FINAL REPORT

LRT 1 SM North Station Ridership and Revenue Impact Assessment Study 9 June 2008

Prepared for: SM PRIME HOLDINGS, INC.

SM Corporate Offices, Building A 1000 Bay Boulevard, SM Central Business Park Bay City, Pasay City

Prepared by: TRANSPORT AND TRAFFIC PLANNERS, INC.

Room 410, J & F Divino Arcade, 961 Aurora Boulevard Cubao, Quezon City Telephone + (632) 490 6104; Facsimile + (632) 995 8311 Email: ttpi2003@yahoo.com; Website: www.ttpiph.com

9 June 2008

TABLE OF CONTENTS

TITLE Chapter 1 1.1 1.2 1.3 1.4 Chapter 2 2.1 2.2 2.3 Chapter 3 3.1 3.2 3.3 Chapter 4 4.1 4.2 4.3 Chapter 5 5.1 5.2 5.3 5.4 Chapter 6 INTRODUCTION LRT Line 1 North Extension Project Approach and Methodology The Study Team Structure of the Report EXISTING SITUATION AT SM NORTH EDSA Vehicle Traffic Flows at Key Intersections Pedestrian Movements Proposed SM North Station under the EDSA North Transit Study OPERATIONAL IMPACT OF NEW SM NORTH STATION Train Operation Station Requirements Incremental LRTA Costs RIDERSHIP ESTIMATION Basis of Ridership Study Model Revision Results of Ridership Estimation REVENUE ESTIMATION FINANCIAL IMPACT Incremental Costs Incremental Fare Revenues Incremental Station Commercial Development Income Financial Analysis CONCLUSIONS

PAGE 1 2 4 4

5 8 11

13 13 14

15 15 15

19 20 20 21 22

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ii

LIST OF TABLES

TABLE NOS. Chapter 1 1.1 Chapter 2 2.1.1 21.2 2.1.3 2.1.4 2.1.5 2.1.6 2.1.7 2.1.8 2.1.9 2.2.1 2.2.2 2.2.3 2.2.4

TITLE INTRODUCTION LRTA Ridership Forecasts EXISTING SITUATION AT SM NORTH EDSA 14-Hour Traffic Volume: West Ave. Section (Location A) 14-Hour Traffic Volume: EDSA (Location B) 14-Hour Traffic Volume: North Ave. Section (Location C) 14-Hour Traffic Volume: EDSA Section (Location D) 24-Hour Traffic Volume: West Ave. Section (Location A) 24-Hour Traffic Volume: EDSA (Location B) 24-Hour Traffic Volume: North Ave. Section (Location C) 4-Hour Traffic Volume: EDSA Section (Location D) Average Modal Shares: North and West Avenues Passenger Volume between EDSA/North Ave and SM Annex (24-hour Volume) Passenger Volume between EDSA/North Ave and MRT North Terminal (24-hour Volume) Passenger Volume between North Ave. Section Approaching EDSA North Intersection (24-hour Volume) Passenger Volume between West Ave. Section Approaching EDSA North Intersection (24-hour Volume) RIDERSHIP ESTIMATION Ridership Estimates for 2010, 2015 and 2020 REVENUE ESTIMATION FINANCIAL IMPACT Fare Revenues Summary of Cash Outflows and Inflows, PhP Millions Sensitivity Analysis

PAGE

6 6 6 6 7 7 7 7 7 9 9 10 10

Chapter 4 4.1 Chapter 5 5.1 5.2 5.3

16

19 20 20

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LIST OF FIGURES

FIGURE NOS. Chapter 1 1.1 1.2 Chapter 2 2.1.1 2.1.2 2.1.3 2.3.1 Chapter 4 4.1 4.2 4.3

TITLE INTRODUCTION LRT 1 North Extension Alignment General Location of LRT 1 SM North Extension EXISTING SITUATION AT SM NORTH EDSA Location of SM North EDSA Road Section Locations with Traffic Data 24-Hour Traffic Volume at Various Road Sections at EDSA Location of Proposed ENT Stations RIDERSHIP ESTIMATION Weekday and AM Peak Flows at North Extension Stations, 2010 Weekday and AM Peak Flows at North Extension Stations, 2015 Weekday and AM Peak Flows at North Extension Stations, 2020

PAGE

1 2

5 6 8 12

17 17 18

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Chapter 1
1.1

INTRODUCTION

LRT Line 1 North Extension Project On 28 November 2006 during a Cabinet meeting, the President approved the connection of LRT Line 1 and Metro Rail Transit (MRT) Line 3 by extending LRT Line 1 from Monumento to MRT 3 in North Avenue along Epifanio de los Santos Ave. (EDSA) in Quezon City. The LRT Line 1 north extension (Figure 1.1) involves the construction of an entirely elevated 5.71-kilometer viaduct from Monumento Station of Line 1 to North Avenue of Line 3, two new intermediate stations (Balintawak and Roosevelt) and a terminal station (Line 1 North Avenue Station). The Balintawak Station will provide modal interchange with bus and jeepney services entering Metro Manila from the north via the North Luzon Expressway (NLEX).

