Gov't confirms JUTC fare hike

BY INGRID BROWN Senior staff reporter browni@jamaicaobserver.com

Thursday, March 18, 2010

CABINET is expected to conclude its deliberations next Monday on the new fare structure for the state-run Jamaica Urban Transit Company (JUTC).

However, it was not clear if commuters will start paying the increased fares on April 1, as was targeted.

"Bus fare increase will come back to Cabinet on Monday for an announcement shortly thereafter," Daryl Vaz, the minister responsible for information, told journalists at yesterday's post-Cabinet press briefing at Jamaica House in Kingston.

According to the information minister, the announcement date will be dependent on how quickly the new fare structure is to be implemented.

"April 1 is the target date but it may be a few days later because it all depends on the implementation date decided on by Cabinet," Vaz said.

The minister, at the same time, refused to say what are the likely percentage increase JUTC commuters would be required to pay.

"The rate is very fluid -- from zero to the sky -- but we are taking in consideration the harsh economic times that we are facing," he said.

Last week, a reliable Government source told the Observer that a recommendation was on the table for Cabinet to consider increasing adult fares to $110 up from $50 and $30 up from $15 for the concessionary group which includes children, senior citizens and the disabled.

However, another source said further consultations were to be held on the matter, which could see Cabinet settling on $90 for adult fares and $20 for the concessionary group.

JUTC bus fares last went up in 2005.

The increase in bus fares forms part of the agreement with the International Monetary Fund (IMF) for Government to sharply reduce its subsidy to the state-owned bus company, which has been operating at a loss for several years.

The JUTC last year asked the Office of Utilities Regulation (OUR) to approve a fare increase of $20 for adults, which would see it moving to $70, and that the rate for persons in the concessionary group be moved from $15 to $20.

The OUR last November gave approval for a 40 per cent bus fare increase, but warned that despite the increase the Government would have to provide between $1.3 billion and $3 billion in subsidy to the state-run bus company.

In its recommendation to Transport Minister Mike Henry, the OUR said the subsidy would only be applicable if the JUTC was granted its request for adult fares to be increased from $50 to $70, and the fares for concessionary passengers moved from $15 to $20.

The struggling bus company has projected an operating loss of $1.3 billion this year, but an increase in bus fares is expected to significantly reduce the JUTC's burden on the public purse.

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