Bus fares hiked
But increase won't stop JUTC losses |
STEVEN JACKSON, Observer staff reporter
Thursday, August 14, 2003
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| Transport Minister Robert Pickersgill makes a point during yesterday's press conference at which he announced a 50 per cent hike in fares on Jamaica Urban Transit Company buses which serve the Corporate Area. Beside him is Noel Hylton, JUTC board chairman. (Photo: Joseph Wellington) |
THE Government yesterday hiked bus fares by 50 per cent but the increase will only cut by just over one-third, the $115-million being lost by the Jamaica Urban Transit Company (JUTC) monthly.
According to JUTC executives who flanked Transport Minister Robert Pickersgill at yesterday's news conference, the fare increases will bring an additional $544 million in revenues to the JUTC's coffers. This would add to the $1.95 billion that the company was projected to earn for 2003/2004.
Bus crews will this Saturday start charging the new fares of:
* $30 for adults in zone one, up from $20;
* $40 for adults in zone two, up from $30; and
* $15 for children, students in uniform, the disabled and senior citizens, up from $10.
Pickersgill defended the increases, which were less than the 100 per cent recommended separately by the Office of Utilities Regulation and the JUTC board, saying that the Government has a social responsibility to those who cannot afford it.
"The Cabinet has opted for this new formula in financing the public bus system because we are aware that a higher increase at this time would have been very burdensome on low-income wage earners," Pickersgill told reporters. "It is very easy to say charge the full commercial fares, it does not work that way."
Pickersgill's defence of the fare hike was an obvious response to the Opposition spokesman on transport, Mike Henry's criticism that the Government, in addressing the fares, was ignoring fundamental inefficiencies at the company and that the true cost of providing the service was not known.
"When he speaks like that, well, I would like to know if it is his party's policy to let the fares run," Pickersgill said. "So let him say that. Let him say just that."
Last month, Finance Minister Omar Davies announced a $3.45-billion bail-out plan for the cash-strapped bus company and said that the state would take over its operational responsibilities. However, he made it clear that the JUTC's fare structure must be able to meet its operational costs.
Davies told reporters that the Cabinet had accepted a proposal for the finance ministry to assume responsibility for all capital, debts, and the buses. "I do not believe that one could ask for more in a subsidy," he said.
In assuming the debt, the Government was allowing the JUTC to meet its debt obligations.
According to official data from the finance ministry, the company was expected to lose $1.39 billion for the 2003/2004 financial year.
Over the past three years, it has accumulated billions of dollars in losses.
Yesterday, Pickersgill said that the bus company was improving efficiency. "First-quarter results showed that net losses were reduced by 18 per cent compared to budget," he said.
He also announced that the JUTC would be setting up a $50-million insurance fund to save on the $100-million to $120-million per year it pays in insurance fees.
The company has also cut its staff to bus ratio from 8.3 to 6.5 and that figure, Pickersgill said, would be reduced to six.
More than 90 million rides were taken on JUTC's roughly 450 buses last year in the Kingston Metropolitan Area where the service operates. This was, however, less than the previous year due to the increasing number of illegal transport operators.
"There is an estimated 16,000 illegal taxi operators, which cut JUTC's revenues," said Pickersgill. "We are devising stronger legislation to fight illegal operators."
Legal route taxi-operators, he said, will be granted fare increases in September.
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