Figure 1.1: LRT 1 North Extension Alignment The LRTA Board, during its meeting of 1 August 2007, approved the PhP5.98 billion project cost for the 5.71-kilometer LRT 1 north extension and endorsed the Techno-Feasibility Study 1 results for submission to NEDA/ICC. The project was approved by the joint NEDA-ICC Technical Board and Cabinet Committee on 30 August 2007; and by the NEDA Board on 18 September 2007. LRTA has initiated the tendering of the three contract packages since October 2007 and expects contract awards by mid-May 2008. Balintawak and Roosevelt stations, which are the two intermediate stations, will be constructed with provision for mezzanine levels. The mezzanine level would provide areas for the power sub-stations, equipment rooms and commercial space, among others. The additional benefit derived from raising the vertical track profile to accommodate the mezzanine floor is also to optimize the operating power consumption during deceleration and acceleration of the trains at the approach and departure to/from the station, respectively. The unpaid area of the station mezzanine would also serve as the pedestrian walkway. The most recent Metro Manila transit system forecasts were carried out under the Techno-Feasibility Study of the LRT Line 1 North Extension Project. This study formulated the Mega Manila Public Transport Demand Model using the Japan International Cooperation Agency (JICA) STRADA version 3.0 software2, updated public transport surveys (2006-2007) and the calibrated results from the previous
1 2

LRTA (2007). Techno-Feasibility Study of the Line 1 North Extension Project, Final Report. System for Traffic Demand Analysis (STRADA), which was developed by JICA and made commercially available since 1997 for use in urban transport studies. 1

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future origin-destination person trip matrices developed in the 1996 Metro Manila Urban Transport Integration Study (MMUTIS). Mega Manila Public Transport Demand Model is presently owned by Transport and Traffic Planners, Inc. Table 1.1 shows the ridership estimates for the LRT/MRT lines in Metro Manila. Table 1.1: LRTA Ridership Forecasts
Mass Transit Line LRT 1 + North Extension MRT2 MRT 3 LRT 1 South Extension LRT 7 BRT 1 BRT 2 Northrail 2010 Ave Trip Length, Weekday Ridership km 535,558 9.61 161,278 7.10 523,613 7.75 0 0.00 0 0.00 368,304 3.61 8,626 5.04 114,089 6.91 2015 Ave Trip Length, Weekday Ridership km 634,995 9.74 261,915 5.74 573,953 7.96 469,998 12.03 192,913 10.75 396,854 3.79 8,965 4.97 124,916 6.92 2020 Ave Trip Length, Weekday Ridership km 695,433 9.74 287,015 5.74 629,121 7.96 515,187 12.03 211,464 10.75 434,862 3.79 9,840 4.97 136,887 6.92

Source: LRTA, Techno-Feasibility Study of LRT Line 1 North Extension Project, July 2007

The SM Prime Holdings, Inc., the owner and operator of SM City North EDSA, has recently offered LRTA to finance the cost of construction of the proposed LRT Line 1 station in front of SM City North EDSA (Figure 1.2), subject to the approved design plans, specifications and standards set by LRTA. While LRTA recognized the need to improve accessibility of daily commuters congregating at the SM City commercial complex and the potential for increased ridership with the new LRT station, LRTA required an assessment study to determine the operational and financial impact of the LRT 1 SM North Station to the LRT Line 1 North Extension Project.

ED ED SA

SA

So u

th

or th

Bo

ou nd

un d

MRT-3

AV E

NU E

TRINOMA

LRT-1 NORTH EXTENSION

NORTH AVENUE

MINDANAO AVENUE

SM SUPER SAVER

MRT-7

ES

SM CITY

SM ANNEX

SM CYBERZONE

Figure 1.2: General Location of LRT 1 SM North Extension

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Noting the urgency of undertaking the new LRT station assessment study in time prior to the award of the contract packages for the LRT Line 1 North Extension Project by mid-May 2008, SM Prime Holdings, Inc. has approached Transport and Traffic Planners, Inc. (TTPI), the only consulting firm technically capable of conducting the study within the LRTA prescribed time period and has undertaken previous SM mall traffic impact studies 3 , to submit its technical and financial proposal. The concurrence on the technical and financial offer was issued by SM Prime Holdings, Inc. on 26 May 2008.

