MANAGING director of Jamaica Urban Transit Company (JUTC) Paul Abrahams says the State-run bus company is feeling the pinch of high gas prices and will run into problems by September when its fuel budget is expected to run out.

Abrahams told the Public Administration and Appropriations Committee (PAAC) on Wednesday that the JUTC is now paying up to 40 per cent more on fuel.

“We have really taken a hit with the fuel prices, because we’re seeing that our figures are moving at an almost 35 to 40 per cent increase in fuel prices. The reduced bus run-out has helped us in that aspect, but if we were in a position of running out 325 buses, we would be at the Ministry of Finance’s door already. We have taken a strong hit, even in our current situation…we’re going to be in a problem come September,” Abrahams said. At the same time, the company is paying up to 30 per cent of fuel costs in Special Consumption Tax.

The new toll rates, which came into effect on the weekend, have also put some amount of pressure on the bus company, forcing it to spend $600,000 more weekly, outside of its $194-million toll budget. Again, Abrahams pointed out that the situation would be worse if the JUTC had its optimal number of units running daily. The company currently rolls out 230 units per day.

“I think we might be able to balance it because we have less buses going through the toll, [and] at least ride the storm,” he said.

He also told the committee that the JUTC expects it will have the additional buses it desperately needs by the start of next year. According to the company’s report to the PAAC, 45 diesel buses, five electric buses, and three charging stations are scheduled for delivery in the third quarter of the current financial year.

The JUTC says it has seen some savings by eliminating two of its terminals in order to better monitor routes that use those facilities — route 88, which terminated at Sutton Street downtown, Kingston, and has been relocated to North Parade; and route 32B, which operated from North Odeon Avenue, and has been relocated to the Half-Way-Tree Transport Centre.

Additionally, due to a drop in demand for buses on three premium express routes which operated outside of the Kingston Metropolitan Transport Region, the bus company surrendered the road licences for three of the units for those routes, which it says will result in $360,000 saved during this financial year.

At the same time the company’s staff complement has dropped from 2,200 in 2016 to 1,767 at the end of March this year, reducing related costs to $1.96 billion, down from $2.22 billion as of January 2021. Abrahams noted that there was no staff rationalisation, and these separations were due to activities such as redundancies, resignations, and other factors.

Based on international standards of 2.5 staff per bus, the company would need approximately 2,400 people. Its current establishment is 1,680. Eighty-seven of those positions are temporary. Abrahams said the optimal number of staff that would be adequate to run the JUTC now is about 1,800 people.

He advised that the company has amassed significant savings from changes to its overtime policy, which saw only $88.4 million being spent on overtime hours out of the total of $218 million that was budgeted. Operation costs at the end of the 2021/22 fiscal period amounted to $10.7 billion, down from the budged $14.5 billion.

Furthermore, total expenses dropped from $9.9 billion to $9.448 billion as of the end of March this year, compared to the budgeted $13.68 billion.

The managing director said the company “has always been juggling”, and continues to run on a tight budget, based on the issues it has faced with over the years.