Light Railway Manila Corp. (LRMC) said over the weekend the construction of the next phases of the LRT Line 1 Cavite Extension could be delayed over continued losses and the government’s failure to grant a fare adjustment.
LRMC president and chief executive Enrico Benipayo said the company waits for the government to pay claims, rebalance debts with lenders and adjust the concession agreement before the construction of phases 2 and 3 can proceed.
“Prior to implementing the actual physical build-out of phase 2, the rebalancing and repayment of the claims has to happen,” Benipayo said.
The firm is in talks with its lenders to refinance its debts. The government also initiated discussions with LRMC on the much-delayed fare adjustment, especially after major shareholder Metro Pacific Investments Corp. (MPIC) reported plans last week to divest its stake in the railway project.
Benipayo said investors are closely observing LRMC given the pipeline of other large public-private partnership (PPP) concessions like the North South Commuter Rail Metro Manila Subway Project and MRT 7.
“So obviously the government cannot afford for LMRC to fail. So that is what we are leveraging on” he said.
MPIC chairman Manuel Pangilinan expressed frustration over the delay in adjusting the fare for LRT Line 1, citing the principle of public-private-partnership (PPP) arrangement.
“The basic tenet of PPP is you’re asking for other people’s money to build a particular project… When you borrow people’s money, you have to pay for the use of that money. It’s as simple as that. If you’re not willing to then use your own money” Pangilinan said.
Earlier this year LRMC completed phase 1 of the Cavite Extension which added 6 kilometers of new track and five new stations—Redemptorist-ASEANA MIA Road PITX Ninoy Aquino Avenue and Dr. Santos (formerly Sucat). This extended the rail line’s alignment to 26 kilometers from the previous 20 kilometers.
The second phase of the extension includes the Las Piñas station and Zapote station, while the third and final phase is the Niog station.
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