1.2

Approach and Methodology The technical approach and methodology are principally based on (i) a careful and detailed review of the requirements of LRTA; and (ii) the discussions/agreements during the preparatory meeting with SM Prime Holdings and LRTA officials held on 23 April 2008. More importantly, the sense of urgency is reflected by recognizing that LRTA would need some indicators of impact by mid-June 2008 to allow enough time issue changes in scope of the construction woks before awarding the contract packages for the LRT Line 1 North Extension Project (Monumento to North Avenue). To fully account for design/construction, operation and financial risks, the ridership forecasts prepared for LRTA in July 2007 has to be updated; and a sensitivity analysis has to be performed to produce the likely ridership and revenue forecasts with the proposed new LRT station in front of SM City North EDSA. The operational requirements, specifically: the LRT train operations, service frequencies and need for additional rolling stock have been calculated by MetroLink JV, the Consultant Team assisting LRTA for the tender assistance and supervision of the LRT 1 North Extension Project. Moreover, MetroLink JV has computed the additional cost of acquiring one (1) 4-car train and the incremental operating and maintenance cost covering train power consumption, train spare parts, train and station staffing. The tasks that were undertaken included: 1. Adjusting the computer-based Metro Manila Public Transport Demand Model to include the additional LRT station to the LRT 1 North Extension; 2. Calibrating the Model to actual 2007 LRT/MRT ridership; 3. Running the Model for the years 2010, 2015 and 2020 comparable to the runs made in the Techno-Feasibility Study for the LRT Line 1 North Extension Project (August 2007); 4. Determining the incremental ridership and revenues with the new LRT 1 SM Station; and 5. Comparing the future annual incremental fare revenues with the MetroLink JV-computed annual additional operating cost of PhP55.5 million and capital cost of PhP369.6 million for the required additional 4-car train to maintain LRT 1 system capacity. The Net Present Value approach was applied in comparing the incremental cost and revenue streams from 2009 to 2033 (same analysis period as in the Techno-Feasibility Study).

TTPI has completed the following traffic studies for SM: SM Marikina (2006), SM Taytay (2006), SM Fairview Annex 2 (2007), SM Calamba (2007), SM Cubao (2008), SM Rosales (2008), SM Baliuag (2008) 3 9 June 2008

1.3

The Study Team The TTPI study team was headed by Mr. George Esguerra as Transport Demand Model Specialist/Team Leader. The rest of the TTPI team members were as follows: 1) Engr. Nabor Gaviola - Public Transport/Financial Specialist 2) Mr. Edwin Esguerra - Modeling Research Associate 3) Mr. Cesar Gregorio - Public Transport Research Associate The core team is supported by TTPI support technical/administrative staff.

1.4

Structure of the Report This Report details the approach, methodology and results of the Ridership and Revenue Impact Assessment Study. The report comprises of the following sections: Chapter 1 - Introduction, summarizing the background, scope of work and key expert assigned to undertake the study; Chapter 2 - Existing Situation at SM North EDSA, presenting the prevailing transport and traffic condition; Chapter 3 - Operational Impact of New SM North Station, outlining the basis and estimates of additional train acquisition cost and incremental train/station operating and maintenance costs; Chapter 4 - Ridership Estimation, describing the assumptions, variables and results of transit ridership estimation using the STRADA-based Metro Manila Public Transport Demand Model; Chapter 5 - Financial Viability Analysis, detailing the assumptions and procedure in estimating future revenues, and results of the financial analysis of additional train capital cost and incremental train/station operating and maintenance cost and; and Chapter 6 - Conclusions, presenting the findings and conclusions of the ridership and financial impact analysis.

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Chapter 2
2.1

EXISTING SITUATION AT SM NORTH EDSA

Vehicle Traffic Flows at Key Road Sections SM City North is located at the intersection of EDSA, North Avenue and West Avenue. These roads which meet at the said intersection have huge traffic volumes. Traffic counts made in 2006 have generated data on the level of vehicular traffic volume along these roads. See Figure 2.1.1 for the location of SM City North in relation to the said roads.

Figure 2.1.1: Location of SM North EDSA Based on the 2006 traffic counts, the 14-hour vehicular volumes (6:00 am to 8:00 pm) of the said roads are shown in Tables 2.1.1 to 2.1.4. Refer to Figure 2.1.2 below for the specific locations of the road sections with the given traffic data. Table 2.1.1 shows the 14-hour classified traffic volume data at location A, i.e., West Avenue section.

