Fares

The wonder of it is not that train fares were raised; it is that they were raised only now.

The matter is not about whether or not mass transit fares should be subsidized but whether or not they are subsidized justly.

The MRT-3, in particular, has been over-subsidized since it came into operation. Inaugurated at the onset of the Estrada presidency, the utility’s fare structure instantly became a political lightning rod. The then new administration, running on a pro-poor platform, scored major political points by slashing fares for the MRT.

Owners of the MRT did not really care about the fare structure. Under the contract, the investors were guaranteed a 15% annual return on their money.

If government decides to maintain low fares, or no fares at all, it was no skin off the investors’ noses. They get the same return; government merely assumes a heavier subsidy load.

Since that moment the Estrada administration decided to collect from riders basically the fares riders wanted, the MRT fare structure became a highly politicized issue. The two other government-owned and -operated rail lines could not adjust their fares since the MRT fare structure provided an informal benchmark for how much a ride must cost commuters.

Government was trapped in a costly quagmire. Because of operating costs on top of high financing costs, it came to a point where a rider at the MRT pays P14 and receives a subsidy of P46 each time he boards. Each year, government shelled out billions to pay the guaranteed return of the investors as well as the rising maintenance costs for the service.

Eventually, government cuts costs only where it can. Since it cannot touch the guaranteed return of the investors, government cut back on maintenance expenses and the cost of upgrading the system. The result is the decrepit, life-threatening and oppressive rail service we now have in place.

Because of how this deal was structured (investors have guaranteed incomes, residual revenues from lease of space and advertising goes to the private investors rather than to offsetting the operations costs, government operates the system and commuters pay the lowest fares imaginable), we now have a Frankenstein of a public utility. This is a textbook case on how not to run a public utility.

The MRT-3 is a monument to corruption and inept government.

Low as the fares are, huge sums are stolen from the fare box each day. This could be the only reason why DOTC officials resisted modernizing the fare collection system for years.

It was never clear who should be responsible for making the capital expenditures for the system. As a result, no one bought new trains until last year. The signaling system is ancient. The rails have not been replaced and now pose the peril of derailment each time an overloaded train runs the tracks.

 The old maintenance contract was cancelled by the DOTC. That same contract was awarded to two companies patently unqualified for the job. The contracts were cheaper because they did not include stocking up on vital spare parts to keep the system safe.

The sum of all that is a monster of rail service no sane person would use. Because there are no other alternatives, however, commuters bear the daily torture of using the MRT.

When Mar Roxas was DOTC secretary, he talked of raising fares. Because the service was so bad, commuters did not want to pay any more than they already do. The fare structure became a heavily politicized issue the administration was hesitant to deal with. It was always politically more bearable to fully subsidize fares than to realize what really are marginal reductions in subsidy through minor fare adjustments.

Now DOTC secretary Abaya has finally executed the plan to adjust fares for all the three light rail lines. The new fare structure does not fully address the full costs of operating what has become a decrepit system. Therefore the quality of the service cannot justify the new fares.

It is a Catch-22 situation. It is so only because the DOTC’s utter ineptitude over the past four years made it even more difficult to cure what is wrong with this system.

The past two days, I listened to the DOTC secretary give lengthy radio interviews with much discomfort. Abaya was trying too hard to characterize the fare adjustments as a supremely heroic act by his department to spare future administrations from having to do the inevitable.

What he should address is why fare adjustment has become so unacceptable to a public angry at how incompetence brought so much decay to the utility. That incompetence magnifies the innately politicized nature of train fares.

Delay (due to political cowardice) merely multiplied the political costs of a decision that eventually must be made. The DOTC must simply accept the political costs for that.

Community

The longest Christmas season anywhere is celebrated here. It is a season that evolved in a unique way, becoming a long opportunity to renew friendships, reaffirm personal ties and strengthen our community.

This is a long ceremony of excess, of too much food and drink and too much partying. Those are simply the means by which the threads of community are woven. That is how our culture operates: the feasts are long and the friendships magnified.

Clergymen counsel us about restoring “the reason for the season” to its proper place, seeing it in danger of being overwhelmed by all the shopping and the partying. That is important, too, although only a facet of myriad communal experience.

        A HAPPY CHRISTMAS TO ALL!