THE REVIEW of the operations of the insolvent Jamaica Urban Transit Company by Swedish consultants, is now in the hands of the Minister of Transport. Two of three vice-presidents have resigned. FINSAC'S Patrick Hylton has been asked to be part of a team appointed "to restructure and place the JUTC on a sound financial footing that can be maintained on a sustainable basis."
The team may have been given a basket to carry water. The JUTC has been plagued with several internal problems. Management has been less than adequate. Last year's KPMG audit of the loss-making company found that weaknesses in the recruitment process had resulted in the employment of persons in positions for which they were not qualified. After the matter became public, the State Minister of Transport at the time publicly acknowledged that the company had been loaded with workers loyal to the governing party.
Accident rates have been high with several fatalities last year. At one point some 150 buses out of a fleet of 620 were out of service due to the company's inability to source spare parts. The company has just spent $200 million to install a cashless smart card collection system to very favourable public reception. Charges of the siphoning off of fare revenue by bus crews seem to have been largely unfounded.
The company was formed with much promise to bring order to the chaotic public transport system of inefficient franchises and illegal operators. The buses, even at peak hours, are generally running below carrying capacity. Fares are comparatively low. The public has preference for the competing route taxis, legal and illegal.
The JUTC cannot be solvent from earned revenue. Raising fares to even break-even level will only provide advantage to the competition and exacerbate the problem. Government's injection of funds may have to move from capitalisation and ad hoc infusion of support to stave of crises to a regular infusion of a subsidy to close the gap between earned income and expenditure. But these subsidies have a way of growing, with diminishing returns.
The JUTC is a victim of its external operating environment, an environment created by the political history of public transport in Jamaica. Having allowed the deterioration of public transport to breaking point and the mushrooming of parallel systems, well-meaning corrective measures are now facing a losing battle.
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