‘Revoking onerous privatization deal, a win-win solution in LRT1’ – scientists group

“The LRT1 concession agreement is disadvantageous to Filipino commuters and taxpayers.”



MANILA – “Don’t just delay the imposition of the fare hike, stop it altogether by taking control of public service-oriented facilities such as LRT.”

This in summary is the proposed “win-win” solution for the government and commuters by AGHAM – Advocates of Science and Technology. The scientists group praised the department’s attempt to delay the impending fare hike in LRT1, but said this is just a temporary relief.

How do you balance the drive for profit and need for public service?

Since the previous Aquino government started pushing for the privatization of LRT1, commuters’ groups have opposed it warning that private corporations intent on taking it over would run it more for profit than public service. The LRT experience has also showed that it can run itself efficiently (better than mishap-prone public-private MRT3), even finance LRT’s expansion, and still stay mindful of prioritizing public service over profits.

Picture BUlatlat Crowded LRT

As publicly owned railways, LRT1 was able to fully pay the loans incurred in building it. By the time the Aquino government took power, LRT1 had successfully pushed for expansion (construction of LRT Line 2), and it had already planned and budgeted for its rehabilitation, using its earnings. It has also planned its expansion to Cavite, proposing to use government-backed loans (like in LRT 1 and 2).

Finance reports of the LRT when still publicly owned showed that it had managed to get by and it ran better than MRT3, despite the lower budget allotted to it yearly by the government. But the Aquino government still pushed for the privatization of LRT 1, closing a deal with the Light Rail Manila Corporation (LRMC) before its term ended.

Now Agham is one of the groups urging the government to review and revoke the contract deal entered with the LRMC by the Aquino administration in 2014. Agham described it as onerous and biased to the Ayala-Pangilinan-owned LRMC.

“The LRT1 concession agreement is disadvantageous to Filipino commuters and taxpayers. This includes P105 billion ($2.25 B) tax exemptions, revenue shortfall subsidies, 10.25 percent and 5 percent fare increase every 2 years and upon the completion of the LRT1 extension respectively. On top of these is the P7.5 billion ($161 M) sovereign guarantee in penalties and fees. All these will be taken from our pockets,” said Cleng Julve, research and campaign officer of AGHAM.


As alternative, Agham is calling for the nationalization of the urban rails, train facilities and assets.

“The government is in the best position and has the responsibility to take full possession of this critical public utility. In this way, a safe, affordable, accessible and reliable service for the riding public will be provided”, said Julve. He said the government has little to worry about in terms of capability or funds.

“Filipinos have brilliant local engineers who were able to produce the likes of the PNR Hybrid train,” Julve said.

Also, as seen in the LRT1 experience, he said, funds for running and expanding LRT1 can be found without necessarily making the public pay exorbitant fares.

“It’s just a matter of priority and political will”, ended Julve. (https://www.bulatlat.com)

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