25% Fare Increase, Concessionary Fare Remains the Same

Minister of Transport, Works and Housing, Dr. the Hon. Omar Davies, has announced a 25 per cent increase in fares for the public transportation sector.

In respect of the Jamaica Urban Transit Company (JUTC), Cabinet has approved an increase from $80 to $100, which will take effect from Sunday, August 25.

However, Cabinet has taken the decision to hold the concessionary fare at the present level of $20 for students, the elderly and the disabled.

“Although the financial analysis demonstrates justification for an across the board increase, the Administration is mindful of the plight of the most vulnerable and the impact which this increase will have on the lowest income groups. The recognition has led to the decision not to move the concessionary fare from the present level of $20,” Dr. Davies said.

Outlining details of the increase today (August 19), at a press conference, held at the Ministry’s Maxfield Avenue offices, in Kingston,  Dr. Davies informed that Cabinet has approved fare increases of 25 per cent for route taxi operators, with effect from Sunday, August 25, 2013.

“Cabinet also approved a similar increase of 25 per cent to rural stage carriages again with effect from August 25. Children under the age of 12 years, students in uniform, disabled persons and pensioners will pay 50 per cent of the approved fares,” he said.

The last fare increase granted to operators of route taxi operators and rural stage carriages was in January 2010, when a 20 per cent increase was approved.

The Minister said that in respect of the adult fares on the JUTC as well as for the route taxi operators and the rural stage carriages, “the increase granted of 25 per cent represents the minimum justified, given the significant increases which have taken place in all inputs required for the provision of transportation services.”

For the  JUTC, the last fare increase was granted in April 2010 when there was a 60 per cent increase in the fare for adult passengers and a 33 per cent increase in the fare for concessionary passengers.

In the meantime, Dr. Davies stated that a critical factor which continues to limit the company’s ability to provide reliable service remains the low daily run out of buses, which on average currently stands at 250 buses.

“A specific commitment was given that on September 1, 2013, the turn out will be 350 buses. This increase will be facilitated by bringing into operation new buses which are now in the island as well as those which are currently being repaired with spare parts which have recently arrived in the island,” the Minister said.

He further informed that it is programmed that the daily turn out will be steadily increased to 400 buses, bolstered by the programme of rehabilitation of old buses which is being initiated through a collaborative effort between the JUTC and the HEART Trust/NTA.

In addition, Dr. Davies noted that it is recognised that revenues of the company are diminished by ‘leakage’ from the fare boxes, particularly where adults who should be paying full fare are benefitting from the concessionary fare.

He added that historically, commuters benefitting from the concessionary fares average a third of ridership. However, the most recent data indicate that commuters benefitting from concessionary fares now account for 55 per cent of ridership.

“This sharp increase in the percentage of total ridership accounted for by concessionary fares raises questions. It is imperative that this ‘leakage’ is eliminated. In furtherance of that objective, a cashless system is being introduced whereby all commuters who wish to qualify for the concessionary fares must purchase the electronic ‘smart’ cards through the designated outlets,” the Minister said.

Dr. Davies noted that details of the operation of Smart Cards will be provided by the end of August, before the beginning of the new school year.

The Minister also informed that directives have been given that immediate dialogue with the trade unions must be initiated to address aspects of the existing labour agreement which contribute to the losses of the company.

“The most blatant example is the guarantee of payment for a 40-hour work week, even if fewer hours are actually worked,” he said.

Meanwhile, Chairman of the JUTC, Rev. Garnet Roper, indicated that the 25 per cent increase in adult fare will increase the daily revenue by about 10 per cent if the 45 per cent of the ridership remains constant.

“We are going to be looking at some significant cost saving measures and we hope that will make the difference,” he added.