Transportation Secretary Giovanni Lopez said the government will settle an initial P1 billion in “undisputed” debt to Light Rail Manila Corp. (LRMC) by the end of the year after the LRT-1 operator considered selling its stake.
Lopez also assured that the operations of LRT-1 will continue amid reports of Metro Pacific Investments Corp. reassessing its stake in the LRMC.
LRMC is a consortium composed of MPIC, AC Infrastructure Holdings Corp., Japan’s Sumitomo Corp., and Macquarie Investments Holdings under the Philippine Alliance for Infrastructure.
In a statement, Lopez recognized that the decision of MPIC Chairman Manuel Pangilinan is a “management prerogative.”
Lopez said, “for me personally, let’s talk about it,” but acknowledged that the decision is “management prerogative” and “part of ownership.”
The transport chief noted, nevertheless, that under the Concession Agreement, the “written prior consent of the Department or the government” will be needed for the transfer of MPIC’s interest to a third party. “Because the parties will change,” Lopez said.
Lopez said the change would require a new contract if there will be a new participant in the consortium. This will entail a prior review by the DOTr of the new company entering the consortium to determine if it has the financial capacity and expertise to operate the rail line.
“We are starting to pay the undisputed payment, what the government really should pay, we have already paid over P400 million. Hopefully, by the end of this year we will be able to pay P1 billion,” said Lopez.
From 2016 to 2020, the LRMC was not granted the automatic 2-year fare hike as stipulated in the concession agreement. It was only during President Ferdinand Marcos Jr.’s administration that the LRMC was granted the fare increase.
“According to their contract, in the concession agreement, every two years they should have an automatic fare hike and that should be allowed by the government. From 2016 to 2020 they were not given a fare hike. They started giving it in 2022 and 2024,” he said.
Lopez maintains that it is incumbent upon the DOTr and the private operator to provide efficient, comfortable and safe railway service to commuters.
“They also knew when they accepted the concession agreement. These kinds of contracts are imbued with public interest. It means that they should be dominant at least somehow, if not dominant, they should equalize the income and the services to the people. They knew that and I’m quite confident that they are pretty aware of those principles,” he said, referring to the LRMC.
Currently, the DOTr and LRMC are in talks, discussing about payment matters. The transport chief is optimistic that both parties will reach an agreement for the benefit of the commuters.
