Sat | Aug 18, 2018

Put us out of our JUTC misery

Published:Monday | August 25, 2014 | 12:00 AM
Passengers queue to board a Jamaica Urban Transit Company bus in downtown Kingston last week. - Norman Grindley/Chief Photographer
Andrew Wheatley

FIRST-TERM Member of Parliament (MP) Dr Andrew Wheatley last year suggested that the Government consider divesting the Jamaica Urban Transit Company (JUTC), an albatross around the necks of taxpayers.

At the time, Wheatley, as a member of the Public Administration and Appropriations Committee (PAAC), argued that the Jamaican taxpayer should not be carrying the burden of subsidising the state-owned bus company.

His suggestion, perhaps because of the forum in which it was made, vanished even before Dr Garnet Roper, and members of the JUTC management team left the Parliament where they had been called to speak about the future of the company.

Wheatley, however, should not resist the temptation to chase those buses. In fact, it would be in order if he were to take a Private Member's Motion to the Parliament, calling for the appropriate committee to consider the future of the state-run bus company. If the motion is brought, which one hopes Wheatley will find the courage to do, the leadership of the House of Representatives should treat it as a matter of national importance.

The JUTC, according to Transport Minister Dr Omar Davies, is facing imminent closure and the increased fares which the company began charging yesterday are essential to keep its wheels turning. But no sooner had the announcement of an increase been communicated, the parliamentary opposition, its sympathisers, trade unions and unconnected Jamaicans lashed out at the act, calling it wicked.

The fare for adults is now $120, up from $100; children's fare is $30 up from $20 and senior citizens will have to pay half that of adults. Now, this is a far cry from the fares which were recommended by the Office of Utilities Regulation (OUR) that $131 should be the fare charged for normal (adult) passengers, $40 for concessionary passengers; and an average of $361 for premium services passengers.

Dollar devalued since

That was 2009. Then it took just under $90 to buy US$1. Today, it takes at least $112 to purchase US$1.

Since 2006-2007, the taxpayers have forked out $4.5 billion in budgetary support to run the JUTC. In the last two years, the Parliament approved a total of $1.1 billion in budgetary support to the JUTC, and it seems the company has got at least $900 million more, which is yet to come to the attention of the Parliament.

Davies said last week that, over the last 12 months, $2 billion in support has been given to the JUTC.

But outside of budgetary support, this albatross has been getting more than its fair share of support for capital expenditure to do projects such as the purchasing of buses and spare parts. This year alone, the JUTC is getting $3.1 billion to buy new buses. This is in addition to $1.8 billion it received last year and $2.1 billion in 2012-2013; $2.2 billion in 2011-2012; and $6.5 billion in 2010-2011.

Put another way, the total support from the taxpayers to the JUTC, which benefits mainly people in the Corporate Area, is more than $20 billion in less than 10 years. The last five years have seen the JUTC receiving $15.7 billion for capital expenditure alone.

Added to that, the JUTC last year benefited from $4.8 billion in PAYE (pay as you earn) write-off, having failed to meet its legal obligation for the payment of these taxes. Instead of paying over the money, which would have assisted in buying medicine for the hospitals, the JUTC used it to plug a gaping hole in its stomach.

The company is losing $150 million per month. Davies has provided data which indicate that the company's losses have worsened 22 per cent over the April to July quarter, when compared with the corresponding period last year. The losses for the four-month period this year is $685.1 million. This is an average of $171 million in losses per month.

Wheatley had said during the PAAC meeting that it was clear that the Government could not run an efficient bus company.

"Based on the information dating back to seven years ago, we are seeing where the JUTC is always in a hole, and you'll always have to come back to Government.

"Would it not be better for us to scrap the JUTC and privatise it, but take it off the hands of the Government?"

It is a most pertinent question today, one which I answer with a resounding 'YES!'

The real question is whether Jamaica can continue with the burden of this loss carrier. Davies and others have been skilfully flashing before our eyes, the ghosts of the past, saying that without a fare increase or support to the JUTC, the system could fall back to the ramshackled and chaotic days of public transport.

Options needed

The Gavel appreciates the argument that an ordered and efficient transport system is required, especially in the Corporate Area for socio-economic reasons, however I am not sold on the argument that the JUTC is either the best or the only option in delivering this service.

The motion, which is being proposed for Wheatley, could consider the creation of several clusters of routes which would be offered to private players in the transport sector. Investors who are given these clusters would have a responsibility to service all routes, whether they are lucrative or soft. The Transport Authority should then be given greater monitoring and enforcement roles to ensure that order is maintained and that the private operators are honouring their obligations to the commuting public.

Not only would the Government be selling the buses, they would be selling all assets owned by the JUTC, as well as the Jamaica Ultimate Tyre Company. This is not a time to get emotional about the JUTC; this is not a time to consider saving the unsaveable. It should be laid to rest like Air Jamaica.

Facing some amount of outcry, the Simpson Miller Cabinet, in a demonstration of poor leadership, has lowered the cost for seniors to ride the JUTC from $60 to $40, which Davies announced last Wednesday. This populist response is effectively to kick the can down the road rather than confront the issue of cauterising the wound which is gushing $10 million daily in subsidy losses. It is decisions like these which make it even more important for the Parliament to consider the question of the JUTC's future.

If Wheatley is not minded to take the motion, we hope a rural MP, whose constituents pay for the service but are not the beneficiaries, will step up to the plate.