DOTr to hold bidding for LRT-2 privatization this year 

The Department of Transportation (DOTr) is targeting to start the privatization of the operations and maintenance (O&M) of Light Rail Transit Line 2 (LRT-2) before the year ends, as the government eyes further improvements to the rail line, according to a report by Manila Bulletin.

Transportation Secretary Vince Dizon said the agency has tapped the International Finance Corp. (IFC) in crafting the guidelines and terms of reference (TOR) for the bidding process of LRT-2 O&M privatization through public-private partnership (PPP).

IFC, a unit of the World Bank Group (WBG) that provides investment and advisory services to the private sector, is currently talking with major companies in the country who have expressed interest in the project.

The invitation to bid for prospective companies will commence once IFC submits its final report on the project to the DOTr.

Under the leadership of then-secretary Jamie Bautista, the DOTr paused plans to privatize LRT-2 in a bundle with Metro Rail Transit Line 3 (MRT-3).

The Transportation department cited last year that the government was still planning to expand the rail network of LRT-2.

LRT-2, a 13.8-kilometer (km) rail line that connects Recto in Manila to Antipolo in Rizal province, is being planned to be extended on both sides.

Under the so-called West Extension Project, the government is looking to add three more stops from Recto, with proposed stations in Tutuban, Divisoria, and Pier 4.

On the eastern side, the government is looking to expand the rail line from Antipolo station, with proposed stations in SM Cherry Antipolo, Blue Mountain, and Cogeo.

“Dahil na rin sa extension nito…sa tingin ko kailangan na talaga nating i-PPP ito para maging long-term na maayos ang operations and maintenance ng LRT-2,” said Dizon at a Palace press briefing.

(Because of its extension, I think we really need to PPP this so that the operations and maintenance of LRT-2 can be managed properly in the long term.)

“Very important ‘yan kasi lumalaki ang ridership ng LRT-2, although hindi pa siya kasing taas tulad ng LRT-1 at MRT-3,” he added.

(That's very important because LRT-2 ridership is increasing, although it's still not as high as that of LRT-1 and MRT-3.)

Last year, LRT-2’s daily ridership averaged at about 140,000 passengers. In comparison, MRT-3 and LRT-1 each served over 370,000 and 320,000, respectively.

Talks of letting the private sector run LRT-2 once again emerged after recent technical problems that affected its operations.

On Wednesday morning, June 25, a technical issue disrupted the operations of the rail line, promoting the government to offer free rides for affected commuters.

Dizon said turning to PPP is the long-term solution to address such issues, citing the government’s inability to operate the transport system smoothly due to budget constraints.

However, despite handing it over to the private sector, the DOTr chief said consumers will not face sudden upward adjustments in fares.

“Pag mag-PPP tayo, hindi gano’n-gano’n na lang ang pagtaas ng presyo dahil ang gobyerno ang mag-regulate ng fares ng mga tren natin,” he said.

(If we enter into a PPP, fare increases won’t just happen arbitrarily because the government will regulate the fares of our trains.)