The Light Rail Manila Corp. (LRMC), the private operator of LRT-1, says it will try to dissuade its chairman, Manuel V. Pangilinan (MVP), from selling the company’s stake after the government rejected its request for a fare increase.
LRMC president and CEO Enrico Benipayo told reporters the company is “not in a good financial position,” citing losses from system upgrades and the ongoing Cavite extension project. He said government obligations under the public-private partnership (PPP) deal have not been met, which has added to LRMC’s financial pressure.
Benipayo said he will meet Pangilinan next week to present LRMC’s recovery plan. He noted that other major shareholders, including Ayala and Sumitomo, have already expressed support.
LRMC has asked for a fare hike to help cover an accumulated P2.17-billion fare deficit and fund continuing improvements. The government denied the request, arguing the upgrades and the 12-km extension are obligations under the PPP agreement.
Pangilinan earlier warned he may exit the project if losses continue, stressing that PPPs rely on private money that must earn a return. If the government cannot support that principle, he said, it should finance and operate the system itself.
Labor groups such as Bayan Muna and the Trade Union Congress of the Philippines oppose the fare increase, saying it would burden low-income commuters already struggling with rising prices.
LRMC, a joint venture of Metro Pacific, Ayala, Sumitomo, Macquarie, and JICA, took over LRT-1 operations in 2015 under a 32-year, P65-billion concession.
