DOTr studies MRT-3 privatization options

MANILA, Philippines — The Department of Transportation (DOTr) has until July 2024 to decide whether it will package the privatization of the Metro Rail Transit Line 3 (MRT-3) and Light Rail Transit Line 2 (LRT-2) in one bundle.

In an interview with reporters, Transportation Undersecretary Cesar Chavez said the DOTr plans to push through with the privatization of the MRT-3 once its build-lease-transfer (BLT) contract lapses in 2025.

However, Chavez admitted that the DOTr has yet to finalize whether it will bundle the operations and maintenance of the MRT-3 with LRT-2.

To do this, the DOTr has to transfer the regulations of MRT-3 to the Light Rail Transit Authority (LRTA), which owns and operates LRT-2. Afterward, Chavez said the agency would submit its proposal to the National Economic and Development Authority for review and approval.

“If we package the MRT-3 with the LRT-2, one of the requirements is that we transfer the MRT-3 to the LRTA, and that is the direction that we are taking. In turn, the LRTA will be bundled when we offer it to the private sector for a PPP (public-private partnership) project,” Chavez said.

Sobrepeña-led Metro Rail Transit Corp. (MRTC) will turn over the MRT-3 to the government by 2025 as mandated by the BLT agreement.

The deal has directed the DOTr to manage the collection of fares and the MRTC to maintain the rail line and its train cars.

In exchange, the DOTr pays a monthly fee, ranging between P600 million and P900 million, to the MRTC, but when fare revenue falls short the government subsidizes the bill.

Once the contract expires, the government will be left to do everything on its own in sustaining the MRT-3, from operating the rail system, to maintaining its network of assets. The DOTr wants a private firm to handle the operations and maintenance of the railway.

On the other hand, Chavez said it would take the DOTr at least three months to study and approve the fare hike proposal for MRT-3. Right now, the Rail Regulatory Unit, headed by Chavez, is waiting for the referral from Transportation Secretary Jaime Bautista.

The MRT-3 management wants to raise the boarding fare to P13.29, from P11, and the distance fare to P1.21, from P1, per kilometer to boost its capital for operations and maintenance.

Chavez said the last time that MRT-3 made fare adjustments was eight years ago.