Emission centers posting heavy losses

The vehicle emission centers put up by the private sector are all incurring heavy losses because of the delay in the full implementation of the Clean Air Act.

This was revealed by several owners of the so-called private emission testing centers (PETCs), citing severe lack of volume to compensate for their huge expenses in rent or lease and salaries of workers.

The private sector put up these PETCs as provided for in the Clean Air Act of 1999 which virtually acknowledged the government’s incapacity to establish such facilities nationwide for lack of funds.

The capital requirement for each PETC easily runs to million of pesos since each lane costs at least P2 milliion. Nationwide, the amount is estimated to be around P1 billion.

But more formidable than the huge capital requirements are the risks that a PETC investor has to take.

Jim Velez, a PETC owner in Marikina, said: "We were required to build the facilities first and invest at least P2 million per lane even without any assurance that we would be accredited by the DTI (Department of Trade and Industry) and subsequently authorized by the DOTC (Department of Transportation and Communications)."

It took Velez more than two to three months to get the approval of both agencies. All that time, however, Velez had to pay the lease of the land, the salaries of his workers and other maintenance costs.

"Thus, the delay in the implementation of the Clean Air Act is aggravating our losses even further," Velez added.

Another PETC owner, George Bian, also noted the lack of any government-imposed limits to the number of PETCs that could be put up by the private sector.

"This means that a PETC owner may just suddenly end up competing with so many other PETCs mushrooming in his area, thus all the more reducing, not only his own business volume, but also those of his competitors. It that happens, we may all have to fold up or close shop, leaving to PETC around to do the testing of vehicles," explained Bian, owner of several PETCs in Mindanao.

"And as if our predicament is not enough, we, PETC owners, are allowed only a very short period to operate and recover our investments since the PETCs’ function is supposed to be take over in November 2003 by Motor Vehicle Inspection System (MVIS) facilities, which is being bid out to the private sector as mandated by the Clean Air Act," Bian added.