MANILA, Philippines - The planned fare increase of the Light Rail Transit 1 (LRT-1) train system next month is a done deal, according to militant group Bayan.
Bayan Secretary General Renato Reyes said the LRT fare hike is a requirement under the public-private partnership or privatization deal entered into by the Aquino government and the Light Rail Manila Consortium (LRMC) of Ayala and Metro Pacific.
There will be guaranteed increases for the 25-year contract, Reyes added.
He said that the contract the private concessionaires are given a notional fare to ensure the profitability of the private takeover.
"If the actual fares approved by the national government are lower than the notional fare, the private concessionaire can demand a fare hike or can ask the government to cover the deficit," Reyes said.
"Right now, the LRMC is saying that the current fares, which were increased last January, is only 90 percent of the notional fare agreed upon at the start of the contract. This means that a fare hike can be implemented after the LRMC takes over the operations of LRT 1 next month," he said.
Reyes said Bayan will question the legality of the profit guarantee or regulatory risk guarantee before the court because it means that despite government regulation, the private concessionaires are allowed to impose and collect the fare hike.
"The contract allows private operators a 10.25-percent fare increase every two years and a 5-percent increase upon the completion of the extension project," Reyes said.
Under the contract, Reyes said the government will be paying up to P64 billion for the real property taxes for the 32 year duration of the deal.
"The Aquino government has placed the Filipino people in a situation that will drive us deeper in debt for the next 25 years," he said.