LRT1 SM North Station - Ridership & Revenue Assessment Study

9 June 2008 i

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: [email protected]; Website: www.ttpiph.com

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

9 June 2008 ii

TABLE OF CONTENTS

TITLE PAGE Chapter 1 INTRODUCTION

1.1 LRT Line 1 North Extension Project 1 1.2 Approach and Methodology 2 1.3 The Study Team 4

1.4 Structure of the Report 4 Chapter 2 EXISTING SITUATION AT SM NORTH EDSA

2.1 Vehicle Traffic Flows at Key Intersections 5 2.2 Pedestrian Movements 8 2.3 Proposed SM North Station under the EDSA North Transit Study 11

Chapter 3 OPERATIONAL IMPACT OF NEW SM NORTH STATION

3.1 Train Operation 13 3.2 Station Requirements 13 3.3 Incremental LRTA Costs 14

Chapter 4 RIDERSHIP ESTIMATION

4.1 Basis of Ridership Study 15 4.2 Model Revision 15 4.3 Results of Ridership Estimation 15

Chapter 5 REVENUE ESTIMATION FINANCIAL IMPACT

5.1 Incremental Costs 19 5.2 Incremental Fare Revenues 20 5.3 Incremental Station Commercial Development Income 20 5.4 Financial Analysis 21

Chapter 6 CONCLUSIONS 22

9 June 2008 iii

LIST OF TABLES

TABLE NOS. TITLE PAGE

Chapter 1 INTRODUCTION 1.1 LRTA Ridership Forecasts 2

Chapter 2 EXISTING SITUATION AT SM NORTH EDSA

2.1.1 14-Hour Traffic Volume: West Ave. Section (Location A) 6 21.2 14-Hour Traffic Volume: EDSA (Location B) 6 2.1.3 14-Hour Traffic Volume: North Ave. Section (Location C) 6 2.1.4 14-Hour Traffic Volume: EDSA Section (Location D) 6 2.1.5 24-Hour Traffic Volume: West Ave. Section (Location A) 7 2.1.6 24-Hour Traffic Volume: EDSA (Location B) 7 2.1.7 24-Hour Traffic Volume: North Ave. Section (Location C) 7 2.1.8 4-Hour Traffic Volume: EDSA Section (Location D) 7 2.1.9 Average Modal Shares: North and West Avenues 7

2.2.1 Passenger Volume between EDSA/North Ave and SM Annex (24-hour Volume) 9

2.2.2 Passenger Volume between EDSA/North Ave and MRT North Terminal (24-hour Volume) 9

2.2.3 Passenger Volume between North Ave. Section Approaching EDSA North Intersection (24-hour Volume) 10

2.2.4 Passenger Volume between West Ave. Section Approaching EDSA North Intersection (24-hour Volume) 10


4.1 Ridership Estimates for 2010, 2015 and 2020 16 Chapter 5 REVENUE ESTIMATION FINANCIAL IMPACT

5.1 Fare Revenues 19 5.2 Summary of Cash Outflows and Inflows, PhP Millions 20 5.3 Sensitivity Analysis 20

9 June 2008 iv

LIST OF FIGURES

FIGURE NOS. TITLE PAGE

Chapter 1 INTRODUCTION 1.1 LRT 1 North Extension Alignment 1 1.2 General Location of LRT 1 SM North Extension 2

Chapter 2 EXISTING SITUATION AT SM NORTH EDSA

2.1.1 Location of SM North EDSA 5 2.1.2 Road Section Locations with Traffic Data 6 2.1.3 24-Hour Traffic Volume at Various Road Sections at EDSA 8 2.3.1 Location of Proposed ENT Stations 12


4.1 Weekday and AM Peak Flows at North Extension Stations, 2010 17 4.2 Weekday and AM Peak Flows at North Extension Stations, 2015 17 4.3 Weekday and AM Peak Flows at North Extension Stations, 2020 18

9 June 2008 1

Chapter 1 INTRODUCTION 1.1 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 Study1 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 LRTA (2007). Techno-Feasibility Study of the Line 1 North Extension Project, Final Report. 2 System for Traffic Demand Analysis (STRADA), which was developed by JICA and made commercially

available since 1997 for use in urban transport studies.