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EDSA
1

North Ave.
1

D
2

C
2

ED SA
2

Figure 2.1.2: Road Section Locations with Traffic Data

Table 2.1.1: 14-Hour Traffic Volume: West Ave. Section (Location A) City Provl Priv Direction Cars Taxi/FX PUJ Truck Total Bus Bus Bus 1 5,470 2,636 1,337 14 41 23 211 9,732 2 6,961 2,387 1,720 15 12 145 11,240 Total 12,531 5,023 3,057 14 56 35 356 20,972

Direction 1 2 Total

Table 2.1.2: 14-Hour Traffic Volume: EDSA (Location B) City Provl Priv Cars Taxi/FX PUJ Truck Bus Bus Bus 36,033 10,616 2,169 2,220 747 157 541 39,082 12,361 2,030 2,766 1,062 227 855 75,115 22,977 4,199 4,986 1,809 384 1,396

Table 2.1.3: 14-Hour Traffic Volume: North Ave. Section (Location C) City Provl Priv Direction Cars Taxi/FX PUJ Truck Bus Bus Bus 1 16,532 8,104 3,547 76 214 2 13,663 6,408 3,071 135 240 Total 30,195 14,512 6,618 211 454

Table 2.1.4: 14-Hour Traffic Volume: EDSA Section (Location D) City Provl Priv Direction Cars Taxi/FX PUJ Truck Bus Bus Bus 1 33,276 11,104 2,223 1,329 641 516 4,178 2 30,376 12,712 3,210 2,275 892 212 1,795 Total 63,652 23,816 5,433 3,604 1,533 728 5,973

West Ave.
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A
1

B
2

Total 52,483 58,383 110,866

Total 28,473 23,517 51,990

Total 53,267 51,472 104,739

The adjusted 24-hour volumes of the above road sections are subsequently shown in Tables 2.1.5 to 2.1.8. Table 2.1.5: 24-Hour Traffic Volume: West Ave. Section (Location A) City Provl Priv Direction Cars Taxi/FX PUJ Truck Bus Bus Bus 1 7,527 3,809 1,785 21 61 33 337 2 9,578 3,449 2,296 22 17 232 Total 17,105 7,258 4,081 21 83 50 569

Total 13,573 15,594 29,167

Direction 1 2 Total

Table 2.1.6: 24-Hour Traffic Volume: EDSA (Location B) City Provl Priv Cars Taxi/FX PUJ Truck Bus Bus Bus 49,581 15,340 2,896 3,388 1,112 224 865 53,777 17,862 2,710 4,221 4,221 324 1,366 103,358 33,202 5,606 7,609 7,609 548 2,231

Total 73,406 81,941 155,247

Table 2.1.7: 24-Hour Traffic Volume: North Ave. Section (Location C) City Provl Priv Direction Cars Taxi/FX PUJ Truck Bus Bus Bus 1 22,748 11,710 4,735 116 342 2 18,800 9,260 4,100 206 384 Total 41,548 20,970 8,835 322 726

Total 39,651 32,750 72,401

Table 2.1.8: 24-Hour Traffic Volume: EDSA Section (Location D) City Provl Priv Direction Cars Taxi/FX PUJ Truck Bus Bus Bus 1 45,788 16,045 2,968 2,028 954 737 6,676 2 41,797 18,369 4,285 3,472 1,328 303 2,868 Total 87,585 34,414 7,253 5,500 2,282 1,040 9,544

Total 75,196 72,422 147,618

The above data show that 24-hour vehicular traffic volumes along the two EDSA sections are above 140,000 vehicles. Along North Avenue, the volume is about half of the EDSA volume while along West Avenue it is less than a quarter of the EDSA volume. Average modal shares along EDSA are: Cars Taxis/FX Jeepneys Buses Trucks : : : : : 63% 22% 4% 7% 4%

The above figures show the predominance of private cars along EDSA. For the other road sections, the average modal shares are as follows: Table 2.1.9: Average Modal Shares: North and West Avenues Road Section Modal Share (%) Cars Taxi/FX PUJ Bus Truck North Ave. 57.3 29.0 12.2 0.5 1.0 West Ave. 58.6 25.0 14.0 0.5 1.9

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Both North and West Avenues are crossing EDSA and it is observed that there is a reduction in the share of private cars and an increase in the jeepney share of the traffic volume. This indicates that there are more jeepneys plying along the said road sections. The same data source, i.e., traffic counts has given traffic volume data at various sections along EDSA between North Avenue and Monumento. The data are shown in Figure 2.1.3.

Figure 2.1.3: 24-Hour Traffic Volume at Various Road Sections at EDSA The above data show that EDSA sections intersecting North and West Avenues have much greater traffic volumes than the other EDSA sections in the North. This indicates the importance of the EDSA-North-West Avenue intersection where SM North EDSA is located. 2.2 Passenger Volume near SM North EDSA Based on passenger load counts conducted in 2006, passenger volumes along the main road sections approaching the EDSA/North Ave./West Ave. intersection have been estimated. The sections along EDSA have huge passenger volumes which are mainly served by public transport services, i.e., buses, jeepneys, taxis and FX. a) EDSA Section between EDSA/North and SM Annex

SM Annex 2 1 EDSA/North North Ave.

