It appears that passengers of Light Rail Transit Line 1 (LRT 1) will not yet be paying more for their rides as the Department of Transportation (DOTr) said it could not grant the railway’s private operator’s fare hike request for now amid increasing consumer prices.
DOTr Undersecretary Timothy John Batan, in a virtual press briefing on Wednesday, said that the department’s hands were tied with regard to the fare hike proposal by LRT 1 operator Light Rail Manila Corp. (LRMC).
“First of all, [our policy is very clear that] considering the current environment with inflation, we are really not able to increase or to grant the requested fare increase by our concessionaire for LRT 1,” he explained.
The government reported earlier that inflation rose to a 40-month high of 4.9 percent in April due to higher oil and food prices amid Russia’s war on Ukraine. The Development Budget Coordination Committee also increased inflation projection this year to 3.7 to 4.7 percent range from 2 to 4 percent previously.
Batan’s statement was in response to the case filed earlier this month by LRMC against the DOTr and Light Rail Transport Authority (LRTA) for inaction on its fare adjustment applications and alleged failure in meeting other stipulations in their concession agreement (CA).
With the International Chamber of Commerce as their mediator, LRMC has asked for P2.67 billion worth of compensation. The monetary claims, which exclude interest, were based on its estimates as of March 31.
‘Long overdue’
The private operator earlier said that fare hikes were “long overdue,” citing its three attempts in recent years. Fares currently range from P15 to P30.
Increasing the fares is seen to help the company recoup investments for LRT 1 enhancements and the extension of the railway to Cavite.
For now, Batan said that the DOTr was still studying its next move regarding the case.
“On the notice of arbitration that was filed, this is of course being studied by our legal department, together with DOTr’s counsel, the office of Solicitor General. And we will handle this according to the concession agreement,” he said.
Apart from its concerns on fare hike, LRMC flagged the costs arising from DOTr and LRTA’s “failure to deliver to LRMC the required number of light rail vehicles that meet the stipulated technical requirements under the CA and the structural defects on the existing LRT 1 system.”
Such are crucial “to ensure that LRMC is able to provide a safe, efficient and reliable service to the public as required under the CA,” the company stressed.
Metro Pacific Investment Corp. and Ayala Corp. jointly own LRMC, with Sumitomo Corp. and Macquarie Group as its minority shareholders.