Due to the high Php9 billion yearly cost of maintenance, the Philippine government is apparently thinking of privatizing both the assets and operation of the Metro Rail Transit Line 3 (MRT-3).
Data revealed that maintaining and operating MRT-3 is costing the government at least Php8.93 billion every year from 2000 to 2021.
From that 22 years, it is said that the annual revenue from fair collection only averaged Php1.72 billion, which is only about 19% of the yearly expenses.
After the fare revenue got spiked to Php2.78 million in 2017, it has declined for three consecutive years to Php2.07 billion (2018), Php1.91 billion (2019), and just Php604.27 million in 2020.
Due to high expenses and low revenues, transportation department undersecretary Cesar Chavez said that they are now planning on selling MRT-3 to the private sector and will be assessing if they will include MRT-3 assets in the deal.
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“We don’t have a defined scope for the privatization yet, [as] we need to first determine if we are privatizing just the O&M only or also including the assets,” Chavez said.
He added that they are studying different options, but their ultimate direction is to privatize MRT-3.
The Metro Rail Transit Corp. (MRTC), via a build-lease-transfer, is set to transfer the train system to the government by 2025. As of today, the transportation department has the task of handling the fare collection while the MRTC will handle the maintenance.
In return, the government is paying MRTC from the fare collection. However, due to low revenues, the government has been shouldering the bill. Once their contract expires in 2025, the DOTr will be left with maintaining the MRT-3 on its own.
Terry Ridon Infrawatch PH has advised the DOTr to put a proper price on the MRT-3 before selling it since it also means that they will let go of the fare revenues.
Ridon, who also served as a member of the House Committee on Transportation, also said that selling the MRT-3 to the private sector also means fare price hikes that would badly affect the public.