MRT-3 acquisition in peril

BusinessWorld reported today that the government's buyout of the MRT-3 faces possible delays when the Development Bank of the Philippines and Land Bank of the Philippines expressed doubts about the purchase and sought an exit strategy. The government intends to buyout the MRTC from its build-operate-transfer contract, which is set to expire in 2025.

At a cost ranging between PhP11 and PhP14, the MRT-3 probably has the lowest cost in any urban rail-based mass transport in the whole world. This is unconfirmed, of course, but the possible exaggeration is far more real when one considers the estimated cost per person for a single trip: it is a lot more than PhP60.

When the MRT-3 first operated in 1998, it charged upwards of PhP20 for even the shortest trip. But the government decided to subsidize the costs of its operation: at least PhP45 for each single commuter. 

Although Pedestrian Pinoy has earlier expressed the opinion that public infrastructure should strike a balance between profit and service, to operate a facility, even one that provides great service to the people, at a huge loss of the scale of MRT-3 (imagine an average loss of PhP18,000,000 every day), is not sound policy. As a result, the MRT-3's maintenance has suffered greatly, and the acquisition of new trains has been derailed. Service should be done in a manner that does no further harm, nor gives no further inconvenience, to the public that should benefit, and not suffer.