Losses expected to mount

Observer senior reporter

Friday, March 23, 2018

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THERE has been speculation that the Jamaica Urban Transit Company (JUTC) will be seeking a fare increase shortly. However, there is no indication that this is a priority for the Ministry of Transport and Mining.

Minister of Transport and Mining Mike Henry has indicated to the Jamaica Observer's weekly Auto magazine that he is not supportive of an increase right now.

“I am not encouraging any application for fares increase at this time,” he told Auto yesterday.

According to media reports, JUTC Managing Director Paul Abrahams had confirmed that the State-run entity had approached the Ministry of Transport and Mining seeking an increase.

Henry said, however, he is instead focusing on other issues being dealt with by the bus company, including: a change in the type of fuel being used to ensure that they comply with international environmental standards, and reducing the release of smoke from bus engines.

In the meantime, the Jamaica Public Bodies book tabled in Parliament recently projects that the bus company will lose approximately $7 billion in financial year 2018/2019.

There was an unaudited loss of $2.7 billion in 2016/2017. For 2017/2018, which ends on March 31, there is an estimated loss of $3.1 billion.

The company's income is expected to increase during 2018/2019 from $5 billion to $5.3 billion, but its total operating expenses are projected to rise, at the same time, from $8.8 billion projected for 2017/2018 to $11.5 billion in 2018/2019.

Operating losses are expected to rise to the $9.6 billion projected for 2018/2019, compared to the estimated $6.1 billion estimated for 2017/2018. The company is expected to end up with a loss of approximately $7 billion in 2018/2019 compared to $3.1 billion estimated for 2017/2018 and from a loss of $2.7 billion in 2016/2017.

According to the Government's Jamaica Public Bodies book, the JUTC's operational plan for 2018/19 assumes an available fleet of 473 buses to achieve an average daily run out of 425 buses. This would be 21 less than the 446 on daily run out call for 2017/2018. However, the company plans to increase its passenger numbers to 58.1 million in 2018/2019, compared to the current 56.4 million.

The company's assumptions for 2018/2019 also include: secured funding for spare parts, a structured repair and maintenance schedule based on manufacturer's recommendations, and refurbishing of 15 buses for their return to service.

The JUTC's priority initiatives for the coming financial year include:

• Improving efficiencies and cost savings by outsourcing accident investigations to improve the effectiveness and reduce the costs of claims;

• Increase the number of Smarter Card Point of Sales locations by 99 outlets, for greater commuter access to recharge cards through third-party contracts;

• Assuming direct management of the Half-Way-Tree Transport Centre and the downtown Parade location to minimise cost and improve operational logistics; and

• Continuing to restructure the sub-franchise operations to reclaim high-density route corridors in the Kingston Metropolitan Transport Region.

The forecast highlights total revenue flows of $5.3 billion and total expenses of $14.9 billion, up from $11.1 billion.

The company is projecting using a staff of 2,129 to achieve to achieve its targets in 2018/2019, compared to the current 2,230 employees.

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