JUTC eyes $1.8-B reduction in gov't subsidyMonday, May 17, 2021
BY BALFORD HENRY
The Jamaica Urban Transit Company (JUTC) says it is seeking to reduce the government subvention required to keep its service on the roads.
In a statement issued over the weekend, Managing Director Paul Abrahams said the original budget required a subvention of $8.8 billion from the Government. However, this is to be reduced to $6.98 billion, a saving of approximately $1.8 billion.
He said, additionally, the company's projected expenses of $13.6 billion for 2021/22 have been reduced to $11.8 billion, a savings of $1.75 billion. However, the restated budget is subject to approval by the board of directors and the respective ministries.
“The matter of the fare box declining from over $400 million a month in the 2015-2016 fiscal year to some $120 million a month must be viewed in light of the ravaging impact of the pandemic,” Abrahams said in response to criticisms raised by Opposition spokesman on transport and works Mikael Phillips last Tuesday in the House of Representatives.
Phillips had said that “The JUTC is now in full decline, heading for a catastrophic crash which cannot be blamed on the pandemic, but rather on poor public transport policies and inept management.”
Added Phillips: “Revenue is down, passengers are down, bus availability is down, and bus run has dropped to 50 per cent of where it was five years ago. In truth, overall the company is down by a half in bus operations and by more than two-thirds in [its] fare box revenue.”
Abrahams, in his response, said: “We have seen a 54 per cent fall-off in revenues from the fare box and charter revenues have taken a 268 per cent hit [costing] more than $180 million per annum. The JUTC, in response to this revenue fall-off, has successfully implemented a number of strategic measures aimed at reducing our operating expenditure.”
In a response to Phillips's question about whether the company will meet the fare box projection for $2.4 billion this fiscal year, Abrahams said that last year (2020/21) the projection was $1.47 billion. But, given the current circumstance in which the service operates, it will have to create a revised budget for 2021/2022.
He said he agreed with Phillips that the JUTC must never return to the 'lick shot' era of the 1980s, and this is why it is pursuing avenues to diversify and modernise its operations.
“To date, we have introduced compressed natural gas buses, Wi-Fi on buses, and continue to explore possibilities with our stakeholders to introduce biodiesel and electric units,” he stated, insisting that the management of the company “remains committed to doing all we can to keep the JUTC viable, with the guidance of the Transport and Mining Ministry and the oversight of the JUTC board”.
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