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Table 2.2.1: Passenger Volume between EDSA/North Ave and SM Annex (24-hour Volume) Passengers/Day Direction Public Private Cars Taxi/FX PUJ Total Bus Bus 1 109,891 57,762 27,602 91,846 22,847 309,948 2 87,774 62,455 56,991 159,360 9,393 375,973 TOTAL 197,665 120,217 84,593 251,206 32,240 685,921 The road section which is fronting the proposed SM station has an estimated passenger volume of almost 690,000 per day, for both directions. About 37% of this volume is served by public buses, 29% are car-riding, and 18% are using taxi and FX vehicles. b) EDSA Section between EDSA/North and MRT North Terminal

EDSA/North North Ave.

1 MRT North Terminal

Table 2.2.2: Passenger Volume between EDSA/North Ave and MRT North Terminal (24-hour Volume) Passengers/Day Direction Public Private Cars Taxi/FX PUJ Total Bus Bus 1 118,994 55,224 26,933 138,600 6,944 346,695 2 112,932 60,731 36,043 192,626 10,044 412,376 TOTAL 231,926 115,955 62,976 331,226 16,988 759,071 This section of EDSA has a higher passenger volume than the previous section described above, at about 760,000 passengers per day. Still the main mode of transport used is the public bus with a share of 44%, followed by private cars at 31%, taxi and FX at 15%. Jeepney passengers account for only about 8%. c) North Avenue Section

1 EDSA/North 2 North Ave.

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For the section shown in the above sketch, the passenger volume is given in Table 2.2.3. Table 2.2.3: Passenger Volume at North Ave. Section Approaching EDSA/North Intersection (24-hour Volume) Passengers/Day Direction Public Private Cars Taxi/FX PUJ Total Bus Bus 1 54,595 42,156 53,506 3,573 0 153,830 2 39,480 31,484 46,330 6,839 0 124,133 TOTAL 94,075 73,640 99,836 10,412 0 277,963 The passenger volume along this section is much lower than those along EDSA, owing to the fact that the road is a secondary road feeding into a primary road which is EDSA. With a daily passenger volume of about 280,000 passengers, the leading mode of transport used is the jeepney which caters to about 36% of the total section volume. It is followed by private cars at 34% and taxi/FX at 26%. d) West Avenue Section

EDSA/North

North Ave.

West Ave.

Table 2.2.4: Passenger Volume at West Ave. Section Approaching EDSA/North Intersection (24-hour Volume) Passengers/Day Direction Public Private Cars Taxi/FX PUJ Total Bus Bus 1 18,065 13,712 20,171 2,526 1,023 55,497 2 20,114 11,727 25,945 730 527 59,043 TOTAL 38,179 25,439 46,116 3,256 1,550 114,540 This is another secondary road feeding into the EDSA/North Ave/West Ave intersection. It has a very much lower passenger volume than EDSA, even lower than that of North Ave. Out of a total volume of about 115,000 passengers per day, a sizeable number about 40% are served by jeepneys. This is followed by private cars with a share of 33%, then by Taxi/FX at 22%.

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2.3

Proposed SM North Station under the EDSA North Transit Study A feasibility study for a proposed extension of the EDSA-MRT line from MRT North Terminal to Caloocan was conducted in 2006. The said extension has been called the EDSA North Transit (ENT) line. In the said study, several stations were proposed between the MRT North Terminal and the terminal in Caloocan West. These stations are: Bansalangin Roosevelt Kaingin Balintawak Gen. Malvar Monumento Caloocan North

The locations of these proposed stations are shown in Figure 2.3.1 The proposed Bansalangin Station is one that is located near SM North Annex along EDSA. This is the same station that is the subject of this analysis. It is noted that this proposed station is about 620 meters from MRT North Terminal.

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Figure 2.3.1: Location of Proposed ENT Stations

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Chapter 3 OPERATIONAL IMPACT OF NEW SM NORTH STATION

3.1 Train Operation Based on the calculation procedure described in the Techno-Feasibility Study for the Line 1 North Extension Project, MetroLink JV provided SM Prime Holdings the following computation: Train Running Time Acceleration + Deceleration per Direction Station Dwell Time per Direction Incremental increase for both direction Train running time (original design with 3 stations) Revised Train running time with new SM North Station = 40 sec = 40 sec = 160 sec = 86 min = 5,160 sec = 5,160 + 160 = 5,320 sec

Trains Required Ave Daily Ridership Ratio of Ave Daily Ridership to Line Capacity Passengers per hour per direction Train Capacity Passenger comfort factor Trains required (original design with 3 stations) Trains required (4 stations) Impact of new LRT 1 SM station Train Hours Trains required (original design of 3 stations) Train hours (based on operation plan) Train hours required (4 stations) Incremental train hours = 33 trains = 141,910 hr = 141,910 x (34/33) = 146,210 hr = 146,210-141,910 = 4,300 hr = 535,558 passengers = 22.5 (historical trend) = 23,802 = 1,250 = 20% =23802/1250x(5160/3600)x1.2 = 32.75 or 33 trains =23802/1250x(5320/3600)x1.2 = 33.75 or 34 trains = 1 additional train required