9 June 2008 2

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

2010 2015 2020 Mass Transit Line

Weekday Ridership

Ave Trip Length,

km Weekday Ridership

Ave Trip Length,

km Weekday Ridership

Ave Trip Length,

km LRT 1 + North Extension 535,558 9.61 634,995 9.74 695,433 9.74

MRT2 161,278 7.10 261,915 5.74 287,015 5.74MRT 3 523,613 7.75 573,953 7.96 629,121 7.96

LRT 1 South Extension 0 0.00 469,998 12.03 515,187 12.03LRT 7 0 0.00 192,913 10.75 211,464 10.75BRT 1 368,304 3.61 396,854 3.79 434,862 3.79BRT 2 8,626 5.04 8,965 4.97 9,840 4.97

Northrail 114,089 6.91 124,916 6.92 136,887 6.92Source: 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.

WEST A

VENUE

NORTH AVENUE

MIN

DA

NA

O

AVE

NU

E

EDSA North Bound

EDSA South Bound MRT-3

LRT-1NORTH

EXTENSION

MRT-7

TRINOMA

SM ANNEXSM CITY

SM CYBERZONESM S

UPE

R

SAVE

R

WEST A

VENUE

NORTH AVENUE

MIN

DA

NA

O

AVE

NU

E

EDSA North Bound

EDSA South Bound MRT-3

LRT-1NORTH

EXTENSION

MRT-7

TRINOMA

SM ANNEXSM CITY

SM CYBERZONESM S

UPE

R

SAVE

R

Figure 1.2: General Location of LRT 1 SM North Extension

9 June 2008 3

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).

3 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)

9 June 2008 4

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.

9 June 2008 5

Chapter 2 EXISTING SITUATION AT SM NORTH EDSA 2.1 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.

9 June 2008 6

Figure 2.1.2: Road Section Locations with Traffic Data

Table 2.1.1: 14-Hour Traffic Volume: West Ave. Section (Location A)

Direction Cars Taxi/FX PUJ City Bus

Provl Bus

Priv Bus Truck Total

1 5,470 2,636 1,337 14 41 23 211 9,7322 6,961 2,387 1,720 - 15 12 145 11,240

Total 12,531 5,023 3,057 14 56 35 356 20,972

Table 2.1.2: 14-Hour Traffic Volume: EDSA (Location B)


Provl Bus


1 36,033 10,616 2,169 2,220 747 157 541 52,4832 39,082 12,361 2,030 2,766 1,062 227 855 58,383

Total 75,115 22,977 4,199 4,986 1,809 384 1,396 110,866

Table 2.1.3: 14-Hour Traffic Volume: North Ave. Section (Location C)


Provl Bus


1 16,532 8,104 3,547 76 - - 214 28,4732 13,663 6,408 3,071 135 - - 240 23,517

Total 30,195 14,512 6,618 211 - - 454 51,990

Table 2.1.4: 14-Hour Traffic Volume: EDSA Section (Location D)


Provl Bus


1 33,276 11,104 2,223 1,329 641 516 4,178 53,2672 30,376 12,712 3,210 2,275 892 212 1,795 51,472

Total 63,652 23,816 5,433 3,604 1,533 728 5,973 104,739

EDSA North Ave.

EDSA

West Ave.

DC

A B

1

2

1

2

1

2

1

2

9 June 2008 7

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)


Provl Bus


1 7,527 3,809 1,785 21 61 33 337 13,5732 9,578 3,449 2,296 - 22 17 232 15,594

Total 17,105 7,258 4,081 21 83 50 569 29,167

Table 2.1.6: 24-Hour Traffic Volume: EDSA (Location B)


Provl Bus


1 49,581 15,340 2,896 3,388 1,112 224 865 73,4062 53,777 17,862 2,710 4,221 4,221 324 1,366 81,941

Total 103,358 33,202 5,606 7,609 7,609 548 2,231 155,247

Table 2.1.7: 24-Hour Traffic Volume: North Ave. Section (Location C)


Provl Bus


1 22,748 11,710 4,735 116 - - 342 39,6512 18,800 9,260 4,100 206 - - 384 32,750

Total 41,548 20,970 8,835 322 - - 726 72,401

Table 2.1.8: 24-Hour Traffic Volume: EDSA Section (Location D)


Provl Bus


1 45,788 16,045 2,968 2,028 954 737 6,676 75,1962 41,797 18,369 4,285 3,472 1,328 303 2,868 72,422

Total 87,585 34,414 7,253 5,500 2,282 1,040 9,544 147,618 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 : 63% ▪ Taxis/FX : 22% ▪ Jeepneys : 4% ▪ Buses : 7% ▪ Trucks : 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

9 June 2008 8

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

EDSA/NorthNorth Ave.

