THE Cabinet yesterday gave the solicitor general Michael Hylton the formal green-light to challenge the $12.5-billion arbitration award to Ezroy Millwood’s National Transport Co-operative Society and said that the necessary documents will be lodged with the Supreme Court within 14 days.

Hylton will also ask the court to stay the proceedings until a final ruling has been made, the information minister, Burchell Whiteman, told journalists after ministers had been briefed on the NTCS award by senior officials at their weekly meeting.

“Cabinet … has authorised the solicitor general to assemble and lead the best available legal team to act on the government’s behalf,” Whiteman said.

A tribunal — comprised of two former Appeal Court justices, Boyd Carey and Ira Rowe, as well as top lawyer, Angela Hudson-Phillips, QC — in an October 2 ruling awarded the NTCS $4.5 billion for loss of earnings between mid-1995 and March 2001 because the government failed to grant promised fare increases when the NTCS operated a major chunk of what was then the capital’s rickety bus service. The increase was to have allowed the bus operators a 15 per cent return on investment.

With interest pegged by the arbitrators to the Treasury Bill rates, the award, at the time it was delivered, was $12.5 billion and is now clocking up about another $8 million a day.

However, the government has argued that the NTCS did not live up to its side of the bargain — a point which the administration has signalled will be critical to its case in seeking the judicial review of the arbitrators’ award.

“Among the grounds on which the application will be based is that a pre-condition of a fare increase was that there should be specific improvements in the quality of service provided,” Whiteman said. “These improvements did not take place.”

The NTCS nominally grouped hundreds of bus owners in a single operating company, but with many of them functioning as independent operators it was difficult to bring discipline to the system.

Buses were overcrowded, crews were rude, ignored traffic rules and raced each other along routes for passengers.

When the government decided to withdraw the route franchises from existing operators and set up its own Jamaica Urban Transit Company, Millwood’s co-op sued, seeking more than $6 billion in unearned revenue for the first five years of the contract.

But as part of a withdrawal agreement, the government agreed to take the matter to arbitration, leading to the recent award.

Ironically though, NTCS surrendered the remaining five years of the franchise for $337 million and the government’s agreement to purchase 350 buses for under $200 million.

Additionally, the award was more than it cost the government to initially set up the JUTC.