Is The Fair Justifiable?

As a regular commuter and patron of the Metro Rail Transit (MRT) and the Light Rail Transit (LRT) in Metro Manila, the fare increase is pretty disturbing. Imagine paying twice your fare last year. But the real question here is this: is the fare increase justifiable?

First, the increase of fare in the LRT and MRT seems to have not undergone public hearings. Comparing it to the process of increasing the fare for other public utility vehicles (PUVs) such as jeeps and buses where they undergo public hearings and consultations, the sudden decision of increasing of the fare in the LRT and MRT is questionable. No explanations were offered and given except for the statement by the Department of Transportation and Communications (DOTC) that it was overdue for years.

Second, according to the MRT-Hong Kong, it would be best if MRT Line 3 shuts down until it is fully rehabilitated to protect the users and for safety reasons especially after the horrible incidents that happened last year where it proved that MRT Line 3 is no longer safe. If this is so, then why is still MRT Line 3 operating? Plus even increase the fare when they should be considering the rehabilitation of the train first.

Last but not the least, after all the controversies DOTC Secretary Jun Abaya faced including the unexplainable giving of the contract to the maintenance firm which happens to be owned by Jun Abaya, Undersecretary Jose Perpetuo Lotilla, and then-MRT-3 general manager Al S. Vitangcol. There was no proper bidding that happened and everything seemed to be done under the table.

After all these issues, is the fare increase of the MRT and LRT really justifiable when in fact, it seems that they all have the budget and the fare increase is not really necessary. And don’t forget the fact that despite of the budget the department, there was no upgrading of the maintenance and operations that happened during Abaya’s stay as the secretary of DOTC.

What do you think?

Cheers~!

- Justin -

Is it time to increase the fare?

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Most classes will officially resume on January 5, 2015. And being a student who is a regular commuter of both the Metro Rail Transit (MRT) and the Light Rail Transit (LRT), my emotions are torn with the current state of the train stations. Starting on January 4 next year, the fare for MRT Line 3 and LRT Line 1 and 2 will increase as per Department Order No 2014-014 issued by Department of Transportation and Communications Secretary Joseph Emilio Abaya.

When you come to think of it, it would really be a burden for students like me since that means we have to cut our budget for other things since we need to allot more of our transportation expenses. However, when you look at the bright side of it, it could possibly lead to a better service and maintenance operations given that the management will use the additional profit to good use.

If I would to be asked, I think it's time we increase the fare. And no, it's not because my parents are the one giving me the money, but more of because it's really time to upgrade. Imagine, when the MRT started in 1999, the original fare was around Php 17 to Php 34. But a year after, in 2000 in was lowered down to Php 10 to Php 15. And now, as we head over to a new year, the expected fee for MRT Line 3 shall be around Php 28 from North Avenue station to Taft Station. That's still a lot cheaper compared to buses.

So what's the real deal here? If the government can handle it well, then it would be great. But if we see that there's really no improvement, then most likely, we're just giving them more money to take home.

What do you think? Do you agree that it's time to increase the fare or should we focus first on the improvement of the management?

Cheers~!

- Justin -

MRT: A Case of Hidden Desire?

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It's still a mystery for me as to why Department of Transportation and Communications (DOTC) Secretary Emilio "Jun" Abaya won't accept Japan's Sumitomo Corp offer to be the maintenance provider of the Metro Rail Transit (MRT) Line 3.

I've been patronizing the MRT ever since and it has been my top choice of transportation. Not only it is the cheapest, but it's also the fastest mode of transportation. Imagine, for someone like me who lives in the north which is Caloocan, traveling from North Avenue station in Quezon City all the way to Taft station in Pasay City can only take around thirty minutes of my time. That's a huge deal for me since if you happen to be traveling in a rush hour mode via bus, it can take you as long as three hours to make the trip. That's one horrible state in our traffic system that we are currently facing today. So for a commuter like me, MRT is a huge blessing. But will it always be the case?

With the current situation of the MRT, riding the train can also mean your last ride. Trains being derailed, the systems shutting down, power failure, we have yet to see things in their worst state. Is this a problem with the maintenance and operation or is it just another case of a corrupted management?

Sumitomo Corp submitted a proposal involving railway system rehabilitation over an eighteen (18) period at an estimated cost of $97 million. This is definitely a deal. After all, they are the top option as the maintenance provider for the MRT Line 3. However, Secretary Jun Abaya thinks otherwise. He won't sign the deal. As to why? We never really know. My speculation is he wants to pursue to buyout so that the government can take full control of the operations. Also, it's possible that Abaya wants to choose another maintenance provider in which he could gain personal interest just like with that happened with APT Global. 

