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MRT 3 revenue drops in 2018 due to delay in deployment of trains from China


By Ben Rosario

Revenue of the MRT-3 system dropped at its lowest at P2.068 billion in 2018 due to various reasons, including the failure of the Department of Transportation (DOTr) to harness the Dalian trains that were delivered a year before.

The Commission on Audit (COA) made this financial assessment of the MRT-3 operations even as it asked DOTr to impose liquidated damages on the delays in the operational use of 48 light rail vehicles delivered by the contractor of the Dalian deal.



“The revenue operaiton of the MRT system measured in terms of passenger ridership and ticket sales was at its lowest in CY 2018 with only an average of 13 out of the 24 train sets plying on the rail tracks, thereby, heightening the discomfort of the riding public,” COA said in the 2018 DOTr annual audit report.

“Furthermore, the 48 Dalian trains delivered in CY 2017 remained inoperable for an indefinite period despite the conduct of an Independent Safety Audit and Assessment by TUV Rheinland Philippines,” the audit agency stated.

In its analysis of the four-year operations of the MRT-3 system, the state audit body noted a decline of 26 percent in the annual passenger ridership in 2018.

From 140,152,161 in 2017, last year’s ridership was only 104,275,362.

“Likewise, revenue collections from ticket sales decreased by 26 percent from P2,779,352,308 in CY 2017 to P2,0068,664,043 in CY 2018,” the audit report stated.

According to COA the “regressions” were triggered by the decrease in number of train sets plying the rail tracks caused by the termination of the November 3, 2017 maintenance service contract with Busan Joint Venture, and implemented by Busan Universal Rail Inc.

Aside from the denial by MRT of “efficient effective and secured transportation systems to the public, the reduced number of trains had deprived government of additional financial resources to pay the MRT-3 equity rentals.

“It bears to note that the government subsidizes the deficiencies in revenue collections through the Subsidy for Mass Transit account in the General Appropriations Act,” COA said.

In 2018, government subsidized 64 percent worth P4,661,165,151 of the total equity rentals of P7,228,873,413.85.

Audit examiners said the DOTr Capacity Expansion (Capex) project aimed at decongesting the MRT system, and ensure safe and reliable transport system was affected by the delayed delivery of projects.

The Capex called for the delivery of 48 LRVs with on-board communications system and upgrade of the anxillary systems from the CRRC Dalian Co. Ltd and AsiaPhil Manufacturing Industries Inc, respectively.

Although the 48 LRVs have been delivered, its operations was put on hold while corrective measures recommended by the technical consultant TUV Rheinland Philippines were still being implemented.

“Not until the recommendations of the Technical consultant are fully addressed, the revenue operations of the Dalian trains remain indefinite. The more delays in the revenue operations, the more inconvenience it would cause to the riding public,” COA stated.

Further, the audit agency warned that unless the DOTr management is able to address the implementation of the CAPEX projects with urgency, revenue collection will continue to drop.

Reacting to the audit findings, the DOTr said it will impose and deduct from the amount to be paid to the Dalian contractor the corresponding liquidated damages.

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