LRT 1 now under Ayala, Metro Pacific management

By: Gil C. Cabacungan, Miguel R. Camus - 9 years ago

Light Rail Transit (LRT) Line 1. FILE PHOTO

A consortium between Ayala Corp. and Metro Pacific Investments Corp. assumed the operation of Light Rail Transit Line 1 (LRT 1) over the weekend, taking over what it described as a “severely deteriorated” elevated train system.

The 20.7-kilometer LRT 1, the first elevated commuter train in Metro Manila, stretches from the Muñoz station in Quezon City to the Baclaran station in Pasay City.

The move marks the first turnover of a train system under President Aquino’s public-private partnership (PPP) program.

The initiative has placed heavy focus on transport-related projects, like trains and expressways, to help combat massive traffic jams, like the multi-hour gridlock that struck Metro Manila on the night of Sept. 8.

Ayala and Metro Pacific-backed Light Rail Manila Consortium (LRMC) on Monday said it took over the operations and maintenance of LRT 1 on Sept. 12.

Also part of LRMC is Macquarie Infrastructure Holdings (Philippines) Pte. Ltd.

Previously, the LRT 1 line was operated by the Light Rail Transit Authority (LRTA) and the Department of Transportation and Communications (DOTC).

Commuter hopeful

LRT 1 commuters like Jun Collantes are hoping that LRMC will do a better job than the government.

“I just hope services get better. Lately, it’s been getting worse,” he said. “There aren’t enough trains and some have broken air conditioning.”

Collantes joins almost half a million daily commuters who crowd the LRT 1, the oldest of three elevated trains serving Metro Manila. It began operating in 1984 during the Marcos regime.

Together with the LRT 2 and and Metro Rail Transit Line 3, the three systems serve more than a million people daily.

For commuters, adding more trains is a key solution to ease congestion.

Temper expectations

But LRMC, which last year won the P65-billion contract to operate and expand LRT 1 all the way to Bacoor, Cavite province, over a period of 32 years, sought to temper expectations on Monday.

“LRMC is taking over a train system that is severely deteriorated. It is the oldest train line in Metro Manila where maintenance has been a challenge over the past years,” it said in a filing to the Philippine Stock Exchange.

“The real benefit of an improved train system will not be felt by the riding public immediately but will come in due course, particularly when the new trains are delivered by the government as part of its obligations under the concession agreement,” it added.

LRMC said these new trains were scheduled to arrive in 2017, “barring any delays.”

There was also plenty of work left to augment existing capacity.

LRMC said that out of the 100 train coaches committed to be delivered upon takeover, about 77 are in running condition.

“It will take time to fix the fleet and restore the system to optimal operating levels,” it added.

Poor facilities

Commuters have complained about poor facilities at train stations like toilets, which LRMC says it will address.

“LRMC is committed to improve the public’s riding experience over time and gradually bring the LRT 1 system to better operating levels,” the company said.

It added that nine of the 11 substations were also in line for rehabilitation “to help ensure more reliable train services.”

Sole bidder

LRMC was the sole bidder in the LRT 1 PPP deal after six other groups—San Miguel Corp., DMCI Holdings, Malaysia’s MTD Group, Megawide Construction Corp., Globalvia Inversiones of Spain and Ecorail of the Romero family—did not submit offers.

Some of those groups cited the PPP deal’s lack of viability given the condition of the train line.

Ayala and Metro Pacific had offered the government a premium of P9.35 billion to win the project.

Into utilities, banking

Ayala is into telecommunications, banking, real estate development and water services while Metro Pacific’s portfolio spans water services, electricity retail, toll roads and hospitals.

Together, the two had won the automated fare collection system PPP, a tap-and-go fare payment system for LRT 1, LRT 2 and MRT 3 now being implemented. The objective is to eventually replicate a broader payments system similar to Hong Kong’s Octopus card.

The two conglomerates are also bidding for the LRT 2 PPP and possibly, the P171-billion North-South Railway Project that would rehabilitate the 478-km line from Tutuban, Manila, to Legazpi City, with possible spur lines extension of 58 km from Calamba City to Batangas City and 117 km from Legazpi City to Matnog, Sorsogon province.

Metro Pacific chair Manuel V. Pangilinan said in a statement on Monday that the takeover of LRT 1 came after months of preparation.

“We consider the DOTC and LRTA to be our partners in this project and will work to improve the line over time, and make it a system that our commuters will not only enjoy riding, but one they can be truly proud of,” Pangilinan said.

In the same statement, Ayala chair and CEO Jaime Augusto Zobel de Ayala said both the government and private sector had commitments to meet under the concession framework.

“It is imperative that we work together to ensure the successful delivery of this project for the benefit of the riding public,” Zobel said.

How that translates to better services has commuters like Collantes still skeptical.

“Right now, it’s hard for me to see the difference. They only just started,” he said.—Miguel R. Camus and Gil C. Cabacungan