At the end of this issue, Secretary Abaya has all the say being the secretary of the DOTC. And one wrong move can change the future of the commuters. So is this yet another case of personal interest? Or is DOTC just being careful with the proposals Sumimoto is sending?

Cheers~!

- Justin -

MRT Buyout: Why?

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Executive Order 126. This is what Department of Transportation and Communications (DOTC) Secretary Joseph Emilio Abaya believes to be their ace as they push through the government's takeover of the Metro Rail Transit.

Issued by President Benigno Aquino III in February 2013 the Executive Order (EO) 126 or the "Repealing Executive Order No. 855 (S.2010) and Authorizing the Implementation of the Equity Value Buyout of the Metro Rail Transit Corporation and Prescribing Guidelines Therefor" states that the Metro Rail Transit Corporation (MRTC) issued Equity Value Buyout (EVBO) Notices to DOTC in pursuant of the Build-Lease-Transfer Agreement (BLT Agreement) wherein the government will be required to purchase MRTC’s right, title and interest in MRT Line 3.

The government has actually allotted Php 56 Billion for the EVBO following Executive Order 126. However private shareholders of the MRTC insisted that the value falls short from its total Equity Value (EV), and pointed out that the Php 56 billion the government has allotted only accounts for the bonds controlled by the two state-run banks: the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LandBank).

Thus, the government can only complete the buyout if and only if they are able to settle the bonds which costs at around Php 53 Billion. As mentioned by Senator Sergio Osmeña III at the Senate hearing on the proposed 2015 budget of the Department of Transportation and Communications (DOTC) on Thursday, November 20, if they really want for the buyout to push through, the government needs to settle at least Php 100 Billion and not the Php 56 Billion which they have alloted.

In the first place, why is the government such eager to take full control of the MRT Line 3 when they have not even consulted with Metro Rail Transit Holdings formally to talk about the buyout. 

And since the government could not afford the buyout, they are interested and looking at the option of using taxpayers' money to complete the buyout which I find really unfair. Why would you use our money to gain full control of the operations and maintenance of the train when you could have just proceed to the bidding of it to the private sector.

But if you look at the bright side, if indeed the buyout becomes successful and hopefully, there will be no issue regarding the operations and maintenance, then we could be looking at a better service with lower ticket price. This, however seems to be too good to be true.

Up to the this moment, there's a lot of questions and concerns that DOTC and the government needs to address. As for now, we can do nothing but just wonder. Why?

Cheers~!

- Justin -

MRT BUYOUT: Yes or No?

In a recent turn of events, the Department of Transportation and Communications (DOTC) announced that they are expecting to purchase the privately-owned equity shares of the Metro Rail Transit Corporation (MRTC) via the Equity Value BuyOut (EVBO) in the first week of January 2015.

This initiation was expressed by DOTC Secretary Joseph Emilio Abaya wherein the government aims to get in full control of the operations and management of the MRT 3.

The long-term plan of the government for the MRT-3 is to implement the equity value buy-out (EVBO) of the system’s private-sector owner Metro Rail Transit Corp. (MRTC) as provided for in the Build-Lease-Transfer (BLT) Concession Agreement. Under Executive Order No. 167 s. 2013, the Department of Transportation and Communications (DOTC) and the Department of Finance (DOF) are tasked to implement the EVBO to finally end the negotiation between the DOTC and the MRTC.

However, if we look into the issue deeper, this MRT buyout plan of the government can be a really big problem. Secretary Jun Abaya expressed that the government is buying everything out, from the bonds to the remaining equity interest in private hands. The government allotted P54 billion ($1.25 billion) for the buyout. This amount was included in the P2.26-trillion ($50.45-billion) national budget for 2015. And if ever the budget for 2015 will be passed, the takeover can be in effect as early as the first week of January that same year.

But, isn’t P54 billion a huge amount considering that it will be taken from the 2015 national budget? When you come to think of it, as Quezon City Congressman at House Committee on Metro Manila Development Chairman Winston Castelo mentioned, why not take the P54 billion and use it for other projects instead? Projects that could actually solve the traffic jam problem within the metro. Plus, a huge factor is that the government does not even have a proper plan laid out as to what they are going to do after the buyout.

Another case we can look at is that perhaps DOTC is just buying P27 billion worth of bonds that they already own but pretends to buy MRTC so that they can use the P54 billion allocated amount for the project for their own greed.

This issue is still ongoing and we are yet to get answers from DOTC and MRTC. But I am firm on my stance, the MRT buyout should not happen as it might lead to another endless case of corruption.

What do you think?