No LRT1 fare hike under Aquino’s watch – Abaya

MANILA, Philippines – There will be no hike in Light Rail Transit Line 1 (LRT1) fares, as the government will fund the remaining rail tariff committed to the private-sector winner of a deal to expand and operate the train system.

“Clearly, there will be no fare hike because the government is in a position that it can pay that difference off,” Transportation Secretary Joseph Emilio Abaya told reporters on the sidelines of a briefing on Thursday, August 6.

Abaya responded to reports that the Light Rail Manila Consortium (LRMC) – led by Metro Pacific Investments Corporation (MPIC) and Ayala Corporation – could implement another rate hike as only “90% of what is committed under the concession agreement” has only been implemented.

According to Abaya, the transportation department will compensate LRMC for the difference instead of implementing another fare increase. (READ: Aquino says reasonable to hike MRT, LRT fares)

“Assuming the remaining hike committed to them is P0.50 centavos. The count will be P0.50 times the number of passengers that will ride the train. If no one rides, why should we pay them?” Abaya said, when asked how much it will compensate LRMC for the difference.

LRMC, the winning bidder of the LRT1 Cavite Extension project, will take over LRT1 operations and maintenance by September. 

“As to how long there will be no fare hike, the real decision will now be up to the next [transportation] secretary,” Abaya said.

In December 2014, the Department of Transportation and Communications (DOTC) approved the fare hikes for the 3 major train lines in Metro Manila, after several years of deferment.

Under DOTC Department Order No. 2014-014, the uniform distance-based fare scheme for all 3 train lines – or an P11 ($0.25) base fare plus P1 ($0.0223) per kilometer – was adopted.

In October last year, LRMC signed together with the DOTC and the Light Rail Transit Authority (LRTA) a 32-year concession agreement for the P65-billion ($1.42-billion) LRT1 Cavite extension and operations and maintenance project.

The project was formally awarded to DOTC and LRTA following the submission of a lone bid with a premium of P9.35 billion ($204.27 million).