Fare hike first, build after

Already delayed due to right-ofway concerns, the Light Rail Transit Line 1 Cavite extension is facing yet another hurdle before it can begin construction.

Its operator, Light Rail Manila Corp., is making a strong pitch for a P5-fare hike, the lack of which could imperil the start of construction toward the end of 2018.

The company, backed by conglomerates Metro Pacific Investments Corp. and Ayala Corp., said the fare hike was needed because a sizeable portion of the project’s P30 billion cost will be funded by debt.

Apparently the banks want proof that the proponents of the project, an 11.7-kilomter railway line that will extend LRT 1 all the way to the Niog area in Bacoor, Cavite, would be able to pay off their obligations.

Without a doubt, the LRT 1 Cavite extension, amongthe public-private partnership deals awarded during the Aquino administration, is a crucial project.

It will cut travel time between Manila and Cavite and open up opportunities for business, a natural consequence of efficient mass transportation projects.

LRMC noted that commuters will be able to bear the cost, with the average fare rising to about P25, about the same that they pay for a bus ride.

Rate hikes are always political. This one is especially complex with the election period coming up, and as higher prices measured by recent inflation readings grab the headlines.

The Department of Transportation has options in this area. Either it will allow the rate increase, making commuters bear the cost, or it could deny this and compensate the operator instead, making Filipino taxpayers pay for the amount. Either options is allowed under the concession agreement.

Which way will it swing? Abangan!