Tue | Dec 7, 2021

Staff ripping off JUTC

State-owned bus company lost millions over last decade to pilferage

Published:Sunday | March 14, 2021 | 12:38 AMJovan Johnson - Senior Staff Reporter
Economist John Jackson.
File Economist John Jackson.

The state-owned Jamaica Urban Transit Company (JUTC) loses approximately $1 million every year because of theft or fraud involving employees, even as it has gobbled up almost $40 billion in taxpayer-funded bailouts since 2010.

But even amid criticism from the parliamentary Opposition, the company’s leadership is insisting that it has been implementing measures to fix the problem.

Since 2010, an estimated $10.9 million has been lost to theft and more than 450 employees subjected to disciplinary sanctions, ranging from being cautioned or warned to termination, the company told The Sunday Gleaner via an access to information request.

The most common offences were shortages in fare collection, ticket irregularities, misuse of company property and accidents.

Eleven matters are under investigation, including three that are before the courts.

One of the issues being probed involves two employees who were caught on a JUTC bus last month with several five-gallon bottles they took from their vehicles, the company said.

An investigation of three employees is also under way for fuel that allegedly went missing from buses after their tanks were filled prior to the units being handed to the workers.

Sixteen lawsuits, some still at litigation, were brought by staff against the JUTC since 2010.

Owen Smith, deputy managing director in charge of operations at JUTC, admitted that it has been a challenge to root out staff dishonesty, but said that progress was being made.

“Most of the measures that we have taken are data-driven covert operations so I can’t go into details,” he said, explaining that “for example, a bus that takes too much petrol over a particular period would then attract our attention and we would take steps to ensure that if anything nefarious is taking place, we identify the persons who are doing it and we take the relevant action”.

The JUTC’s monitoring and enforcement architecture comprises the auditing, security and franchise departments, which Smith contends is “robust”.

“We have regular spot checks. We have adjusted our protocols as far as it relates to even test-driving a bus; we have improved protocols in the issuing of fuel. We’re constantly assessing, reassessing,” he said, adding “nothing is never perfect”.

The pace of the introducing critical technology and systems to address the issue is not satisfactory for Mikael Phillips, the opposition spokesman on transport.

“Apart from the automated fare system that has been put into the buses, nothing has been done since then to upgrade the collection of money,” he argued.

“The losses the JUTC have been meeting is a matter of prioritising … to stem the losses. … But it is more a case of saying that you’re doing one thing and not doing it,” Phillips added, criticising the Robert Montague-led Ministry of Transport and Mining under which the JUTC falls.

Damning report

The issues of petrol, fare fraud and lack of proactive responses from the bus company’s management were raised in a damning auditor general report in 2020, which also flagged a range of human-resource violations.

Among other things, it was revealed that nine senior managers were not interviewed for the positions and six did not even have the minimum qualification requirements in violation of government policy.

The officials have until the end of this month to start getting qualified.

There is no report of anyone being held responsible for the findings which stirred public anger.

Despite the “many measures put in place to safeguard the fuel inventory, from time to time, we are plagued with theft as our depots are within volatile locations and perpetrators are always finding ingenious measures,” the company said in an update to Parliament’s Public Accounts Committee in January.

“However, we are actively trying to improve our systems,” the document said.

The company’s depots are based in Rockfort and Ashenheim Road in Kingston; Lyndhurst Road in St Andrew; and Portmore and Twickenham Park in St Catherine.

The JUTC was established in 1998 to bring order to the public transportation system within the Kingston Metropolitan Transport Region (KMTR), which comprises three parishes and more than 42 per cent of the country’s population.

But the entity has rarely been profitable, growing now to depend yearly on bailouts from taxpayers, which for the upcoming 2021-2022 fiscal year is projected to be $5.3 billion.

The company, which employs approximately 2,000 persons, is projecting an estimated loss of nearly $11 billion before government support, putting net losses at $5.6 billion.

Data obtained by The Sunday Gleaner show that the company, which subsidises the fares for certain categories of riders, such as students and the elderly, operated at a loss totalling $60 billion for the period 2010-2020

Over that same period, the amount taxpayers were forced to provide amounted to $39 billion.

Privatisation of the JUTC has been raised over the years, but the Holness administration shot that down in refuting rumours last year that the Government was entertaining a proposal from China Harbour Engineering Company.

“The JUTC is a Jamaican company and I have every intention for it to remain that way,” the transport minister told Parliament last April.

Privatisation ‘difficult’

Economist John Jackson said the issue of privatisation is a “difficult one”, considering the need to ensure access to low-income persons and the challenge to enticing private players.

“I don’t know how many reputable business persons are out there – locally or overseas – that would want to take on that task,” he said.

He said subsidies would be critical even in a private operation to “facilitate the lower socio-economic group who need help, but maybe persons even higher up who might find it a burden … . If it could be privatised, how would the operators be attracted to it and the government input forthcoming when due?”

Faced with rapid urbanisation, many countries, especially richer economies, subsidise their public transit systems to provide a cheap, reliable service that disincentivises motorisation while promoting more eco-friendly cities.

JUTC’s operations have been significantly scaled down as the Government introduced restrictions to slow the spread of COVID-19.

Bus fares for the period April 2020 to January 31 this year totalled $1.3 billion, 56 per cent per cent less than that collected for the similar period up to January 2020, company documents show.

The company is hunting $1.8 billion to buy parts “needed” for buses and an additional $16.2 million to clear its petrol debt with Johnson’s Petroleum, the documents produced last week show.

Up to November 30, 2020, the company owed approximately $274 million to suppliers, based on documents supplied in January.

The JUTC is served by more than 400 buses which carrying an average 250,000 passengers daily.

Not all the routes in the KMTR are serviced by the JUTC, which has instead permitted private operators to use through a subfranchising system.

More than 200 private operators have been operating on JUTC routes, but the company is now keen to add more subfranchise licences.

Seven routes in hilly regions of St Andrew and with low ridership are being considered, as well as 27 routes in Portmore.