits of the private developers. For example, the private developers were given a 15% guaranteed return on investment. The private owners are paid even if the trains were filled or not. Such were the demands of the private developers before “investing” in this so-called public-private partnership venture. In fact the loans of these private developers were also guaranteed by the Philippine government.

If the government thinks the subsidy is too much, then it should stop honoring the patently disadvantageous BLT Agreement which is the source of the financial woes of the MRT. It is this debt which is being passed on to the commuters via the proposed fare hike.

Is there a connection between the fare hike and the privatization of the LRT?

The LRT is not in a similar debt-ridden situation as the MRT. In their presentation in 2011, the LRTA showed that even without a fare increase, the LRT 1 would do just fine. It would still have an excess of P23 million at the end of the year.

However, the LRT’s operations and maintenance have been privatized as part of the LRT 1 extension project involving the Ayala Corporation and Metro Pacific. The guaranteed fare hike is actually a condition for the privatization of the LRT. The government also guaranteed a periodic increase in LRT 1 fares for the duration of the 25-year contract. It is the private concessionaire (Ayala, Metro Pacific) who will now be entitled to the collect the new fare increase.

Meanwhile, the LRT 2 will also soon be privatized. The revenues from the increases will again go to the pockets of private operators.

How much will be collected from the fare hike?

The MRT 3 hopes to generate an additional P1.122 billion in revenues from the fare hike. The LRT 1 and 2 hope to generate P942 million. That’s a total of P2.1 billion from the pockets of commuters going to the pockets of private corporations.

According to the DOTC, the additional revenues will be used to compensate for the subsidy reduction for the trains. It belies their own claims that the fare hike would result in improved services for the train lines. The fare hike will not go to train improvements.

What can we do?

Commuters and taxpayers should oppose the approved fare hike. We must undertake political and legal action to thwart these unjust impositions. Commuters should demand efficient and affordable mass transportation from the government. Privatization is not answer, rather it is the cause of the many financial and technical problems faced by our train lines today. Commuters must demand and end to the privatization of the train lines and push for the nationalization of the train system.

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