Incremental Train-km run Roundtrip loop length Ave train speed Incremental Train-km run = 39.738 km = 26.89 kph = 26.89 x 4,300 = 115,627 train-km

3.2

Station Requirement The new LRT 1 SM North Station will be designed with provision for mezzanine level, which would provide areas for mainly commercial space. The additional benefit derived from raising the vertical track profile to accommodate the mezzanine floor is also to optimize the operating power consumption during deceleration and acceleration of the trains at the approach and departure to/from the station, respectively.

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No provisions are being made to physically connect the future Line 7 to this new LRT 1 SM Station. However, the impact to the ridership as a result of the future line (Line 7) has been considered in the capacity computations of the system in the ridership estimation using the STRADA-based Metro Manila 3.3 Incremental LRTA Costs MetroLink JV provided SM Prime Holdings the following estimates of incremental costs due to the new LRT 1 SM North Station: Additional 4-Car Train Cost per LRV (car) Cost per train (4 cars) Power consumption cost Ave LRV (mixed fleet) per train Power consumption per km Cost per kwh Power efficiency Incremental power cost per year = 3.475 = 4.9 kwh/km = PhP9.70 = 15% = 115627 x3.475x4.9x1.15 x 9.7 = PhP 21,962,396.17 per year = PhP92.4 million = PhP 369.6 million

Spare Parts cost Spare parts for mixed fleet/train-km Incremental train-km Incremental spare parts cost per year = PhP 79.925 = 115,627 = 79.925 x 115,627 = PhP 9,241,487.98 per year

Staff Costs Train drivers Cleaners Workers Station ticketing staff Station guards Station manager 4 x PhP 297,900 16 x PhP 261,450 10 x PhP 418,950 15 x PhP 297,900 30 x PhP 261,450 5 x PhP 478,950 = PhP 1,191,600 = PhP 4,183,200 = PhP 4,189,500 = PhP 4,469,500 = PhP 7,843,500 = PhP 2,394,750 = PhP 24,271,050 per year

Total incremental staff cost per year

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Chapter 4
4.1

RIDERSHIP ESTIMATION

Basis of Ridership Study The ridership estimation used the Metro Manila Public Transport Demand Model developed under the Techno-Feasibility Study of the LRT Line 1 North Extension Project. The Metro Manila Transport Plan was also confirmed to still be realistic in terms of expected dates of actual operation.

4.2

Model Revision The transit network was revised with the inclusion of the new SM North Station under the LRT 1 North Extension Project. Moreover, the 2015 network was adjusted to reflect the LRT 7 connection at this LRT 1 SM North Station, instead of the previously assumed passenger concourse linking LRT 7 North Station with the LRT 1 Trinoma Station. Further model calibration was undertaken to reflect full 2007 EDSA bus passenger flows using recent MMDA traffic counts for Metro Manila. The calibration process was followed to ensure that the model data, particularly the OD matrices and assignment parameters, are suitable to arrive at comparable results to observed passenger volumes. The GEH statistics were determined by comparing the observed ridership and modeled assignment results for LRT Line 1, MRT 3 and EDSA bus corridors. GEH statistic is a formula used in traffic engineering, traffic forecasting, and traffic modeling to compare two sets of traffic volumes. The GEH Statistic gets its name from Geoffrey E. Havers, who invented it in the 1970s while working as a transport planner in London, England. Although its mathematical form is similar to a chi-squared test, is not a true statistical test. It is an empirical formula that has proven useful for a variety of traffic and transport planning analysis purposes. The GEH Statistic is given by:

Where M is the traffic volume from the traffic model (or new count) and C is the real-world traffic count For individual link flow, GEH values less that five (5) are considered god fit, while those between 5 and 10 are considered acceptable. 4.3 Results of Ridership Estimation Table 4.1 presents the ridership estimates, which indicates the comparable rail passenger forecasts from the Techno-feasibility Study for the years 2010, 2015 and 2020. Figures 4.1 to 4.3 show the daily and peak-hour passenger flows at LRT 1 north extension stations for the 2010, 2015, 2020, respectively.

