LAWYERS for the National Transport Co-operative Society yesterday signalled a willingness by the bus group to forego $8 billion in accumulated interest and accept only the principal of $4.5 billion it was awarded by a tribunal for the government’s failure to grant adequate fare increases when the NTCS ran a big chunk of the city’s bus service in the 1990s.

On that basis, the NTCS would get only 36 per cent of the settlement.

“Our position is that if there is a change of strategy and they want to make any reasonable proposal for our consideration, we will consider it,” an NTCS attorney, Patrick Bailey, told the Observer.

Asked to define a reasonable settlement, Bailey said: “The losses, as awarded, and reasonable in terms of a scheduled payment. We don’t want to derail the government. We don’t expect anybody to draw a cheque for US$4.5 billion just like that. So we will be looking at both quantum and a schedule of payment.”

The Cabinet on Monday formally gave solicitor-general, Michael Hylton the go-ahead to challenge the October 2 arbitration ruling by retired Appeal Court judges, Boyd Carey and Ira Rowe and prominent lawyer, Angela Hudson-Phillips.

The panel held that the government had breached its contract with the NTCS by not increasing bus fares to levels that would allow co-op’s members a promised return of 15 per cent on their investment. They were awarded the $4.5 billion for loss of earnings between mid-1995 and March 2001 when the NTCS relinquished its contract. But interest at Treasury Bill rates over the period is estimated to have pushed the total award to over $12 billion.

The government has said that among the arguments Hylton will make at a judicial review of the arbitrators’ findings is that the NTCS did not keep its end of the bargain on which a fare increase was predicated.

“… A precondition of a fare increase was that there should be specific improvements in the quality of service provided,” the information minister, Burchell Whiteman told reporters on Monday. “These improvements did not take place.”

Until it was taken over by the government’s Jamaica Urban Transit Company (JUTC), starting towards the end of the 1990s, Kingston’s bus service was notoriously bad. Although ostensibly grouped into three operating companies, owners ran their buses at their own pleasure, making it difficult to bring discipline to the system.

Crews were mostly unkempt and rude and drivers generally ignored road rules; racing towards bus stops to head off rivals was common.

But Ezroy Millwood’s NTCS insisted that the system was bad because the operators could not generate the profits to invest in upgrading fleet and training staff.

When the government sought to take back the franchises from the NTCS the group sued for nearly $7 billion, but dropped the court action in favour of going to arbitration as part of a settlement deal from the arbitration.

While the arbitrators awarded the NTCS $4.5 billion for loss of earnings during the first half of the contract, Millwood’s organisation accepted $337 million as the buy-back fee for the last five years of the franchise. The government also agreed to purchase 350, mostly old, buses from NTCS members for under $200 million.

Yesterday, Bailey said that the NTCS was continuing its calculation of the precise amount owed by the government on the basis of the tribunal award, notwithstanding the administration’s declaration that it will seek a review of the findings.

“We need to come to a final figure…,” he said.

“As regards the review, we’ll just take that one day at a time,” he added. “Until the papers are filed and served on us… what we have is a declaration of the government’s intention.”

Bailey said that the NTCS members had put in $5 billion in value when they acquired the operating franchises but were not allowed the cash flows to upgrade the system.

“People making this hullabaloo about the ramshackle (service) and everything, (but) if you don’t have the money (you can’t) improve the service,” he said.