Minister of Transport, Works and Housing, Dr. the Hon. Omar Davies, has disclosed that over the past six months, there have been steady improvements in the finances of the Jamaica Urban Transit Company (JUTC), with income moving from an average of $7 million to $10 million per day.
He also informed that there has been a gradual increase in the roll out of buses, which now stands at 370. “All these buses are now being maintained at the JUTC's own garage, at a savings of approximately $8 million per month,” he noted.
Opening the 2012/13 Sectoral Debate in the House of Representatives on June 19, Dr. Davies said this steady growth is part of a major long term plan to restructure the finances of the state-run bus entity.
He said the new Board and Management of the company have been given the mandate to improve the viability of the JUTC and “thus realise cost-effectiveness and efficiency."
The Minister pointed out that “it is not possible for this situation to be turned around immediately,” explaining that this would be worked on over the medium to long term, as his Ministry would be working with the Ministry of Finance to develop a platform for recovery.
He said that in terms of further improvements to the operations of the JUTC, there are certain steps which are scheduled to be implemented by the new Board and Management in the short term. “The most exciting of these is the forthcoming partnership between the JUTC and HEART Trust/NTA,” he added.
The partnership will see the implementation of a major bus refurbishing programme, facilitated by the Jamaican German Automotive School (JAGAS). The project will be housed at the Lyndhurst Road facility of the JUTC and will see the refurbishing of some 110 JUTC buses.
In the meantime, Dr. Davies pointed out that the new JUTC Board and Management have opted to terminate an initiative which was implemented by the previous administration, which would see buses being shipped to Brazil to be refurbished.
He told the House that the initiative was not cost effective, as shipping cost for each bus amounted to US$25,000 and the actual cost of refurbishing each bus was US$100,000, and noted that all five buses which were shipped, have been returned at a cost of US$125,000 each.
“It is impossible for an argument to be made that this refurbishing cannot take place in Jamaica, using Jamaican workmen,” he said.
The Minister advised that he has been seeking to alter the contents of an arrangement, inherited from the previous administration, which committed the Government to purchase 230 new buses from the Belgian manufacturer, VDL, at a cost of $11.8 billion.
“It has been impossible for me to find reason for this new order of buses, even as the company could not afford the spare parts to repair the existing fleet,” he said.
Dr. Davies said the Government has decided to honour the loan, “but we are seeking to alter the contents in order to make the deliverables consistent with our plans of improving the JUTC." Specifically, he said the Government is seeking to change the loan to import 65 buses this year and the remainder over the next four years.
“We will also seek to convert some aspects of the loan to the purchase of spare parts, and to proceed with technical assistance to support the bus refurbishing project,” the Minister informed.
By Athaliah Reynolds-Baker, JIS Reporter