THE INSIDE MAN

Desubsidize and Deregulate

Desubsidize and Deregulate image

Text: Tito F. Hermoso / Photos: | posted October 04, 2011 19:11

MRT fares subsidizing private cars?

With the recent plans to finally raise train fares to reduce the government subsidy to MRT fares, some opinion makers have argued that the subsidized fares of the MRT are not only subsidizing the MRT riders but are also a subsidy to private car motorists using EDSA as MRT ridership has reduced traffic. Really now?

If this is true, what did the EDSA motorist gain from this MRT subsidy? The MRT was one of those inelegant force-fit solutions to introduce Light Rail transit to a city lacking in through transit routes. Unlike the LRT-1, which is elevated all the way, the budget of the MRT dictated some portions to go underground, some above ground and some at grade. This resulted in EDSA motorists losing at least one lane in each direction and ended up with crooked and misaligned lanes in areas where there were stations. Considering the lack of merging abilities of many Filipino drivers, these misaligned portions always cause traffic jams and fender benders.

Moreover, the MRT project couldn't even "close the loop" with the LRT in Monumento, leaving it to the LRT-1 to extend into EDSA in order to come close to linking with the MRT in Trinoma some day.

As if this was not enough to compound the EDSA private motorists' problems, the ODD/EVEN scheme, which was supposed to be imposed only for the duration of MRT construction was not lifted as promised in 1999 but was replaced with the color coding scheme. Matters were made worse for the motorist when instead of the MRT replacing the abusive and unruly buses on EDSA, the buses were even given 2 exclusive yellow lanes to boot.

By virtue of the noise it makes and the bulk of the elevated tramway, the MRT has caused "urban blight" in some of the narrower sections of EDSA, although it is not as severe as what the LRT did to the even narrower Avenida Rizal and Taft Avenue. This urban blight is relatively less severe with the higher open skeleton design of LRT-2 on Aurora Blvd. With this urban blight, property prices along the railways turned iffy as urban noise and reduced sunlight became an issue. Of course commercial property prices near the stations improved but along with it is the nuisance of badly planned inter-modal bus-PUJ station stops and uncontrolled sidewalk vendors.

On the other hand, private motorists are actually fleeced to subsidize. The road users tax paid by them has greatly improved highway signage, safety, visibility, markings and pedestrian safety all over the country. The higher prices they pay for fuel subsidizes the cheaper and dirty fuel for the public utility sector.

If the private motorists were as organized and as "angry" as the cause oriented groups, they should be demanding their pound of flesh. If the private motorists were to truly benefit from a free flowing EDSA because of the alleged MRT subsidy, then they should demand to take those buses out. Of course, this is not possible now as EDSA is the only contiguous North-South transit route for province to province traffic. C-5 and C-3 are just as congested so they do not serve as alternatives to EDSA. With the amount of subsidy private motorists pay for the rest of the country, its about time that they get their money's worth by demanding the lifting of color coding and the reduction of those yellow lanes.

As sure as the sun setting at the end of the day, recent price hikes in prices of utilities, energy, VAT, tolls and fares has brought out the usual noisy protests. Many of these cause oriented groups have upped their game, getting better organized, more creative in their attention grabbing gimmicks and more sophisticated in their rabble rousing activist language which has its roots in the First Quarter Storm. You can almost predict that when it comes to global oil price hikes, Shell House in Salcedo Village, Makati is in for another routine pasting.

Despite sober explanations from government agencies about the rationality of deregulation and the effects of globalization, there will always be parties looking for some big fish to blame and opportunist politicians meaning to polish their populist credentials.

We have made our stand clear on regional subsidies being an unfair burden on those from other regions who do not benefit. For instance, why would a fisherman from Davao, cane planter from Negros and Coconut farmer in Albay subsidize the fares of the MRT? That is why DOTC Sec. Mar Roxas is right in pushing through with long delayed fare hikes so that the MRT will not decay and instead upgrade the service to increase the number of coaches.

But there may be a more holistic solution than fighting all these sectarian turf battles. Why not deregulate the fares of the transport sector? True, wildly gyrating prices are bad for stability and planning. But if they are market dictated; i.e. water, oil, LPG, electricity, - there should be no lags so therefore, there would be no long delays in service upgrades that could prevent the congestion and failures that the MRT has been experiencing for 5 years now. The Jeepney drivers will not need to coerce their fellow Jeepney drivers to strike every time they demand an oil price roll-back and raised fares.

With deregulation, government agencies will just need to deal with one more thing: the routine Blitzkrieg protests of the same "usual suspects" cause oriented groups whenever prices go up [but never when prices go down]. Pilipinas Shell has plenty of experience on this.