THE Department of Transportation (DoTr) expects fares generated by Metro Rail Transit Line 3 (MRT-3) to be weaker than expected, leading to a possible failure to meet its financial obligations to the commuter line’s operator under the terms of the build-lease-transfer (BLT) concession deal.
“With regards the BLT agreement, the government will pay a combined of P3.4 billion,” Transportation Assistant Secretary for railways Jorjette B. Aquino told the House appropriations committee on Wednesday.
She said however that farebox revenue in the eight months to August totaled P1.6 billion, while its projected non-rail revenue was P36 million for the remainder of 2024.
Proceeds generated from MRT-3 fares and non-rail income pay for the government’s equity rental and other obligations to the operator, Metro Rail Transit Corp. (MRTC).
Ms. Aquino said the P3.4 billion financial obligation to MRTC include P2.75 billion for equity rental, staffing, and administrative costs; as well as a further P690 million due by January.
Projected fare revenue for the four months to December is only around P800 million, which would leave the government about P960 million short of its obligations, she said.
The MRTC is set to turn over the MRT-3 to the government by July 2025 once its BTL agreement lapses. The government hopes to privatize MRT-3 before the contract expires next year.
“We need to know if the fare collection is enough to cover the government’s financial obligations and if not then we will look into how we can fill in these balances,” Assistant Minority Leader and Party-list Rep. Marissa P. Magsino said.
Ms. Aquino said the DoTr initially requested a budget of P3.1 billion for MRT-3 but the National Expenditure Program only approved P1.07 billion.
“If that is the case then the budget approved is not enough. We will look into that,” Ms. Magsino said.
Under the BLT agreement, the DoTR holds the franchise and also handles the operations and fare collection. The MRTC built and maintains the system in exchange for a payment from DoTr. — Ashley Erika O. Jose
