An insane situation

Say what you want but this is a totally insane situation. More than one-third of the annual budget of the Department of Transportation and Communications (DoTC) goes as subsidy to MRT 3. The government has no choice but to subsidize the operations of the EDSA-based MRT 3.

The numbers are intimidating. In 2009, the MRT 3 earned almost P1.9 billion from almost 152 million commuters. But its actual operating expenses had reached P6.9 billion for a deficit of P5.0 billion.

This year, total operating expenses are projected to reach P9.3 billion, but income is pegged at slightly near P2.0 billion for a projected deficit of P7.3 billion.

The fare scale reflects the disparity. MRT 3 has to charge at least P45 per passenger in 2009 just to break even. In 2010, the break even level is placed at P60 per passenger. But MRT 3 could only charge  a maximum of P15 per passenger.

But the government could not impose this punishing fare scale.

Otherwise, it would face the wrath of commuters, who have to go to the cities of Makati and Taguig to earn theri daily living.

This is the reason why the government has to subsidize its operations.

Imposing the actual fare rate could be a political problem.

Who’s the culprit?

Certain private parties have made the situation untenable for the government. The contracts are so onerous to these private parties. We should reexamine these contracts to untangle the legal mess.
We suggest a revisit to these contracts.

The government has no choice but to wipe out, if not, reduce the deficit to lessen the burden to commuters and the government itself.


For comments, reactions and suggestions… kindly keep it to yourselves. Dick Sinchongco


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