Privatization is not the culprit

It was back in 2011 when the government announced that it was undertaking its first infrastructure project under the public-private partnership (PPP) program of the Benigno Aquino III administration with the privatization of the entire maintenance and operation of the Light Rail Transit Line (LRT) Line 1.

- MARY ANN LL. REYES

Then in 2015, a private consortium led by Ayala Corp. and Metro Pacific Investments Corp. assumed the operation of LRT-1, taking over what it described as a severely deteriorated elevated train system. Previously, LRT Line 1 had been operated by the government through the Light Rail Transit Authority (LRTA) and the Department of Transportation and Communications (DOTC).

The Light Rail Manila Corp. (LRMC), which won the P65-billion contract to operate and expand LRT-1 all the way to Bacoor, Cavite over a 32-year period and was the lone bidder in the PPP deal, noted that it is the oldest train line in Metro Manila where maintenance has been a challenge over the years.

Last February, the Department of Transportation (DOTr) approved a price increase that will take effect on April 2.

According to LRMC, in the past 10 years of operating and maintaining the 40-year-old railway line, this will only be the second time that LRMC has been allowed to implement fare adjustments for LRT-1. LRMC has since introduced new trains, station upgrades and better service efficiency, and has completed Phase 1 of the Cavite Extension Project, opening the extension for commercial operations.

Under the concession agreement with the DOTr and LRTA, the company is allowed to adjust fares every two years. The LRMC requested fare adjustments in 2016, 2018, 2020 and 2022, but all were deferred. The deferred fare hikes resulted in a fare deficit of P2.17 billion as of November 2024.

Unfortunately, the recently approved fare hike for the LRT-1 has been criticized, with some blaming privatization as the root cause of what they call an unfair and unreasonable increase.