2 1

9 June 2008 9

Table 2.2.1: Passenger Volume between EDSA/North Ave and SM Annex (24-hour Volume)

Passengers/Day Direction Cars Taxi/FX PUJ Public

Bus Private

Bus Total

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 Table 2.2.2: Passenger Volume between EDSA/North Ave and MRT North Terminal

(24-hour Volume) Passengers/Day Direction Cars Taxi/FX PUJ Public

Bus Private

Bus Total

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

EDSA/NorthNorth Ave.

2 1

MRT North Terminal

EDSA/NorthNorth Ave.2

1

9 June 2008 10

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 Cars Taxi/FX PUJ Public

Bus Private

Bus Total

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

Table 2.2.4: Passenger Volume at West Ave. Section Approaching EDSA/North Intersection (24-hour Volume)

Passengers/Day Direction Cars Taxi/FX PUJ Public

Bus Private

Bus Total

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%.

EDSA/North North Ave.

2

1

West Ave.

9 June 2008 11

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.

9 June 2008 12

Figure 2.3.1: Location of Proposed ENT Stations

9 June 2008 13

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 = 40 sec Station Dwell Time per Direction = 40 sec Incremental increase for both direction = 160 sec Train running time (original design with 3 stations) = 86 min = 5,160 sec Revised Train running time with new SM North Station = 5,160 + 160 = 5,320 sec Trains Required Ave Daily Ridership = 535,558 passengers Ratio of Ave Daily Ridership to Line Capacity = 22.5 (historical trend) Passengers per hour per direction = 23,802 Train Capacity = 1,250 Passenger comfort factor = 20% Trains required (original design with 3 stations) =23802/1250x(5160/3600)x1.2 = 32.75 or 33 trains Trains required (4 stations) =23802/1250x(5320/3600)x1.2 = 33.75 or 34 trains Impact of new LRT 1 SM station = 1 additional train required Train Hours Trains required (original design of 3 stations) = 33 trains Train hours (based on operation plan) = 141,910 hr Train hours required (4 stations) = 141,910 x (34/33) = 146,210 hr Incremental train hours = 146,210-141,910 = 4,300 hr Incremental Train-km run Roundtrip loop length = 39.738 km Ave train speed = 26.89 kph Incremental Train-km run = 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.

9 June 2008 14

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) = PhP92.4 million Cost per train (4 cars) = PhP 369.6 million Power consumption cost Ave LRV (mixed fleet) per train = 3.475 Power consumption per km = 4.9 kwh/km Cost per kwh = PhP9.70 Power efficiency = 15% Incremental power cost per year = 115627 x3.475x4.9x1.15 x 9.7 = PhP 21,962,396.17 per year Spare Parts cost Spare parts for mixed fleet/train-km = PhP 79.925 Incremental train-km = 115,627 Incremental spare parts cost per year = 79.925 x 115,627 = PhP 9,241,487.98 per year Staff Costs Train drivers 4 x PhP 297,900 = PhP 1,191,600 Cleaners 16 x PhP 261,450 = PhP 4,183,200 Workers 10 x PhP 418,950 = PhP 4,189,500 Station ticketing staff 15 x PhP 297,900 = PhP 4,469,500 Station guards 30 x PhP 261,450 = PhP 7,843,500 Station manager 5 x PhP 478,950 = PhP 2,394,750 Total incremental staff cost per year = PhP 24,271,050 per year

9 June 2008 15

Chapter 4 RIDERSHIP ESTIMATION 4.1 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.

9 June 2008 16

Table 4.1: Ridership Estimates for 2010, 2015 and 2020 (Prevailing Fare Level)

2010 ScenarioWithout project With project WP-WOP

LRT 1Ave. Week-Day Pax 535,558 542,933 7,375Ave. Pax-Hour/Day 146,959 149,303 2,344Ave. Pax-Km/Day 5,144,647 5,226,706 82,059Pax Trip Length, km 9.61 9.63 0.02

Ave. Fare/Pax 14.3796 14.3868Daily Fare Revenue 7,701,110 7,811,068 109,959

Annual Fare Revenue 2,464,355,141 2,499,541,915 35,186,774




Annual Fare Revenue 2,928,986,899 3,165,940,903 236,954,004




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

9 June 2008 17

Total Daily Passenger

AM Peak

Monumento Balintawak Congres-sional

11,2

25

11,7

38

2,50

0

81,4

32

14,3

63

18,3

119,

991

11,2

78

5,52

4

116 0

1,27

6111,267 41,573 29,710

12,52723,80529,213


965

1,00

9

215

7,00

3

1,23

5

1,57

585

9

970

475

10 0

110

9,569 3,575 2,555

1,0772,0472,512

North Ave.

16,2

652,

536

16,265

2,536

North Ave.

