No connection to Meralco row, says Palace
ANNOUNCING yet another government initiative to lower costs for consumers, President Gloria Macapagal Arroyo yesterday said tolls at the North Luzon Expressway (NLEX) would be cut and basically frozen for the next two and a half years.
A stronger peso, Mrs. Arroyo said in a speech during an egg festival in Minalin, Pampanga, has enabled operator Manila North Toll Ways Corp. (MNTC) to post a windfall that can be passed on to the public through lower road use charges.
"MNTC has been generating a financial windfall for its toll road operation. It’s clear that the MNTC can pass or part of this huge windfall to the public via reduced toll rate," she said.
"The MNTC secured dollar-denominated loans [that] rehabilitated NLEX at an average of P54 a dollar. And now it is P43 to a dollar. The high debt servicing cost was heavily factored in the computation of its toll matrix," the President added.
Citing findings by transport groups, the President said the debt servicing cost of MNTC was now 31% lower due to the "favorable exchange rate" and the "favorable interest rate regime."
MNTC is owned in part by the Lopez family, currently engaged in a dispute with a state pension fund over the high power rates charged by Manila Electric Co. The dispute reportedly has part of its roots in an alleged bias against Mrs. Arroyo by another Lopez firm, ABS-CBN.
Palace officials denied that the NLEX toll cut was part of a drive versus the Lopezes.
Lorelei C. Fajardo, Deputy Presidential Spokesman and Presidential Assistant for Central Luzon, said the government had been negotiating with the MNTC to lower tolls even before the Meralco row broke out.
"We would have wanted to implement the rate reduction when the peso-dollar exchange rate was at P40 to a dollar. That could have led to greater reductions but we have to follow certain processes," she said.
"My office (the Office of the Presidential Assistant for Central Luzon) is involved in the negotiations...
"We are not singling out the Lopezes. Apart from our move to lower power rates and toll fees, we are also pushing for the lowering of costs on text messaging. We are looking for means to help our people," she said.
Mrs. Arroyo said "The resulting stability of the toll rate will generate the NLEX with additional benefits: First, there shall be no increase of toll rates during the next two years and six months, and second, subsequent increase shall be in smaller increment owing to the new adjustment formula that is no longer subject to foreign exchange fluctuations."
MNTC public relations manager Kit Ventura, in a telephone interview, said the actual cut cannot be determined as the Toll Regulatory Board (TRB) still has to approve a new toll formula. Current computations take into account both inflation and exchange rates. The new formula will no longer be subject to foreign exchange fluctuations.
Mrs. Arroyo ordered the TRB to fast track approval of the new formula to provide relief to motorists affected by rising oil prices.
"Just for today, I directed the Toll Regulatory Board to approve a new toll rate adjustment formula. This should be done in a package of benefits for all types of vehicles using the NLEX," she said.
"I hereby direct the TRB to implement the downward adjustment of NLEX toll rate as a result of a new toll rate formula to take effect on June 30th. [This] will bring relief to the area within NLEX, particularly Metro Manila, North Luzon, [and] Central Luzon."
Mr. Ventura said the toll cut would not hurt MNTC’s margins as lower fees would mean increased traffic. Rate adjustments, he added, can be made every two years in line with a supplemental toll agreement.
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