Citing Light Rail Transit Authority (LRTA) figures, Ty said the three trains are already generating operating profits, defined as operating income less operating expense.
Ty said in a press release that Light Rail Transit (LRT) Lines 1 and 2 generated P3.299 billion in “operating revenues” and incurred P2.928 billion in “operating expenses” in 2010, thus yielding P371 million in operating profits.
The operating income of Lines 1 and 2 came from P3.089 billion in fare revenues, plus P210 million in other revenues, mostly from rent and advertising, he said.
Ty said the Metro Rail Transit (MRT-3) posted P1.916 billion in operating revenues and P645 million in operating costs in 2010, thus producing P1.271 billion in operating profits.
The MRT-3’s operating income came from P1.904 billion in fare revenues, plus P12 million in other earnings.
“The only reason the three trains are incurring large deficits is because they are being overwhelmed by huge debt payments and other nonoperating financial obligations,” Ty said.
He cited the case of the MRT-3, which in 2010 spent P7.878 billion for build-lease-transfer (BLT) agreement payments, including an equity rental payment of P5.296 billion to the private consortium that built the train system.
After the BLT agreement payments, Ty said MRT-3 incurred a deficit of P7.252 billion.
In the case of LRT Lines 1 and 2, he said that after principal and interest debt payments as well as other financial and noncash charges, they actually incurred a deficit of P8.927 billion in 2010.
Ty said the deficits, covered by State subsidies, could be wiped out once government finds ways to address the debt and nondebt obligations.
“Assuming the debts are mostly in US dollars, it might be sensible for the government to pre-pay some of the obligations once the exchange rate hits P37 to a dollar, or P35 to a dollar. This will be less costly for government,” he said.
HSBC Holdings Plc., one of the world’s largest banks and financial services companies, earlier predicted the peso would soar to P37.50:$1 by the end of 2011, and to P35.50:$1 by the end of 2012.
“Clearly, once the financial obligations are addressed, there may be no need for a fare increase, or for a large government subsidy,” Ty pointed out.
In a debt-free scenario, Ty said the government could still provide minimal subsidy from time to time, mainly for capital expenditures meant to build up the capacity of the trains and improve their operations.
The 15-kilometer LRT Line 1 from Baclaran in Pasay City to Roosevelt Avenue in Caloocan City, and the 13.8-kilometer Line 2 from Marcos Highway in Santolan, Pasig City to Recto Avenue in Manila have moved a combined three billion passengers since they started operations.
The 17-kilometer MRT-3 on Edsa moved 156.6 million passengers in 2010 alone.
