Postponement of MRT and LRT rate hikes a media stunt to promote privatization

PRESS RELEASE

11 May 2011

Malacañang’s postponement of the planned rate hikes in the MRT and LRT systems should not be taken as a considerate act of shielding the interest of the commuting public against price hikes but more of a deliberate stint for promoting the planned privatization of the railway mass transport systems, the labor group Partido ng Manggagawa (PM) said in a statement.

PM is opposing not only the recently approved fare hikes in LRT and MRT but also the privatization of these public utilities.  The Land Transportation Franchising and Regulatory Board (LTFRB) has approved the new rates for MRT and LRT lines 1 and 2,  just a day after the NCR wage board granted workers P22 cost of living allowance (COLA).

The new rates would require commuters to pay P11 boarding fee, with an additional P1 for every succeeding kilometre.  Accordingly, the P20 fare for LRT line 1 from

Roosevelt Avenue

in Quezon City to Baclaran in Parañaque City will be increased to P30, while the P15 fare in LRT line 2 from Marikina City to Legarda in Manila will be hiked to P25.

But transportation officials said the hike is to be postponed amid the soaring prices of other basic commodities.  PM Chair Renato Magtubo said the postponement also has nothing to do with the rising prices of other commodities as claimed by a Department of Transportation and Communications (DoTC) official, but more with the rush to privatize said firms.  He stated “Nor it can be presumed as a freebie to the measly cost of living allowance (COLA) granted by the wage boards to metro workers.”

The LRT system is the first to be bid out under P-Noy’s Public-Private Partnership Program.  DoTC officials claim that the private sector can do a better job in operating public utilities.  The government said it is spending at least P7 billion in subsidies to the MRT-LRT to keep fares affordable to ordinary commuters. 

The labor party said the Philippine privatization program begins with this usual propaganda line: That the government is losing money in running public utilities and the private sector can do a better job in managing them.

Earlier, Transportation Undersecretary Glicerio Sicat, head of the DoTC’s rail transport group, said the privatization of key government services had led to more efficient operations, citing as an example the privatization of public services such as water and electricity distribution which he claimed led to better and more reliable services.

But Magtubo said both P-Noy and Sicat were either absent or just cared for nothing during the last ten years to feel the impact of water and power privatization to ordinary consumers.

“The water and power privatization in the country is one of the largest privatization projects in the world.  After ten years electricity rates doubled and water rates increased by not less than 500% -- the main reason why we have one of the highest electricity and water rates in the world,” explained Magtubo.

Philippine privatization, the group added, led to the rise of private monopolies which destroys all the myths of free competition as mergers and acquisitions led to further monopolization of the market as shown in the case of PLDT-Digitel buyout – the same thing that is happening in the power and water industry.

PM insists that the light railway system is better left public, its rates remain subsidized, and service area even expanded to serve more poor commuters of the metropolis and nearby provinces. 

“The light rail should be maintained as the cheapest, most efficient and greenest mass transport in the country. Every peso spent by the government on subsidizing the LRT and MRT is money well spent. It does not only benefit the workers, students and the poor but protects the environment as well,” insisted Magtubo.

The group said that the cost-benefit accounting of the LRT/MRT operation should include a consideration of its “social good” delivered which cannot be quantified in money terms.