LESS than a month after the private concessionaire Light Rail Manila Consortium took over the operations of LRT 1, the group is now asking the government to pay P2 billion in penalties because the train system allegedly did not meet accepted standards, Bagong Alyansang Makabayan said Friday.
The group said the Ayala-Metro Pacific-led LRMC took over LRT 1 on Oct. 3 under a concession agreement that would also see the construction of a line extension to Cavite. It said LRMC was entitled to collect fares and other revenues, and that the contract was in effect for 32 years.
“In an October 30, 2015 letter obtained by the umbrella group Bagong Alyansang Makabayan, a critic of the privatization deal, the LRMC was demanding that the government pay P1.844 billion for restoration works so that the LRT 1 can meet the ‘existing system requirements’ agreed upon in the concession agreement,” Bayan said.
“The private concessionaires are invoking Section 5 3.b. of the concession agreement which states that “If the Existing System does not achieve either of the baseline Existing System Requirements parameters, as certified by the Independent Engineer, the Grantors shall compensate the Concessionaire for the unavoidable incremental cost.
“In this case…the Grantors’ Compensation shall be set at such a level necessary to compensate the Concessionaire for the costs necessary to restore the Existing System to the level necessary to meet all of the baseline Existing System Requirements.”
Bayan said that, in an Oct. 26 letter to the DoTC, LRMC noted that the government “had not been adequately performing inspection, monitoring and maintenance services on the existing system.
The group said that LRMC had “led to a degradation of the Existing System railway infrastructure and railway system, and the non-improvement or non-replacement of parts, which under the maintenance standards set in Section 5 of the agreement, should have been improved or replaced. John Paolo Bencito
Bayan also said LRMC was asking the DOTC to pay another P143 million because the number of available Light Rail vehicles did not meet the minimum requirements as set out in the contract. “The private operators are saying that only 77 LRV’s are available for revenue generation, which is below the 87 minimum that was agreed upon. The P143 million will allegedly go to the restoration works on some LRV’s so that the minimum required number could be met,” Bayan said.
The group said another another document obtained by it showed that LRMC was asking the DOTC to pay P72.7 million for every month of delay in the Right of Way delivery.
“Based on the initial documents, the total amount being sought by LRMC would reach P2.059 billion just after two months of taking over the LRT 1 operations,” Bayan said.
“Instead of making the usual blanket denials, the DOTC should explain to the public these billings being made by the LRMC because, ultimately, it will be the public who will be paying.”