Sona promises kept/not kept in transport sector

Big victories and unresolved issues marked the transportation scene under the tenure of President Aquino. The MRT 3 continues to draw the most flak. Its problems culminated in an accident in August 2014 when a train derailed in an incident that injured dozens and raised questions over its safety.

Big victories and unresolved issues marked the transportation scene under the tenure of President Aquino, but his administration is still hopeful that hard reforms implemented during his term will benefit the public in the coming years.

As the President delivers his final State of the Nation Address (Sona), there remain key issues such as the perennial traffic congestion, which Japanese consultants have estimated to cost P2.4 billion daily in Metro Manila alone.

This comes in tandem with worsening conditions at aging and congested mass railways.

But progress in other areas has been made. Amid congestion issues hounding Manila’s airport passenger terminals, some of which are already being rehabilitated, Philippine carriers have been removed from restrictions imposed by safety regulators in the United States and Europe.

Another relatively bright spot is the administration’s public-private partnership (PPP) program (which is never short of critics), where work with the various implementing agencies has allowed 10 projects, including big-ticket railway, airport and toll road deals, to be awarded thus far.

Transport bottlenecks

A review of Aquino’s previous national addresses showed that while the administration delivered on some areas, it has broadly failed in easing transportation bottlenecks in Metro Manila, where a large part of the country’s economic activity and population is concentrated.

Few pieces of modern transportation infrastructure have drawn the public’s anger as much as the 16-year-old Metro Rail Transit (MRT) Line 3 that traverses Edsa, the main thoroughfare of the capital region of about 12 million people.

MRT 3 is not the biggest of the three elevated trains serving Metro Manila but given the importance of its route, it is the busiest.

It serves more than 500,000 passengers a day, or more than half of the roughly 1 million commuters who use Metro Manila’s train systems daily.

MRT 3’s current load, relative to its 350,000 daily passenger design capacity, years of neglect worsened by legal quarrels with its private sector owner have resulted in constant glitches, breakdowns and long queues.

More recently, the Office of the Ombudsman ordered the filing of graft charges against former MRT 3 General Manager Al Vitangcol III and others over alleged irregularities in the awarding of an MRT maintenance contract.

Issues are also hounding the Light Rail Transit (LRT) Line 1 and, more recently, the Philippine National Railways (PNR), whose operations were suspended in May after coaches derailed on what was later blamed on stolen rail tracks.

MRT 3 accident

Yet, the MRT 3 continues to draw the most flak. MRT 3’s problems culminated in an accident in August 2014 when a train derailed in an incident that injured dozens and raised questions over its safety, despite an investigation that later showed human error to be the cause.

The Department of Transportation and Communications (DOTC), nevertheless, responded by slowing down trains and, after a string of incidents, MRT 3’s management further cut operations down to about seven trains from the usual 20 while waiting for new train orders from China to arrive starting 2016.

Despite its outsized problems, at least for Metro Manila commuters, the President has devoted a relatively small part of speeches during the Sona to solutions to solve the MRT 3 mess.

In the past five Sonas, the MRT 3 was given prominence in 2013, when the President made a case for a fare increase, citing billions of pesos in subsidies that could otherwise be used to develop infrastructure outside Metro Manila. By the end of 2014, the fare adjustment was implemented.

Promises on better roads, too, have yet to be realized.

Aquino, in 2012, promised that two elevated “connector roads” linking South Luzon Expressway (SLEx) and North Luzon Expressway, operated respectively by San Miguel Corp. (SMC) and Metro Pacific Investments Corp., would be completed “in 2015.”

And while SMC’s Skyway Stage 3 project is underway and may be done in the next two years, a series of regulatory misfortunes has hit Metro Pacific’s 8-kilometer elevated connector toll road, mainly due to disagreements within the government on how it should be implemented.

At present, the project cannot proceed until a Swiss challenge, scheduled later this year, is held.

Metro Pacific Tollways president Ramoncito Fernandez said that due to those delays, the expressway that would start at C-3 in Caloocan City and end in PUP Sta. Mesa in Manila, would not be finished before 2017.

Aquino also promised that transport hubs in Taguig, Quezon City and Parañaque, known formally as Integrated Transport Systems (ITS) under the PPP program, which will keep provincial buses out of Edsa, would be done “before I leave office,” based on his 2012 Sona.

However, the first ITS project, which will be located near the Manila-Cavite Expressway, is slated for completion by mid-2017.

MCX opens

The administration’s first PPP, the Muntinlupa-Cavite Expressway (MCX), formerly Daang-Hari SLEx Link, was awarded to Ayala Corp. in 2011, but is set to open only on Friday, July 24. Interoperability issues with other toll road operators contributed to the delayed opening.

Another deal, the Laguna Lakeshore Expressway Dike project, has also been set back but mainly as bidders sought more time given its complicated requirements.

Work in progress

Canilao admitted that the reform process was “painful” and remained a work in progress.

“It’s not perfect but it’s a lot better than where we came from,” she said. “We’ve created a template on how government can work better.”

She cited an April 2015 report by the Economist Intelligence Unit saying the Philippines ranked seven out of 21 in terms of having “the most improved regulatory and institutional frameworks.”

“The results should speak for themselves, there’s really this confidence now in the PPP process and they [international investors] see the Philippines as a major player in PPPs,” said Canilao.

Those results include the 10 PPP projects awarded thus far to the private sector valued at about $4.2 billion. These are the MCX, PPP for school infrastructure project (Phase 1), Ninoy Aquino International Airport (Naia) Expressway Project, PPP for school infrastructure project (Phase II), modernization of the Philippine Orthopedic Center, Automatic Fare Collection System, Mactan-Cebu International Airport, the LRT 1 Cavite Extension, the ITS-Southwest project, and the Cavite-Laguna Expressway.

From several of these projects, the government is set to generate about P64 billion in premium bid payments.

The government continues to drum up interest in more than 40 major PPP deals worth about $18.1 billion and the steady pipeline of projects should sustain the program beyond Aquino’s term, according to Canilao.

653-km South Line

On July 15, the DOTC rolled out the administration’s biggest PPP to date, the P171-billion South Line railway deal involving 653 kilometers of lines in Luzon, from Metro Manila to Legazpi, Albay, and down to Matnog, Sorsogon. A section links Calamba City to Batangas City.

The DOTC is also expecting participants for a provincial airport auction and the modernization of Davao’s seaport.

“It’s hard to deny that we’re going full-blast on all aspects,” Canilao said, adding that a plan to bid out the operations and maintenance of Naia would be pursued, pending the approval by the National Economic and Development Authority.

The size of these projects, however, means waiting several more years for the large mass-transit projects to come online, assuming no further delays.

Indeed, the DOTC itself admitted that it would take another five to 10 years to address the transportation infrastructure backlog, which could extend even beyond the next administration. For today’s average commuter, a healthy dose of patience should be in order. -Miguel R. Camus