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Table 4.1: Ridership Estimates for 2010, 2015 and 2020 (Prevailing Fare Level)
2010 Scenario Without project LRT 1 Ave. Week-Day Pax Ave. Pax-Hour/Day Ave. Pax-Km/Day Pax Trip Length, km Ave. Fare/Pax Daily Fare Revenue Annual Fare Revenue 535,558 146,959 5,144,647 9.61 14.3796 7,701,110 2,464,355,141 With project 542,933 149,303 5,226,706 9.63 14.3868 7,811,068 2,499,541,915 WP-WOP 7,375 2,344 82,059 0.02

109,959 35,186,774

2015 Scenario Without project LRT 1 Ave. Week-Day Pax Ave. Pax-Hour/Day Ave. Pax-Km/Day Pax Trip Length, km Ave. Fare/Pax Daily Fare Revenue Annual Fare Revenue 633,677 177,251 6,204,627 9.79 14.4444 9,153,084 2,928,986,899 With project 681,544 194,550 6,810,369 9.99 14.5164 9,893,565 3,165,940,903 WP-WOP 47,867 17,299 605,742 0.20

740,481 236,954,004

2020 Scenario Without project LRT 1 Ave. Week-Day Pax Ave. Pax-Hour/Day Ave. Pax-Km/Day Pax Trip Length, km Ave. Fare/Pax Daily Fare Revenue 694,089 194,152 6,796,368 9.79 14.4444 10,025,699 With project 746,927 213,074 7,458,804 9.99 14.5164 10,842,691 WP-WOP 52,838 18,922 662,436 0.20

816,992

Annual Fare Revenue 3,208,223,729 3,469,661,153 261,437,424 Note: Without project values above correspond to With project estimates in Techno-Feasibility Study

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Total Daily Passenger 11,278 5,524 9,991 2,536 2,536 North Ave. 16,265 16,265 218 North Ave. 1,399 1,399 5,268 North Ave. 28,303 28,303 453 North Ave. 2,434 2,434 771 453 8,961 5,268 419 218 4,866 0 0 0

1,276

116

29,213 Monumento 111,267 81,432 11,738 11,225 Balintawak

23,805 41,573

Congres-sional

12,527 29,710

SM North EDSA 18,311

14,363

AM Peak

475

970

2,500

110

2,512 Monumento 9,569 7,003 1,009 965 Balintawak

2,047 3,575

Congres-sional

1,077 2,555

SM North EDSA 1,575

1,235

Figure 4.1: Weekday and AM Peak Flows at North Extension Stations, 2010
Total Daily Passenger 23,426 20,752 6,679

1,751

162

55,963 Monumento 149,454 93,042 9,711 9,692 Balintawak

49,446 66,123

215

Congres-sional

26,020 51,207

SM North EDSA 31,865

16,654

AM Peak 2,015 1,785

574

151

14

4,813 Monumento 12,853 8,002 835 833 Balintawak

4,252 5,687

1,738

Congres-sional

2,238 4,404

SM North EDSA 2,740

1,432

Figure 4.2: Weekday and AM Peak Flows at North Extension Stations, 2015

149

859

10

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Total Daily Passenger 25,702 22,745 7,281 5,776 5,776 North Ave. 30,989 30,989 497 North Ave. 2,665 2,665 845 497 9,821 0

1,920

177

61,327 Monumento 163,227 101,380 10,684 10,583 Balintawak

54,223 72,430

Congres-sional

28,521 56,081

SM North EDSA 34,913

18,255

AM Peak 2,210 1,956

626

165

15

5,274 Monumento 14,038 8,719 910 919 Balintawak

4,663 6,229

1,906

Congres-sional

2,453 4,823

SM North EDSA 3,003

1,570

Figure 4.3: Weekday and AM Peak Flows at North Extension Stations, 2020

164

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Chapter 5
5.1

REVENUE ESTIMATION FINANCIAL IMPACT

Incremental Costs Based on the MetroLink JV estimates, the incremental costs attributable to the additional LRT 1 SM North Stations are: Additional Train Acquisition Cost (To be procured in 2009) Incremental train and station O&M costs (2010 to 2023) = PhP 369,600,000 = PhP 55,474,934 per year

5.2

Incremental Fare Revenues The LRT Line 1 ridership forecasts are described in detail in Chapter 4. These forecasts were used in conjunction with information regarding average trip length (in km) and total passenger-kilometers using LRT Line 1 to calculate the corresponding fare each passenger will pay. The ridership figures were used together with average fares based on average travel distance (Table 5.1) to calculate the total fare box collection. The total fares collected under the without SM Station condition are subtracted from the total fares collected under the with SM Station condition. The resulting difference is taken as the incremental financial benefit derived from allowing the construction and operation of the proposed LRT 1 SM North Station. Table 5.1: Fare Revenues
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ~ 2033 9.99 14.52 3,470

