Light Rail Manila Corp. filed an arbitration case against the government before the International Chamber of Commerce for failure to pay P2.7 billion and implement long-overdue fare adjustments under the concession agreement.
The operator of LRT Line 1 filed a request for arbitration with the ICC over disputes with the Department of Transportation and the Light Rail Transit Authority, consistent with the dispute resolution procedures under the existing contract.
“The request pertains to the adjustment of the approved fare for the years 2016, 2018 and 2020 and LRMC’s claims for compensation relating to the grantors’ [DOTr and LRTA] contractual obligations to compensate LRMC for: the difference between the stipulated fare and the approved fare based on the schedule provided in the CA, following the grantors’ inaction on LRMC’s application for fare adjustments based on the CA,” LRMC said.
It said the claims included the losses, costs and expenses incurred by LRMC for the government’s failure to deliver to LRMC the required number of light rail vehicles that meet the stipulated technical requirements under the contract and the structural defects on the existing LRT 1 system, both of which are required to ensure that LRMC is able to provide a safe, efficient and reliable service to the public as required under the CA.
LRMC said that as of March 31, its monetary claims amounted to about P2.67 billion before interest, in addition to its application for the implementation of the long-overdue fare adjustments for 2016, 2018 and 2020.
“Despite compliance with applicable legal requirements and after exerting best efforts to amicably discuss the foregoing claims with the grantors, LRMC has not received any offer from the DOTr and LRTA. In view of this, LRMC was compelled to deliver the request to preserve and enforce its rights under the CA,” LRMC said.
“LRMC believes that the settlement of these claims is critical to enable it to continue to be viable and provide safe, efficient and reliable services to the public,” it said.
LRMC said that despite the disputes, it remained committed to providing the best possible services to the public.
LRMC said it implemented significant operational improvements, rehabilitation projects and system upgrades to the system and continued the construction of the Cavite extension safely and efficiently.
LRMC earlier said it was expecting the LRT Line 1 Cavite Extension project to start operations by the middle of 2024.
LRMC said Phase 1 of the 11.7-kilometer project was 60-percent completed, with girder now covering the entire stretch of Dr. Santos Station to Pacific Ave. near Asiaworld Station.
Phase 1 covers 7 kilometers including the Redemptorist Station, MIA Station, Asiaworld Station, Ninoy Aquino Station and Dr. Santos Station.
The remaining stations between Las Piñas and Niog are scheduled to become fully-operational by 2022.
Once completed, the extension is expected to reduce travel time between Baclaran and Bacoor, Cavite to minutes from 1 hour and 10 minutes and increase LRT-1’s capacity from 500,000 to 800,000 passengers daily.
LRMC won the bidding for the project and took over the operation of LRT Line 1 on Sept. 12, 2015. LRT Line 1 runs from Baclaran in Pasay City to Munoz in Quezon City.