Fares were increased at the LRT-1 early this month, which was only the second such hike since the private sector consortium took over in 2015.
“In 2024, it recorded a P3.2 billion impairment loss on its investment due to delays in fare adjustments and lower-than-expected ridership,” Ayala said in its annual report.
Ayala owns a 35 percent stake in the project alongside Manuel V. Pangilinan-led Metro Pacific Investments Corp. (35 percent), Sumitomo Group (20 percent), and Macquarie (10 percent).
Big picture
Fare increases are a potilcal issue, meaning projects like LRT-1 are exposed to government decisions that can affect their financial viability.
The LRT-1 consortium, known as Light Rail Manila Corp. (LRMC), made heavy investments to rehabilitate the LRT-1, the oldest light rail system in Southeast Asia.
Ayala considered exiting the LRT-1 project in recent years due to fare hike delays but eventually decided to hold off on the sale of its stake.
Second fare hike
Fares at the LRT-1 were raised last April 2, but LRMC President and CEO Enrico R. Benipayo explained this was only their second adjustment even though the concession deal allows fare increases every two years.
“In the past 10 years of operating and maintaining the 40-year-old railway line, this will only be the second time that LRMC has been allowed to implement fare adjustments for LRT-1,” he said in a statement, which was reported by BusinessWorld.
Last week, the influential Management Association of the Philippines expressed support for the fare hike.
LRT-1 Cavite extension has yet to reach Cavite
The LRT-1 project was turned over to the private sector in 2015 through a public-private partnership (PPP) scheme.
The P65 billion deal also required the consortium to extend the LRT-1 line to Cavite province.
It has so far opened five new stations: Redemptorist–Aseana Station, MIA Road Station, PITX Station, Ninoy Aquino Avenue Station, and Dr. Santos (formerly Sucat) Station.
But the three remaining stations that will extend the line to Niog, Cavite could take several more years as the government has yet to fully deliver the right-of-way, preventing construction from starting.
LRT-1 booked loss, ridership rose
Metro Pacific said in a separate report that LRMC swung to a loss last year, mainly due to non-cash expenses, even as revenues rose 14 percent to P2.9 billion.
Ridership also grew by 8 percent to nearly 324,000 daily passengers, though the company noted this was still “well below pre-pandemic levels.”
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
