MRT-3 fare hike is for 2016 elections

That’s the only reason for President Aquino and transport and communications department Emilio Abaya’s pigheadedness in insisting for MRT-3 (as well as LRT I and II) fare hike, which would burden the hundreds of thousands of our working class and their children commuting to school.

They’ve figured a way, using the Disbursement Acceleration Plan (DAP) that had been declared unconstitutional by the Supreme Court as a template and certain provisions in the 2015 budget Aquino approved two weeks ago to hijack funds the Congress authorized to subsidize MRT fares and maintain the mass rail system.

Yes, for all its stupidity and incompetence as well as its servility to President Aquino, Congress authorized P4.7 billion as, to quote verbatim, “Subsidy for Mass Transport (MRT 3).”

This allocation is different from the P2.7 billion for “MRT 3 Rehabilitation and Capacity Expansion.” Congress in December also passed what is called a “supplemental budget” or authority to pay expenses for projects approved in 2014 but which had not yet been settled. This authorized another P1.2 billion for the DOTC’s “Metro Rail Transit 3 Rehabilitation and Capacity Extension.”

Since 1999 when MRT 3 started operations, the DOTC has subsidized its fares – as is the practice of nearly all governments in the world for their mass transit systems – at an average of P3.4 billion annually, the largest having been in 2011 at P6.9 billion. In terms of percentages the DOTC’s total budget, these accounted for 12.6 percent annual average from 2005 to 2015.

The costs for maintenance and operation of the MRT 3 is actually first covered by the fares commuters pay. When these aren’t enough, the budget laws authorize the use of the allocations termed “Subsidy for Mass Transport (MRT 3).”

They shouldn’t be enjoying subsidies, Abaya says. So, raise the fare!

These are estimated and submitted to Congress for inclusion the budget by the DOTC itself. Thus, the P4.7 billion subsidy for 2015 is the DOTC’s estimate of the needed funds to cover for MRT 3’s maintenance and operation costs that the fares cannot pay for. That is, the computations assume that the fares remain the same.

So it was surprising, even shocking, that Abaya announced a week after Congress approved the 2015 budget on December 2015 (and closed for the Christmas season) that there would be increases in rates for all light railway systems, for the MRT 3 North Avenue to Taft Avenue ride, for instance, from P15 to P28, a whopping 87 percent.

Arrogance of power
Abaya’s arrogance of power was immediately obvious in that he didn’t even bother to have the increase approved by the Land Transportation Franchising and Regulatory Board, which by law and the DOTC’s internal regulations is the body that approves such fares, and after public hearings.

If his department calculated that existing fares weren’t enough to cover for the maintenance and operations costs of the MRT 3, why didn’t he propose a bigger subsidy this year than the P4.7 billion his department proposed?

This could have been workable. In 2011, the subsidy was even higher at P6.9 billion, representing 22 percent of the DOTC’s budget. The previous year it was P5.1 billion, 20 percent of the department’s budget.

Abaya’s public statements to justify the increase have been incoherent. In one instance, he says it is needed to improve MRT 3’s services. But then there’s a budget for rehabilitating MRT 3’s facilities allocated for this year – P3.9 billion. Congress allocated P4.5 billion for such expenses in 2014, but then Abaya sat on his ass, or even cheered, as Budget Secretary Florencio Abad and Aquino hijacked it and put it into the Disbursement Acceleration Program kitty, the use of which only the two decided.

In another instance, Abaya pretended to be a patriot by claiming that the savings generated if commuters paid higher fares would be used for alleviating poverty outside Metro Manila. Since when has it been his duty to think of programs outside his department? When did he assume the authority to decide on allocation of government funds, which is the role and task of Congress?

That reason Abaya gave is really utter nonsense. It was a slip of the tongue however, that explains why he has ordered a fare hike.

One of the special provision in the 2015 budget for DOTC stipulates that the costs for operating and maintaining the MRT-3 “shall be charged against the fare box revenue and all its non-rail income.” The provision explains: “In case of insufficient collections or income, the same may be augmented by the amounts appropriated herein for mass transport subsidy,” i.e., the P4.7 billion amount.

Diabolical scheme
Here is where this administration has a diabolical scheme for the 2016 elections. If the fare box revenue is increased through a fare hike, as Abaya in fact announced, the P4.7 billion, or a portion of it, need not be touched.

What then does the P4.7 billion become?

Savings, according to its new definition made in the 2015 budget, as the DOTC is unable to use it, since there is enough income from the increased fares to cover for MRT 3’s operations.

This means that Abad and Aquino can use this amount, as it did under the DAP, for whatever purposes they decide on – a travesty of our Constitution that says that it is Congress which decides on how each and centavo of the budget is to be used.

Aquino, Abad and Abaya will likely use the P4.7 billion for projects in areas where the leading presidential candidate, Vice President Jejomar Binay, has strong support, to bribe the local leaders to campaign and in effect buy people’s votes for the candidate of the Liberal Party, of which Abaya is secretary-general. That’s what Abaya meant when he says savings generated with the fare hike can be used for “other parts of the country.”

But I wouldn’t be surprised if they’ve even devised a scheme to just pocket it themselves, or ostensibly for a “good cause” – for the 2016 campaign funds.

The real reason why MRT-3 has been breaking down and has been in such a dilapidated state has been the fact that the maintenance contract for MRT 3 since 2010, or under the Aquino administration, has been awarded to inexperienced firms, one of which was found to have a stockholder who was the uncle of a DOTC official.

Worse, unlike the contract a Sumitomo-Mitsubishi unit had before 2010, those under Abaya did not include the cost of spare parts, which made up 60 percent of the Japanese contractors maintenance costs. (See my column, “MRT 3 mess is worst kind of corruption,” October 14, 2014)

If the P4.5 billion Congress allocated for a subsidy to commuters is untouched because of a fare hike, the DOTC could increase the contract price for MRT 3’s maintenance, and I bet it won’t be the Japanese experts who would be the contractors.

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