DOTr says MRT3 fare increase ‘inevitable’ even without privatization

An increase in the fare of Metro Rail Transit Line 3 (MRT3) would be inevitable even without its privatization due to the rising cost of spare parts and electricity, the Department of Transportation (DOTr) said Wednesday.

In a radio interview, DOTr Undersecretary Cesar Chavez made the clarification after fare hike concerns were raised due to the agency’s plan to privatize MRT3’s operations and maintenance in a bid to improve its services.

“Even under the government, kahit sa ngayon, minsan ay hindi maiiwasan ang fare increase not because of private support o private intervention. Sapagkat tumataas ang halaga ng mga piyesa sa buong mundo, tumataas din ang kuryente,” he said in a Super Radyo dzBB interview.

(Even under the government now, sometimes fare increases are unavoidable, not because of private support or private intervention, but because the cost of spare parts are increasing worldwide, as well as electricity.)

“It is not only necessary but inevitable that at a certain point in time, ay kinakailangang itaas ang pamasahe. Ang tanong na lang, magkano ang itataas at ano ang kapalit nito–magandang serbisyo,” he added.

(It is not only necessary but inevitable that at a certain point in time, we need to raise the MRT fare. The only question is, how much will it be and what will it bring in return–good service.)

The plan to privatize MRT3 is one of the proposals being studied by the government as the Metro Rail Transit Corporation's build-lease-transfer contract is set to end in 2025.

Chavez said the discussions on such a plan are still at the DOTr level and will eventually proceed to the National Economic and Development Authority (NEDA).

“Posibleng magkaron tayo financial adviser para mas technically and financially competent ang maga-advise satin kung anong pwedeng business model ng MRT3 by 2025 and beyond,” he said.

(It is possible that we will tap a financial adviser to advise us more technically and financially competently on the possible business model of MRT3 by 2025 and beyond.)

Chavez also disclosed that the government pays about P150 million per month to sustain MRT3’s maintenance and operations. MRT3 earns P80 million to P150 million monthly, thus the need for a big government subsidy.

He, however, said there is a limit to the government’s operation of MRT3 maintenance, particularly in the procurement of spare parts and capital spares.

“Batay sa [Republic Act] 9184 at sa Commission on Audit, makakabili lang ng capital spares at ordinary spares yearly,” he said.

(Based on RA 9184 and the Commission on Audit, capital spares and ordinary spares can only be purchased annually.)

“It will take at least eight months na makarating dito pagkatapos ng procurement…Ang gobyerno limitado kapag annual budgeting procedure ‘yan. Pero ‘pag private sector, multiyear bulto-bulto pwede sila mag-procure. Therefore, mas nagiging efficient sa kanila,” he added.

(It will take at least eight months for the spare parts to get here after procurement...The government is limited when that’s the annual budgeting procedure. But in the private sector, they can procure in bulk multiyear. Therefore, they become more efficient.) — RSJ, GMA Integrated News