Subsidy for Metrostar a must if...

The government will have to subsidize the Metrostar Express when it starts paying its amortization by July, an official of the Department of Transportation and Communications (DOTC) said yesterday.

The official who asked not to be named noted that if Metrostar would continue to have few passengers in the next five months, the government would be forced to provide subsidy to the firm for debt servicing.

"The government has made a commitment to pay so whether it is operating or not, we have to pay. It is up to the government now-the DOTC-to make sure that whatever is the deficit, it will be lessened," the source added.

The official maintained that the government could not abandon its obligations with Metro Rail Transit Corp. (MRTC) whether or not Metrostar is earning.

"The government will have to find ways to meet its responsibilities. It could not escape from its debts," the source said.

Metrostar has been in operation for a month now but it has not met its target passenger volume of 300,000 to 350,000 a day.

It was constructed by MRTC, a consortium of private corporations, under a 25-year Build-Lease-Transfer agreement with the DOTC.

At present, the daily ridership of Metrostar is only at 40,000 that can be translated to P800,000. This amount is short by more than P8 million short of the P9 million target daily revenue.

Metrostar is expected to incur a daily operational cost of P2.5 million when the entire system fully opens up to Taft Avenue in Pasay City. It is presently in operation from North Triangle, Quezon City to Buendia in Makati City.

MRTC Board Chairman Robert John Sobrepeña admitted that despite of the low ridership of Metrostar, DOTC "is expected" by international lenders to start paying the $100-million annual amortization by July.

The consortium took loans from various lending institutions abroad when they constructed the 16.8-kilometer Metrostar.