Thursday, December 7, 2017

Ownership structure keeps MRT 3 derailed

Conclusion

Metro traffic by 2022 would reach a standstill level, according to a study made by the Boston Consulting Group, which was commissioned by ride hailing company Uber.

Not even the Duterte administration’s much-touted infrastructure program, the study says, could solve such eventuality. For one, Edsa, Metro Manila’s busiest thoroughfare, has already reached its carrying threshold and is hosting vehicles way past its capacity of 6,000 vehicles per hour.

Conducted between September and October of this year and covering around 300 commuters per city, the study cautions that bottlenecks may become riotous in cities, such as Manila, because “80 percent of commuters surveyed indicates plans to purchase a car in the next five years.”

Such a terrifying scenario should prompt the government to fix whatever is wrong with Metro Rail Transit (MRT) 3 and think of other ways to put some order on Metro roads.

MRT 3’s maintenance has been dismal. Sumitomo, its maintenance provider since day one, relinquished the responsibility in 2010 when MRT Corp. (MRTC) abdicated its upkeep accountability and threw it back to the government. Sumitomo’s contract with the government does not cover necessities for “penalties for malfunctioning elevators and escalators, and setting a minimum requirement of 19 trains running during peak hours between 7 a.m. and 9 a.m.” The government had been paying Sumitomo $1.4 million per month (when payment should have come from MRTC’s pockets). There had been no enhancement done since the problems became apparent in 2007, and Sumitomo was even suspected of cannibalizing parts.

Busan Universal Rail (Buri), which replaced Sumitomo, had somehow restored MRT 3 to its maximum number of working trains to 22 within a year after it signed the management contract. Starting from the 2017 summer season, however, a sequence of failures hindered operations and brought back the number of maximum functioning trains to less than 20. But what could any maintenance provider do except patch-up jobs on an old system that has been operating beyond its design capacity and which has drastically reduced the trains’ lifespan?

Light Rail Manila President Rogelio L. Singson agrees that MRT 3’s ownership structure—being jointly run by the government and the private sector—is the cause of its many problems. Light Rail Manila is the single operator and maintenance provider of Light Rail Transit (LRT) 1 which navigates Caloocan to Pasay. LRT 2, meanwhile, which runs from Manila to Pasig, is purely government-run.

“They’re pointing fingers at each other. To me, that is the main problem. It’s either the government or the private sector, which should run it,” Singson says.

A former public works and highways secretary, Singson believes that the most effectual system is having the private sector do the operation and maintenance. Light Rail Manila, a joint venture between the Ayala Group and tycoon Manuel Pangilinan’s Metro Pacific, has submitted to the government a proposal to run the MRT 3.

The consortium has set a P1-billion budget to upgrade the LRT 1.

According to Singson, restoration works augmented the number of operational train cars from 77 to 104, cutting waiting time between trains from four minutes to “a little over” three minutes. The preservation of trains is key, Singson explains, citing the decades-old,  yet still-operational tram system of San Francisco in northern California as an example.

“Our trains are millennials, while other trains are heritage. Maintenance is the solution,” he says.

Singson said some of LRT 1 station platforms would be widened once the railway line’s extension to the Cavite suburbs is operational in 2021 to give way to the projected increase in daily passengers to 800,000 from the current 480,000.

“I’m sorry to say that the problems of the MRT 3 cannot be resolved by government VIPs, [such as Presidential Spokesman Harry L. Roque Jr. and Sen. Grace Poe] riding the train to see how commuters suffer before and during the trips. [They suffer very much.] The problem is congenital. The elevated train system is like a two-headed monster: It has one body [the train line] but has two heads—one belongs to the owners, and the other belongs to the operator; and the two heads are quarrelling,” Singson says.

Another problem that is taking a toll on government’s coffers is the subsidy it provides to MRT 3 commuters. When it began its daily ride in December 1999, the fare was P30 per passenger. Designed to take in 300,000 riders, MRT 3 attracted only 40,000 in its first few months of operation. Then-President Joseph E. Estrada decided to lower the fare to P15 maximum and P10 minimum, which amplified ridership to 400,000 a day. The Arroyo administration continued to implement the same fare rates, forcing the government to put out a subsidy to meet the agreed rental payments to the consortium. Also, the subsidies varied with every drop in the foreign exchange rate since the rentals were denominated in dollars while revenues were in pesos.

Some P35.2 billion has already been shelled out by the government to MRTC. During that time, however, MRTC did not purchase new coaches or upgraded key systems of the line, including crucial signaling and ticketing systems. It reasoned that the government did not pay its rent promptly. By 2009 the Department of Transportation and Communications-MRTC relationship became rocky and spiteful. MRTC filed an arbitration suit in Singapore against the Philippines because of the delayed rental payments.

The following year then-President Corazon C. Aquino issued orders to expand the MRT 3 capacity by buying new coaches. Unfortunately, the Ramos administration-approved build-lease-transfer agreement gives the MRTC as owner the right of first refusal. And that is why the Filipino commuting public is now stuck in this mess.

For comments and suggestions, e-mail me at mvala.v@gmail.com.

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