The bidding for the contract for the Light Rail Transit (LRT) Cavite Extension continues to face delays as policymakers work to come up with a fare structure that minimizes the burden on commuters without affecting the project’s financial viability.
Transportation and Communications Secretary Mar Roxas said the publication of the P30-billion project’s terms of reference may be moved to next month.
The Department of Transportation and Communications (DoTC) earlier said it wanted the project’s bidding to start in the middle of May.
“The easiest thing to do is to come out with the terms of reference and tell everyone that this is the price that they will have to pay and this is what the private contractor will earn,” Roxas said in a briefing on Thursday.
“But the government does not want to impose high fares on passengers,” he said.
The LRT Cavite Extension project will be bid out as a public-private partnership (PPP) wherein the winning contractor will build the extension of the LRT line 1 from Baclaran to Cavite.
The winning bidder will then operate and maintain the train line for a number of years, allowing the company to recoup its investments through the collection of fares from passengers.
The government’s part in the contract, aside from allowing the company to operate the original LRT section from Baclaran to Roosevelt, will be for the purchase of additional train cars to accommodate the expected increase in passengers.
Roxas said since the government would be funding the purchase of train cars, this lowers the amount of money that the private contractor would need to recover—leading to lower fares.
He said the government would also avoid having to pay subsidies to keep passenger ticket prices artificially low.
The government currently pays P7 billion a year to subsidize the Metro Rail Transit (MRT) line’s operations. MRT tickets cost about P15 each, but Roxas said the government pays as much as P45 per ticket to cover the real cost of transporting passengers.