Rescinding MRT deal, PPPs urgent–group

November 11, 2015

by superadmin

Allowing PPPs to channel public resources to private profits deprives the nation of much needed resources for social services and development

As the Metro Rail Transit (MRT) has been bogging down, prompting the Philippine Senate to deliberate on the train’s deteriorating services, research group IBON underscored how putting a public utility in the hands of the private sector has never brought efficient and affordable services to the people. The group said that government should rescind this public-private partnership (PPP) deal now and take hold of the train system and muster resources for it to effectively serve the public.

The recently-held Senate hearing noted overdue repairs and delivery of prototype trains, highlighting how the additional fare did not translate to improved services. Passengers of the Ayala-Pangilinan-run MRT, 80% of whom are workers and students, were charged as much as 87% additional ticket fare at the beginning of this year. Data from the Department of Transportation and Communication (DOTC) meanwhile shows that since then, MRT service interruptions doubled compared to its rate prior to the fare hike. Even the new single-ticketing system has begun showing glitches only within its first months of operation.

IBON said that the public’s woes with regard to the MRT stand to worsen in face of another impending fare hike. Even in anticipation of additional trains come 2016, the group expressed concern that the Light Rail Transit-1 (LRT1), which is also a PPP project with the Ayala-Pangilinan group, sets a precedent of lopsided concession terms for other train systems like the MRT.

For instance, the public will be made to pay for the difference between the notional fare (the amount of increase stipulated in the concession agreement between government and the private concessionaire) and the approved fare; shoulder payments for the right of way in train extension areas; and shoulder government liabilities that have not been incurred, among other burdensome stipulations. The 2016 National Expenditure Program allocates a higher amount of Php65.9 billion to a handful of PPPs with the country’s richest oligarchs compared to the PPP allocation in the 2015 national budget.

Worsening services and the rising cost of riding trains under PPPs should be enough reason for government to think twice about staying in such deals, said the group. However, towards the end of its term, the Aquino administration has aggressively been clinching more PPPs in services and public infrastructure.

Allowing PPPs to channel public resources to private profits deprives the nation of much needed resources for social services and development. Government should thus discard the PPP paradigm altogether, said IBON.