Bayan Questions Anomalous MRT/LRT Fare Hike in Public Consultations (PR)

News Release
February 5, 2011

The umbrella group Bagong Alyansang Makabayan today reiterated its opposition to the MRT/LRT fare hike as it criticized the Aquino government for its plans to reduce subsidies for train commuters. Bayan is participating in the two-day public consultations on the fare hike held at the LRT2 depot in Santoan, Pasig.

“The first round of consultations showed us the real intent of the fare hike. It is not meant to improve services. The fare hike is meant to pay billions of pesos worth of onerous debt obligations and pave the way for the eventual privatization of the train line,” said Bayan secretary general Renato M. Reyes, Jr.

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“The current fares are in fact enough to pay for the salaries and the maintenance and operations expenses of the train lines. The single biggest expense for the train lines is debt servicing. The Aquino government, through the DOTC and LRTA, now want to place this burden squarely on the people,” Reyes added.

Bayan said that the LRTA admitted that the MRT was able to generate P1.9 billion from rail and non-rail sources in 2010 which was more than enough to cover the P645 million operating costs. “However, the train line needed to pay P7.8 billion in debt due the built-lease-transfer agreement. This is where the P6.6 billion government subsidy goes to. To paying for the sovereign guarantees of debts and the guaranteed profits of the private firms,” Reyes said.

“We are already paying for this debt through our taxes. Now government wants to burden us again through a fare hike. Instead of passing the debt burden to consumers, government should endeavor to renegotiate and cancel onerous contract terms that are disadvantageous to the people. The Aquino government has chosen the easier thing to do, charge commuters instead of confronting the banks and private investors,” he added.

Why only P12 million?

Bayan also questioned why the MRT only earned P12 million in non-rail revenues in 2010.

“Despite the numerous malls, billboards and countless ads that we see along the MRT line, it boggles the mind why the LRTA only earned a measly P12 million? This is just 0.62% of their total revenues. How did it end up like this?” Reyes asked.

“Why doesn’t LRTA go resolve this issue first and collect government’s dues from the private ventures before raising commuter fares? It is ridiculous that government can’t collect from big business that’s why it is now trying to squeeze the poor commuters,” he added.

Bayan said that in some countries, non-rail revenues can go up as much as 20% and more. It said that this could be enough to cover the rail’s additional expenses.

LRT1 need not raise fares

The LRT 1 and LRT lines meanwhile raised as more than P3 billion in revenues, enough to cover some P2.9 billion in maintenance and operating expenses. “Ye the LRTA tells us this is not enough because they need to pay a whopping P3.5 billion in debt obligations. Again, government subsidy for this train line goes to paying interest and principal payments that enrich the pocket of the big banks,” Reyes said.

“The LRT 1, even without a fare hike, will still have an excess of P23 million in revenues. However, since it is in effect subsidizing the expenses of LRT 2, even the LRT 1 needs to raise fare,” Reyes explained.

Bayan announced that mass protests are set during the month leading to a major mobilization at the end of February.

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