Daraine Luton, Senior Staff Reporter
HAVING SPENT more than $54 million over the past three years to settle accident claims, the state-owned Jamaica Urban Transit Company (JUTC) is still facing a massive pile up of similar claims which could further retard its operations.
The struggling bus company has projected an operating loss of $1.3 billion this year, and commuters will soon be asked to pay more for bus fares to reduce the financial burden that the JUTC places on the public purse.
That financial bind facing the JUTC is not being helped by the mounting accident claims.
Paul Abrahams, managing director of the JUTC, told The Gleaner that the bus company is now in possession of 476 claims for which persons are seeking a combined $136.8 million to settle damages as a result of JUTC bus crashes.
Besides those claims, several persons injured in accidents involving JUTC buses have not sought damages.
Abrahams told The Gleaner that 1,578 recorded accidents involving the JUTC have so far not attracted claimants.
"It is not the case that there is a huge set of claims against the JUTC and that we are not honouring them. If there is a genuine claim against the JUTC we investigate and we pay," Abrahams said.
The payments made in the last three years have been minor compared with funds projected by the JUTC for payment to third parties.
The company, in the 2007-2008 financial year, earmarked $557.7 million to pay for the settlement of claims.
However, after persons failed to come forward with claims for damages, the company revised its damage to third party provisions to $120 million in 2008-2009 and further to $117 in 2009-2010.
In explaining the difference between the amount paid out and the projections, Abrahams said many of the cases of accidents have not attracted claims for settlements.
"We may have scratched a fender, we may have scratched a light post. It does not mean, necessarily, that there is an impact accident; but everything has to be documented at the JUTC if there is any degree of accident," Abrahams said.
Transport Minister Mike Henry told the House of Representatives last week that between May 2005 and August 2007, 2,393 claims were submitted to the insurance carrier of the JUTC - Advantage General Insurance Company - for settlement.
He said 545 of those claims were settled and the remainder returned.
Henry added that between September 2007 and October 1, 2009, 1,359 claims were recorded, 125 of them were settled.
Parliament also heard last week that the self-insurance fund at the JUTC was depleted and that claims were being settled out of the company's operations budget. The self-insurance fund, which started with $100 million, was cut in half with one portion used in the company's operations and the remaining portion used to secure an overdraft account.
Unable to pay damages
Robert Pickersgill, the Opposition spokesman on transport, charged in Parliament that the JUTC was in such bad state that it is unable to pay damages to persons despite court orders.
"This situation cannot be allowed to continue. I know of lawyers who are trying to seize JUTC's property ... trying to seize the buses because they go to court and the court rule in their favour and they can't collect," Pickersgill said.
However, Abrahams has dismissed the assertion from Pickersgill. "That is not true. We have no problems when it comes to settling our claims, absolutely none," Abrahams said.
"Every claim that we have right now is being honoured, being settled, being paid out as best as we can. There is nobody hounding us down and coming to seize our buses. There is no lawyer writing any nasty letters to us about they are going to seize this and seize that," the managing director added.