THE Light Rail Transit Authority (LRTA) will borrow P3 billion from Landbank to settle its outstanding debt to the Light Rail Manila Corp. (LRMC).
The government-owned LRTA handles the regulation, construction, and asset ownership of light rail systems, while the LRMC is a private consortium that operates, maintains, and extends the LRT Line 1 under a 32-year concession agreement.
LRT-1 runs from Baclaran in Pasay City to Muñoz in Quezon City.
The LRTA, with its savings and support from the national government, has paid P926 million of P4 billion in claims by the LRMC, LRTA Administrator Hernando Cabrera told reporters.
“By fulfilling these contractual obligations, the government is sending a clear signal to PPP (public-private partnership) investors: We are ready, willing, and faithful to the contracts we enter into,” Cabrera said.
LRMC is co-owned by Metro Pacific Investments Corp., AC Infrastructure Holdings Corp., Japan’s Sumitomo Corp., and Macquarie Investments Holdings under the Philippine Alliance for Infrastructure.
LRMC and MPIC chairman Manuel V. Pangilinan had earlier considered selling his company’s stake in LRT-1 due to the government’s unsettled obligations and the railway’s financial losses.
LRMC, which won the bid for the 11.7-kilometer Cavite extension project, took over LRT-1 operations on Sept. 12, 2015.
From 2016 to 2020, it was not granted the automatic two-year fare hike as stipulated in the concession agreement. The fare increase was approved only when President Ferdinand Marcos Jr. assumed office.
The company has been ramping up a modernization program as LRT-1 ridership is projected to surpass pre-pandemic levels this year, LRMC president and CEO Enrico Benipayo said in a previous statement.
LRT-1 currently serves 440,000 passengers daily, with an additional 10,000 by yearend.
Since taking over LRT-1, LRMC has implemented upgrades, including station rehabilitations, the introduction of 4th-generation train sets, and opening the LRT-1 Cavite Extension phase 1.
