jan debt

MANILA, Philippines — The Freedom from Debt Coalition (FDC) is calling on the Congress to investigate and review the privatization contracts made by the government with the private operators of the Metro-Manila rail transport system, and rectify the unjust and harmful impacts of such onerous deals on the consumers, like the recent skyrocketing fare increase imposed on the public.

During a picket today outside the gates of the House of Representatives while the Committee on Transportation held a public hearing on the alleged anomalous train fare hike,the FDC scored the government for deceiving and bleeding the public dry with its decision to hike the rail fares. The controversial 50 to 90 percent fare hike of the Light Rail Transit Lines 1 and 2 (LRT-1 and LRT-2) and Metro Rail Transit Line 3 (MRT-3) was a hard sell wrapped in glitzy promises of better service for commuters but was actually a guarantee to private investors of riskless revenues.

“Congress must probe grossly disadvantageous privatization contracts for the building, operations and
 maintenance of the rail transport system and find how the Aquino administration betrayed public trust, abdicated its duty to preserve people’s interest and compromised billions of public money just to entice investors and appease their hunger for profit,” said FDC Secretary-General Sammy Gamboa.

According to FDC, both the 25-year Build-Lease-Transfer contract of the Metro Rail Transit Corporation (MRTC) and 32-year Concession Agreement of the Light Rail Transit Consortium (LRTC) provide government guarantees for financing of the private contractors’ operations and a high return on investment (ROI).

Among others, such guarantees include sovereign backing on loans of the private corporations, 15 percent ROI for MRTC, government payment of deficit in concessionaire’s expected revenues (for LRTC) should the actual fare fall short of realizing such revenues, and exemptions from payment of corporate income taxes.

“Spinning tales about fare hikes bringing better services and freeing government train transport subsidies for other social and economic services just won’t fly. This is why Secretary Herminio Coloma had to backtrack on earlier claims because there is already a budget for the improvement, extension and subsidy of LRT and MRT operations,” said Gamboa.

Earlier, Palace spokespersons and Secretary Joseph Abaya of the Department of Transportation and Communication (DOTC) defended the train fare hike as a means to make users pay for better service and save about PhP 2 billion on government’s subsidies that can be diverted to projects and programs outside the National Capital Region.

“This administration has repeatedly lied to us and forcibly shoved onerous privatization contracts down the throats of the hapless commuters who have no other recourse due to the government’s failure to put in place an efficient public transportation system,” Gamboa said.

He also warned about a possible repeat of previous administration’s bitter experience of paying P32.08 billion from 2000 to 2010 to service the debts of MRTC and another P400 billion for net liabilities of the National Power Corporation due to expensive contracts with 12 independent power producers.


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