MRT-3 revenue hits record low in 2019 – COA

MANILA, Philippines — Revenue collections of the Metro Rail Transit Line 3 (MRT-3) dropped in 2019 to its lowest in the past five years, according to state auditors.

The Commission on Audit (COA) has called on the Department of Transportation (DOTr) to speed up the rehabilitation of the MRT-3 as the continued decrease in revenue has been depleting government coffers.

In its 2019 audit report on the DOTr, the COA noted that the MRT-3 posted only P1.907-billion income, lower by P161 million from its P2.068-billion revenue in 2018.

The MRT-3 posted P2.779 billion, P2.681 billion and P2.316 billion in revenues in 2017, 2016 and 2015, respectively.

The COA said the income generated from the MRT-3 operations was being used to pay its rental obligation to Metro Rail Transit Corp. for the 25-year build-lease-transfer agreement that the government signed with MRTC on Aug. 8, 1997.

State auditors said because of the continued drop in the MRT-3’s revenues, the government has been extending to the DOTr billions of pesos in subsidy to shoulder the rental fees.

In 2019 alone, the audit body said the national government shelled out P6.9 billion in subsidy to pay the rental obligation, the highest since 2015 when it disbursed P4.8 billion.

The COA noted that the Department of Budget and Management released additional funding sourced from unprogrammed appropriations as the P4.696 billion appropriated by Congress for “Government Subsidy for Mass Transport” for 2019 was not enough to cover the rental fees to MRTC.

Records showed that the government extended P4.661 billion, P4.286 billion and P3.417 billion in subsidies to the MRT-3 in 2018, 2017 and 2016, respectively, for the payment of rental obligations.

The MRT-3 management admitted that the decline in revenue collections was due to the “decrease in the number of reliable and safe trains in 2018 and 2019 due to years of neglect, bad maintenance practices and failure to undertake scheduled overhaul and upgrading works.”

The DOTr took over the maintenance of the MRT-3 after it terminated the P4.25-billion contract of Busan Universal Rail Inc. (BURI) in November 2017 due to alleged irregularities.

The contract, which was supposed to have ended in January 2019, included the maintenance of the MRT-3 system for three years, general overhaul of 43 units of light rail vehicles, total replacement of signaling system and additional maintenance works.

The DOTr explained to the audit team that following the termination of the contract with BURI, the MRT-3 maintenance transition team has undertaken measures to ensure that only “safe and reliable” trains would be deployed for operations.

The DOTr admitted that this resulted in reduced operations as well as lower ridership and revenues.