The Light Rail Transit Authority is seeking a P3 billion loan from Land Bank of the Philippines to settle its outstanding debt with Light Rail Manila Corp., the operator of LRT-1.
LRTA administrator Hernando Cabrera told reporters that the agency applied for the loan last year to cover the government’s remaining debt to the private operator.
The agency has already settled P926 million of the P4 billion in claims sought by LRMC. Cabrera said the initial payment was made using a combination of agency savings and support from the national government.
“By fulfilling these contractual obligations, the government is sending a clear signal to PPP investors: we are ready, willing and faithful to the contracts we enter into,” Cabrera said.
The move to settle the debt follows statements from LRMC and Metro Pacific Investments Corp. chairman Manuel Pangilinan, who previously indicated he was considering selling his stake in the railway operator.
Pangilinan cited the government’s unsettled obligations and continued financial losses as primary reasons for the potential exit.
The financial friction stems from a period between 2016 and 2020 when LRMC was not granted the automatic two-year fare hike stipulated in its concession agreement. The operator was eventually granted a fare increase under the administration of President Ferdinand Marcos Jr.
LRMC president and chief executive Enrico Benipayo said the company is ramping up modernization efforts as ridership is projected to surpass pre-pandemic levels.
Benipayo said daily ridership has hit a pre-pandemic average of 440,000 commuters and is on track to reach 450,000 by the end of the year.
The company took over the operation of LRT-1 on Sept. 12, 2015, after winning the bidding for the 11.7-kilometer Cavite extension project. The line runs from Baclaran in Pasay City to Munoz in Quezon City.
Since taking over the system 10 years ago, LRMC has implemented station rehabilitations, introduced fourth-generation train sets and opened the first phase of the LRT-1 Cavite Extension. LRMC is a consortium composed of MPIC, AC Infrastructure Holdings Corp, Sumitomo Corp and Macquarie Investments Holdings.
