Automatic Fare Collection System

The contactless AFCS (automatic fare collection system) will integrate the ticketing system between the LRT and the MRT and PNR. Passengers will no longer have to spend a lot of time lining up just to buy tickets, which can be bought from other retail outlets such as grocery stores.

A new type of ticket will also be used. Instead of the magnetized ones currently being used, the more durable "rechargeable contactless" credit cards will be made available. Just like cellphone cards, these train tickets are also "loadable," as they will be using a technology similar to the Octopus card system in Hong Kong.

Automatic Fare Collection System involves the decommissioning of the old-magnetic-based ticketing system and replacing the same with credit card rechargeable contactless-based smart card technology on LRT Line 1, MRT Line 2 and MRT Line 3, with the introduction of a centralized back office that will perform apportionment of revenues. The private sector will operate and maintain the fare collection system. On January 31, 2014, DOTC awarded the right to build and operate the smart-card system to AF Consortium.  The group comprises Ayala Corporation’s BPI and Globe Telecom, Metro Pacific's Smart Communications and Meralco FinServe, MSI Global, which developed automated fare collection systems’ software in Singapore and Bangkok, and SMRT, which operates Singapore’s mass transit system.

The government and the consortium of Ayala Corporation and Metro Pacific Investments Corporation (MPIC) signed on Monday, March 31 the concession agreement for the modernization of the Metro Rail Transit (MRT) and Light Rail Transit (LRT) ticketing system despite an appeal made by the SM group.

Transportation and Communications Secretary Joseph Emilio Abaya, Metro Pacific Investments Corporation chairman Manuel Pangilinan and Ayala Corporation chairman Jaime Augusto Zobel de Ayala signed the agreement for the P1.72-billion Automatic Fare Collection System (AFCS) at Edsa Shangri-La Hotel Monday.

The AFCS is the first Public-Private Partnership project awarded by government this year. The joint venture of Ayala and MPIC, AF Consortium, bagged the project in a bidding held last December 12.

Abaya said the concession agreement was finally signed after delays due to appeals filed by losing bidders, among them, the SM group.
“We have addressed all the issues,” he noted, stressing that the "project is in good hands."

The AFCS, patterned after mass rail transport payment systems in developed countries such as Singapore’s EZ Link Card, will upgrade the MRT and LRT ticketing system to substantially speed up payments, reduce queuing time and allow passengers seamless transfers from one rail line to another.

At the agreement signing, Pangilinan gave assurances that the project would be completed within the September 2015 deadline set by the Department of Transportation and Communications.

“Now that the bid is over and we are about to conclude this agreement, I think the hard work begins this afternoon. We have 18 months to deliver on this promise,” Pangilinan said.

For his part, Zobel said, “We are absolutely delighted to be here with the MPIC group. Hopefully this won’t be the last time that we will work together.”

This developed as the SM group filed its second motion, asking DOTC to reconsider the award of the project.

AF Consortium submitted a negative bid of P1, 088,103,900 for the AFCS, edging the negative P1, 088,000,000 bid of SM.

SM claimed its bid was better because it offered to pay the government the full amount upfront. It also claimed that AF Consortium's bid was conditional. "Under the terms of the AF Consortium bid, 72% of the total amount will only be paid to government in 2024 or 2025 and only if the conditional [passenger] volume is met. Otherwise, the government will not be able to collect anything at all," the company's president Hans Sy said in an earlier statement.

But DOTC spokesperson Michael Arthur Sagcal said, "The bid provided a schedule of the different options on how the transaction fee will be paid example x amount for 300 million to 350 million passengers, y amount for 350 million to 400 million. I guess SM chose a different structure. In any case, AF's structure met our requirements."

AF Consortium is eyeing to expand the use of the AFCS to include other transport modes such as buses.

“The timelines for this project -- and I hope you take this down -- target starting date is December 2014; this is all according to my briefing sheet. Target completion is July 2015; target start of AFCS implementation is September 2015.”

John Eric T. Francia, Ayala Corp. managing director and group head for corporate strategy and development, said that the AF Consortium will spend P2 billion on top of its original bid for the project.

Mr. Abaya told reporters on the sidelines of the event that they have de facto denied the second Motion for Reconsideration (MR) from SM Consortium given the contract’s signing.

“I’m sure that there’s a limit,” Mr. Abaya said of SM’s protesting the awarding.

“[DoTC Undersecretary Jose Perpetuo M.] Lotilla from legal [affairs] said that you are rightfully given a chance to do an MR; technically, you should incorporate everything into one MR. It cannot be by installment; we would take forever,” he said.

In a press release yesterday, SM Consortium said it had filed another MR with the DoTC, “seeking to further clarify” the agency’s position on the AFCS.

“The first MR was filed by the SM Consortium last 03 February 2014. A response finally arrived at 7:20 pm after office hours on Friday, 28 March 2014,” the consortium noted in its statement.

It also cited five issues, including that it had the better bid, that another consortium set increased ridership volume as a condition for payment of the project’s balance to the government, and that there was a conflict of interest.