Four years ago, I raised a question in this column: “Where do we lose most: from corruption in government, from tax evasion, or from traffic?” This was in relation to potential low-hanging fruits that could be prioritized by any president with only a few good men to deploy, and limited resources to use, in seeking quick but long-term solutions with optimum results.
At the time, I cited a 2011 study that estimated the economic losses from Metro Manila traffic jams at P140 billion yearly or about P390 million daily. Losses were attributed to wasted gasoline and electricity, lost labor hours, cost of traffic aides, withdrawal of potential foreign investments, missed business opportunities, and reduced capital inflow, among others.
As for taxes evaded, revenue losses were estimated at around 4% of the economy’s total output. At that time, this was placed at roughly P400 billion a year, mainly from nonpayment of income and consumption taxes (value-added tax) and under-declaration of income.
As for corruption, the average loss was estimated at 20% of the government’s national budget. In 2014, the national budget was around P2.2 trillion. One-fifth of the amount or 20% is roughly P440 billion. And all things as they are, any increase in the budget also results in an increase in losses from corruption.
Four years ago, based on the above figures, one can be left with the impression that corruption was the biggest problem. And, corruption losses may or may not include those resulting from government inefficiency, or the wasteful use of public resources. Note also that tax evasion — and traffic congestion — may also be resulting partly due to corruption.
To date, this may no longer be the case.
In 2016, traffic losses were estimated at a higher P2.4 billion daily, or 10 times the average just five years before, and these daily economic losses are estimated to hit P6 billion by 2030. Using the 2016 figure, we are reportedly losing an estimated P800 billion yearly from traffic congestion.
Meanwhile, the 2018 national budget is P3.8 trillion. Assuming, for the sake of discussion, that the estimated losses from corruption is still at 20% of the budget, then this puts it possibly at P760 billion this year. Couple that with traffic losses, then you are presumed to be losing an amount equivalent to about 40% of the national budget every year.
I make mention of these two items, traffic congestion and corruption, primarily in light of what is happening now to the Metro Rail Transit or MRT-3 system on EDSA. MRT was supposed to be one of the solutions to traffic congestion. Having more efficient public transport is seen as crucial to growing the economy. But, for the system to work efficiently, is should also be free from corruption.
To date, however, the MRT is reportedly down to maybe about five trains running to serve hundreds of thousands of commuters daily. This is from a maximum of 20 trains on the revenue line at any given time. Simply put, the system is operating at 25% of capacity. Why and how this happened is anybody’s guess. But, it seems like things have gotten worse after the government decided to change the maintenance provider yet again.
One can only wonder if MRT’s woes to date result more from faulty policy, poor planning and design, operation mismanagement, inefficiency, or corruption, or a combination of these woes.
In fact, the system has been problematic for two administrations now, and it remains uncertain if anyone is up to the challenge of initiating long-term solutions. Are we capable of solving this problem, ever?
The older Light Rail Transit or LRT-1 system on Taft Avenue is the oldest light rail system in Southeast Asia at over 33 years old. It started in December 1984, running initially from Baclaran to Central Terminal in Manila. Nearly as old is the Singapore MRT system that opened in 1987. LRT-1 was followed by the EDSA-MRT or MRT-3, which opened in 2000, now almost 18 years old.
These three lines, despite their age, are still in operation — but not without their problems. Singapore, in fact, had to bring in new trains, rehabilitate the lines, and add new lines just to cope with the growing demand from commuters. Not too long ago, it had to deal with stoppages as well as flooding in underground rail tunnels.
In the case of LRT-1 and MRT-3, the two oldest light rail systems in the country, we continue to operate their aging fleets — almost always beyond rated capacity — primarily out of necessity, given the high demand for their service. MRT-3, for instance, carries about 500,000 passengers daily when it is rated for just roughly 350,000. That is, if it has 20 trains running at any given time.
But, with just around five trains in service now, the MRT-3 is a mess. Why this happened is a wonder considering that the older LRT-1 doesn’t seem to be as problematic — or a controversial when it comes to maintenance providers. I can only hope that corruption is not the issue here.
With aging systems, maintenance is a crucial factor.
For efficiency and safety, the maintenance provider must overhaul cars, regrind tracks, and upgrade signaling systems, and continuously improve on daily maintenance.
At some point maybe in late 2016 or early 2017, I believe the MRT-3 actually had 20 trains on the revenue line, was running at rated capacity, and even with a few spare trains on standby in case of breakdown. But, the maintenance group responsible for achieving that has since been booted out. And since they got the boot, it seems the trains have been in bad shape.
There are reports as well that new trains bought in 2015 or 2016 can actually run on the lines with some adjustments in signaling systems, contrary to the claim that they cannot be used at all. Why they have not put to service is a wonder to me, or why no one seems to be looking for solutions beyond appointing a new maintenance provider, considering the urgency of the matter. Pity the poor souls who rely on the MRT-3 to get to work or top go home.
Admittedly, to completely overhaul the train system and to replace everything with new rails and rolling stock and signals will take a lot of money. But, even if the government is not in the position to foot the bill, I am sure there are groups in the private sector that will be willing to fund and do the project. Whatever option is chosen, it should be implemented now.
And, if this means raising fares significantly, then so be it. The riding public will just have to adjust and afford it, as opposed to waiting on the train platforms for nothing. Without higher fares, the government will just keep negotiating for lower costs for overhaul, repair, and maintenance. We have all seen what that has gotten us so far.
Marvin A. Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.
