MINISTRY OF TRANSPORT AND WORKS GRANTS FARE INCREASE TO JUTC AND OTHER BUS AND TAXI OPERATORS

With the consistent rise in gas prices, cost of spare parts and insurance, the issue of an increase in fares have been contemplated for some time and so, Minister Pickersgill's announcement of just such an increase was not entirely unexpected.

In speaking to the press on Friday August 19, 2005, the Transport and Works Minister pointed to the cost of operating a transportation system such as the Jamaica Urban Transit Company (JUTC). He said that the Government of Jamaica spent some $6 billion in providing a transportation system for the approximately 800,000 persons who reside in the Kingston Metropolitan Transport Region (KMTR). The JUTC's operational cost is an estimated J$4.7 billion annually and of this amount the government provides support to the tune of $1.24 billion. This by way of assumed loan debt totalling $700 million, foregoing GCT and Fuel tax a cost of $220 million and assuming responsibility for replacement of buses and depots $320 million. This contribution represents 26% of operating cost and the JUTC recovers another 47% from the fare box, leaving a gap of $1.27 billion.

The Minister said that all aspects of the expenditure profile of the company have trended upwards. Since the last fare increases granted in 2003, the cost of fuel has gone up over 100%, tyres 10%, spare parts have gone up by 21%. Mr. Pickersgill added that the government has been absorbing those cost and that was a situation couldn't not be sustained indefinitely. It was also pointed out that the economic fare for operating a bus service such as the JUTC is much higher than that being charged and it would in fact require an increase of 127% to meet this cost. The Minister emphasised that with Government spending billions of tax payers dollars to develop this modern transportation system it must now take steps to protect the taxpayers investments. Filling the gap needed to meet its expenses will allow the JUTC to become a viable company.

The announcement was made that effective Sunday August 21, 2005, travelling within the KMTR on a JUTC bus would cost $50. This, as fares for 1st stage would moved from $30 to $50 and that for 2nd stage from $40 to $50, which represents a weighted average increase of 32%. The fare for children, pensioners and the physically challenged would remain at the flat rate of $15. Until the end of the MOU, March 31, 2006, public sector workers would pay a discounted flat rate of $35, through the use of Smart Cards. One of the reasons given by the Minster as to why the gap in meeting the company's expenses had to come from the fare box, is the fact that the service is not for the general public, but for persons in the KMTR. It would therefore not be fair to subsidise the company any further from the (all) taxpayers pockets.

Increases were also announced for route taxis, rural stage carriages and hackney carriages. For route taxis, the base rate (the amount charged for the first kilometre) was moved from $35 to $44 and the amount charged for each additional kilometre moved from $2 to $2.50. The fare for children, pensioners and the physically challenged remains at a flat rate of $25. Rural Stage Carriages will charge a base rate of $16.90 up from $13.50 and the charge per (additional) kilometre moved from $1.81 to $2.26. Fares for children, the physically challenged and pensioners will, as usual, be one half of the regular rate. As for hackney carriages the initial flat rate charged will move from $100 to $125. For each additional kilometre or part thereof the fare will move from $20 to $25. For each waiting period of five minutes the rate moves from $10 to $12.50. For a journey ending between 12midnight and 5 a.m., 25% will be added to the above rate.

The increases for Route Taxis, Rural Stage Carriers and Hackney Carriages represent a 25% increase on pervious fare structure.