With SM North Station Average Pax Trip Length, km Average Fare per Trip, Pesos Total Revenues, PhP Million Without SM North Station Average Pax Trip Length, km Average Fare per Trip, Pesos Total Revenues, PhP Million With - Without Additional Annual Fare box Revenues, PhP M 9.61 14.38 2,464.00 9.65 14.39 2,597.40 9.68 14.40 2,730.80 9.72 14.42 2,864.20 9.75 14.43 2,836.00 9.79 14.44 2,929 9.79 14.44 2,984.80 9.79 14.44 3,040.60 9.79 14.44 3,096.40 9.79 14.44 3,152.20 9.79 14.44 3,208 9.63 14.39 2,499 9.70 14.42 2,632.40 9.77 14.44 2,765.80 9.85 14.47 2,899.20 9.92 14.49 3,032.60 9.99 14.52 3,166 9.99 14.52 3,226.80 9.99 14.52 3,287.60 9.99 14.52 3,348.40 9.99 14.52 3,409.20

35.187

75.54

115.89

156.25

196.60

236.954

241.85

246.75

251.64

256.54

261.437

5.3

Incremental Station Commercial Development Income With provision for mezzanine floor with 1,000 sq. meters of rentable commercial and monthly rate of at least PhP500/sq. m (space rental and concession fee), the annual income from space rental is estimated at PhP6 million. An additional PhP 1 million per year is assumed as income from station advertisements. For purposes of the financial evaluation, the total annual non-fare box income of PhP 7 million is assumed to accrue only to LRTA (no income shared with SM Prime Holdings).

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5.4

Financial Analysis The table below shows the train capital cost and O&M costs, as well as the incremental annual revenues, both fare and commercial development incomes, associated with the proposed LRT 1 SM North Station. Table 5.2: Summary of Cash Outflows and Inflows, PhP Millions
Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Additional Train Cost 369.600 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 55.475 35.187 7.00 75.540 7.00 115.894 7.00 156.247 7.00 196.601 7.00 236.954 7.00 241.851 7.00 246.747 7.00 251.644 7.00 256.540 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 261.437 7.00 NPV at 15% p.a. cost of capital O&M Costs Incremental Fare box Revenue Incremental Commercial Devt Income Cash Inflow -369.600 -13.288 27.065 67.419 107.772 148.126 188.479 193.376 198.272 203.169 208.065 212.962 212.962 212.962 212.962 212.962 212.962 212.962 212.962 212.962 212.962 212.962 212.962 212.962 212.962 448.83

Based on the financial analysis, the proposed SM station for the extension of LRT Line 1 is financially feasible, with a Net Present Value(NPV) of PhP 448.43 million at 15% cost of capital. The corresponding Financial Internal Rate of Return (FIRR) is 27.8%, higher than 15%. A sensitivity analysis was made and the results are shown in Table 5.3. Table 5.3: Sensitivity Analysis
Case Base Case 10% inc in Costs 20% inc in Costs 10% dec in Benefits 20% dec in Benefits 10% inc in Cost and 10% dec in Benefit 20% inc in Cost and 20% dec in Benefit
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NPV@15% (PhP Million) 448.43 375.77 303.12 330.93 213.44 258.28 68.14

FIRR (%) 27.80 26.09 24.26 25.90 23.30 23.84 17.91

20

The above table confirms the financial feasibility of the project. Even at the worst case where costs are increased by 20% and revenues are decreased by 20%, the FIRR at 17.9% is still above the assumed LRTA cost of capital.

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Chapter 6

CONCLUSIONS

The Ridership and Financial Impact Assessment confirmed that constructing the LRT Line 1 SM North Station has positive revenue impact to LRTA with the computed net present value of about PhP449 million. The financial analysis assumed that station construction costs, including the station equipment/facilities and installation costs, will be at the expense of SM Prime Holdings and therefore excluded from the analysis. On the other hand, all train and station-related operating and maintenance costs plus the cost of acquiring one 4car train will be the responsibility of LRTA and to be offset from the incremental fare revenue and station commercial development and advertisement incomes. As LRTA may not be in a position to immediately fund the procurement of the additional train (required to maintain the LRT 1 system capacity with the new SM North Station), support/assistance from SM Prime Holdings may be considered in the discussion leading to the finalization of the Memorandum of Agreement for the new LRT 1 station. Such assistance is crucial to limiting the implementation risk of LRTA. The principal operating risk of LRTA involves the implementation schedule of the LRT 7 Project, which contributes significant incremental rail passengers to LRT Line 1. To this date, the DOTC is finalizing the concession agreement after issuing the notice of award to the LRT 7 BOT proponent. Any delay in its implementation would mean a slower ramp-up of rail passengers at the SM North Station (LRT 7 was taken to be operational by 2012 based on the Metro Manila Transport Development Plan. On the basis of the above, including the consideration of implementation and operational risks, there appears to be no major impediment for LRTA to proceed with an arrangement with SM Prime Holdings for the construction of the LRT 1 SM North Station as part of the north extension project.

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