MANAGING Director of the Jamaica Urban Transit Company (JUTC) Colin Campbell has said that the $756,000 annual fee that the Government-owned bus company is asking of sub-franchise holders is "peanuts" compared to the earnings that the operators are getting from their routes.
Pinpointing the 140 sub-franchise operators that ply Portmore routes, Campbell stated at a press conference on Friday that, "$750,000 per year from a Portmore route is diddly-squat. Nothing. They have a significant economic opportunity on those routes, thanks to JUTC".
The operators went to court to try to turn back the hike in fees from $280,000 per annum to $756,000, claiming that it was exorbitant and arbitrary.
He argued that based on the JUTC's survey, the Portmore market is approximately 60,000 adults per day.
"The JUTC carries 40,000 (of those passengers). So we know what their market is, we know the routes that we have given them, how many persons they are carrying and the yield," he stated.
JUTC Board Chairman Dr Garnet Roper backed the position, pointing out that as the exclusive franchise holder for the Kingston Metropolitan Region (KMTR) the JUTC must make decisions based on the numbers.
"When the operators get that sub-franchise (licence) the JUTC knows how many passengers that franchise is likely to service. It's no longer a guessing game. Every person taking those buses are counted at the end of the day and that's the approach we think has succeeded over the past couple of years," Roper contended.
Roper further reasoned that the JUTC is now saving some $25 million per month on fuel and that the private operators, too, have realised similar savings. "So he is in a far better position than he was a year ago," he remarked.
The chairman and managing director were speaking against the backdrop of the November 18 judgement that was handed down by the Supreme Court in favour of the JUTC after two transport associations tried to block the increase.
Rural Transit Association and VB Transport lost the application to have the decision for the fee hike reviewed by the court, and at the same time the court dismissed their application for an injunction preventing the increase.
Campbell explained that when the JUTC moved to reclaim some of its routes in 2013 it was licensing 147 Toyota Coaster buses at the time. This has been cut to 30. He said this means that these operators have been able to reap much higher yields. "Those routes were given with the knowledge that the yields would have been better but you do have to pay a higher fee. In giving them a route, we are losing money," he stated.
Campbell noted though that the franchise fee is not a replacement of the revenues that the JUTC is giving up, but that the operators must pay to maintain the franchise.
Furthermore, he demonstrated, "We have to protect them as well. For example, their crews use IDs just like our crews (we) have a responsibility to protect their revenues as well, so we offer them services. Sometimes our franchise inspectors actually take people off their units who don't want to pay."
Campbell said the argument from the operators that the JUTC is flexing regulatory muscles that it does not have is perhaps a perception that comes from the fact that the JUTC insists that operators cannot be allowed to run amok in the KMTR.
He stressed that the Transport Authority Tax remains the regulator for all operators, but "the JUTC is the exclusice licence holder, and we insist on the rules in the KMTR. That's why we set up a franchise protection unit to work with both the police and the TA so that people don't feel they can come into the KMTR and run up and down".
He cited examples of rural operators being in contravention of their licence by remaining in the KMTR to run routes for the remainder of the day after they have set down passengers brought in from other parts of the island.
"When we insist that this not be done sometimes they see us as trying to meddle in regulatory matters, but all we are trying to do is protect the franchise that we have through the exclusive licence given to us under the public passenger KMTR Act," Campbell explained.
He pointed out that the court had affirmed that, despite the regulatory powers of the TA to issue licences, the JUTC must also agree for these operators to enter the KMTR and set down passengers.
"The matter has now been adjudicated and we have to start where the court leaves us. It's no longer a matter of what they think or what we think," Roper insisted.
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