Fare hike again? Lawmakers want to study LRT1 deal

MANILA, Philippines – Lawmakers on Wednesday, August 5, said they want to scrutinize the contract signed between the government and the Light Rail Manila Consortium (LRMC), following reports of a possible hike in Light Rail Transit Line 1 (LRT1) fares.

During a meeting of the House committee for Metro Manila development, Bayan Muna party-list Representative Neri Colmenares asked Transportation Undersecretary Jose Perpetuo Lotilla to respond to reports that the LRMC plans to discuss the possible fare hike with the government, following the terms of the deal signed in October 2014.

LRMC was the winning bidder of the LRT1 Cavite extension project. It will also take over the operations and maintenance of LRT1. 

Lotilla could not confirm or deny the possible fare hike, saying he was not aware of the report. But he confirmed that there is a clause in the government’s 32-year concession agreement with LRMC that allows raising fares for the LRT1 by 10.25% every two years.

In response, Colmenares said that the government has “contracted away” the people’s right to oppose any proposed fare hike.

“Usually when public utilities want to raise their rates, they have to justify it. But for the LRT, even if production costs do not increase, you already committed in the contract to raise fares?” he asked.

Colmenares added: “So if people oppose it, and even if the people’s opposition is justified, fares will still increase because you committed to it. Isn’t it that you contracted away the people’s opportunity to oppose the fare increase?”

The party-list representative added that this was an added burden to commuters, whom he said were already surprised by the fare hike imposed last January.

Defending the contract, Lotilla said the government still has the prerogative of deciding whether or not to enforce a fare hike.

“In any contract, there are always economic assumptions that have to become true in order for the contract to be fully enforced,” Lotilla said in an interview after the hearing.

Meanwhile, Caloocan Representative Edgar Erice asked the transportation department to provide the House committee with a copy of the contract so lawmakers could scrutinize the terms of the deal.

“Let’s look at the contract and not jump to conclusions….I think there are annexes to the contract that will justify the rate increase,” he said. – Rappler.com