DOTC eyeing control over MRT development to raise funds

MANILA, Philippines - The government plans to take control of rights to rent out business and advertising spaces in stations and properties of the Metro Rail Transit (MRT) to raise revenues to support the rail line’s operations without hiking fares.

Transportation Undersecretary for public information Dante Velasco said the government is looking into the non-rail revenues to reduce the huge subsidy to the MRT.

“It’s possible,” he said.

Speaking to reporters, Velasco said the government has a 76 percent interest in the MRT via the Development Bank of the Philippines and the Land Bank of the Philippines.

Development rights over MRT properties are now held by MRT Development Corp. (MRT Devco), an affiliate of the build-lease-transfer contractor MRT Corp., he added.

The Department of Transportation and Communications is investigating the MRT’s financial situation to determine the real state of affairs, especially the MRTC and MRT Devco’s obligations to the government, Velasco said.

The DOTC is trying to collect more than P1 billion from the MRT Devco in unpaid development rights on MRT spaces.

It had overpaid DOTC some P64 million in development rights payments, MRT Devco said.

Joker: Go slow on fare hike

Sen. Joker Arroyo cautioned yesterday Malacañang to go slow on its plan to raise the fares in MRT and the Light Railway Transit.

It would be best to wait for the recommendation of Congress before making any decision, he added.

Sen. Ralph Recto has filed a resolution in Congress calling for a probe into the planned fare hikes for the MRT and the two LRT lines.

“A mass transport system such as the MRT 3 and the two LRT lines is an essential government service,” read the resolution.

“The planned increases, therefore, would greatly affect the hundreds of thousands of commuters who rely on the prevailing low fares of MRT 3, LRT Line 1 and LRT Line 2 to get around Metro Manila.”

Arroyo said the executive cannot impose an arbitrary increase in the fares without a notice from Congress because the mass transit systems all operate by virtue of franchises issued by the legislature.

“In fact they are a monopoly. Since their operation is imbued with public interest, there must be some form of consultation first,” he said.

Arroyo said the subsidies given by the government for the three mass transit systems are taken up in the budget deliberations in Congress every year.

The subsidies for the mass transit systems would not have been an issue had Mr. Aquino not mentioned them in his State of the Nation Address, he added.

Arroyo said the hike in electricity rates and the forthcoming 250 percent increase in toll at the South Luzon Expressway, coupled with the planned fare hikes for the MRT and LRT would hit the people like a triple whammy.

“In one fell swoop, they increased the rates of the most commonly used transport system,” he said.

“One morning they wake up and without any warning the rates will increase. This has never happened before, these kind of rate increases.” Government subsidy for the mass transit systems is indispensable and part of good governance, Arroyo said.

MRT general manager Reynaldo Berroya denied yesterday any overprice in the rail line’s maintenance contract with Japanese contractor Sumitomo Corp. and its sub-contractor TES Philippines.

Speaking to The STAR, Berroya, said the monthly maintenance contract is around $1.4 million, not $2 million as previously reported.

It’s a reasonable rate, considering that it covered all maintenance expenses, including labor as well as acquisition of spare parts that are needed to assure efficient operations, he added.

Berroya said that the LRT’s monthly maintenance contract is P35 million a month, and P22 million a month for LRT Line 2. – Rainier Allan Ronda, Marvin Sy