1,39

921

8

1,399

218

4,86

60

419

0

SM North EDSA

SM North EDSA

Figure 4.1: Weekday and AM Peak Flows at North Extension Stations, 2010 Total Daily Passenger

AM Peak


9,69

2

9,71

1

1,73

8

93,0

42

16,6

54

31,8

6520

,752

23,4

26

6,67

9

162 0

1,75

1

149,454 66,123 51,207

26,02049,44655,963


833

835

149

8,00

2

1,43

2

2,74

01,

785

2,01

5

574

14 0

151

12,853 5,687 4,404

2,2384,2524,813

North Ave.

28,3

035,

268

28,303

5,268

North Ave.

2,43

445

3

2,434

453

8,96

10

771

0SM North

EDSA

SM North EDSA

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

9 June 2008 18

Total Daily Passenger

AM Peak


10,6

84

10,5

83

1,90

6

101,

380

18,2

55

34,9

1322

,745

25,7

02

7,28

1

177 0

1,92

0163,227 72,430 56,081

28,52154,22361,327


919

910

164

8,71

9

1,57

0

3,00

31,

956

2,21

0

626

15 0

165

14,038 6,229 4,823

2,4534,6635,274

North Ave.

30,9

895,

776

30,989

5,776

North Ave.

2,66

549

7

2,665

497

9,82

10

845

0

SM North EDSA

SM North EDSA

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

9 June 2008 19

Chapter 5 REVENUE ESTIMATION FINANCIAL IMPACT 5.1 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 = PhP 369,600,000 (To be procured in 2009) Incremental train and station O&M costs = PhP 55,474,934 per year (2010 to 2023)

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 With SM North Station

Average Pax Trip Length, km 9.63 9.70 9.77 9.85 9.92 9.99 9.99 9.99 9.99 9.99 9.99

Average Fare per Trip, Pesos 14.39 14.42 14.44 14.47 14.49 14.52 14.52 14.52 14.52 14.52 14.52

Total Revenues, PhP Million 2,499 2,632.40 2,765.80 2,899.20 3,032.60 3,166 3,226.80 3,287.60 3,348.40 3,409.20 3,470

Without SM North Station

Average Pax Trip Length, km 9.61 9.65 9.68 9.72 9.75 9.79 9.79 9.79 9.79 9.79 9.79

Average Fare per Trip, Pesos 14.38 14.39 14.40 14.42 14.43 14.44 14.44 14.44 14.44 14.44 14.44

Total Revenues, PhP Million 2,464.00 2,597.40 2,730.80 2,864.20 2,836.00 2,929 2,984.80 3,040.60 3,096.40 3,152.20 3,208

With - Without Additional Annual Fare box Revenues, PhP M 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).

9 June 2008 20

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 Additional Train Cost O&M Costs Incremental Fare

box Revenue

Incremental Commercial Dev’t Income

Cash Inflow

2009 369.600 -369.6002010 55.475 35.187 7.00 -13.2882011 55.475 75.540 7.00 27.0652012 55.475 115.894 7.00 67.4192013 55.475 156.247 7.00 107.7722014 55.475 196.601 7.00 148.1262015 55.475 236.954 7.00 188.4792016 55.475 241.851 7.00 193.3762017 55.475 246.747 7.00 198.2722018 55.475 251.644 7.00 203.1692019 55.475 256.540 7.00 208.0652020 55.475 261.437 7.00 212.9622021 55.475 261.437 7.00 212.9622022 55.475 261.437 7.00 212.9622023 55.475 261.437 7.00 212.9622024 55.475 261.437 7.00 212.9622025 55.475 261.437 7.00 212.9622026 55.475 261.437 7.00 212.9622027 55.475 261.437 7.00 212.9622028 55.475 261.437 7.00 212.9622029 55.475 261.437 7.00 212.9622030 55.475 261.437 7.00 212.9622031 55.475 261.437 7.00 212.9622032 55.475 261.437 7.00 212.9622033 55.475 261.437 7.00 212.962

NPV at 15% p.a. cost of capital 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 NPV@15%

(PhP Million) FIRR (%)

Base Case 448.43 27.80 10% inc in Costs 375.77 26.09 20% inc in Costs 303.12 24.26 10% dec in Benefits 330.93 25.90 20% dec in Benefits 213.44 23.30 10% inc in Cost and 10% dec in Benefit

258.28 23.84

20% inc in Cost and 20% dec in Benefit

68.14 17.91

9 June 2008 21

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.

9 June 2008 22

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 4-car 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.

LRT1 SM North Station - Ridership & Revenue Assessment Study

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