THE Supreme Court rejected a legal challenge to the fare-setting mechanism of the Light Rail Transit Line 1 (LRT-1) extension project, which runs from Baclaran to Bacoor, Cavite.
The ruling, written by Senior Associate Justice Marvic M.V.F. Leonen, denied a petition filed by Bagong Alyansang Makabayan, Representative Neri J. Colmenares, the Train Riders Network, and others, who had contested the Concession Agreement for the Manila LRT-1 Extension.
The petitioners had claimed the periodic fare adjustments provided for in the concession agreement violated due process due to the absence of a procedure for giving notice and conducting hearings.
The High Court upheld the authority of the Light Rail Transit Authority (LRTA), one of the respondents, to fix fares.
The other respondents were the Department of Transportation, former Transport Secretary Joseph Emilio A. Abaya, former LRTA administrator Honorito D. Chaneco, and Light Rail Manila Corp. (LRMC).
The court found that the Concession Agreement does not violate due process rules of the Public Service Act and the Administrative Code of 1987, which require notice and hearings for rate-fixing.
It said Section 20.3.b of the agreement provides a mechanism for applying for a fare increase, which still requires the grantors’ approval and obtaining all legally mandated “relevant consents,” including consent of third parties (like the public) and publication in accordance with applicable legal requirements.
Thus, any approval is subject to statutory notice and hearing requirements.
The plaintiffs also challenged the Transport department and LRTA’s assumption of real property tax liabilities for rail project assets.
The court found this arrangement valid and reasonable, citing the Build-Operate-Transfer (BOT) Law, which permits government assumption of taxes to entice private participation.
The LRT-1 Extension Project is a priority infrastructure project, and the revised implementing rules and regulations of the BOT Law explicitly permit direct government subsidies and other forms of support for solicited projects.
The LRT-1 Extension, Operations and Maintenance Project was approved by the National Economic and Development Authority Board on March 22, 2012. On Sept. 12, 2014, a Notice of Award was issued to LRMC. — Chloe Mari A. Hufana
