DOTr rules out fare hike due to PUV modernization

A Department of Transportation (DOTr) official on Thursday allayed concerns that the government’s Public Utility Vehicle Modernization Program (PUVMP) would lead to higher fares once transport operators and drivers form cooperatives and corporations.

“No fare hike shall happen without undergoing the process of the Land Transportation Franchising and Regulatory Board (LTFRB). And with the implementation of our consolidation deadline, it is not expected to result in a fare hike at this time,” Transport Undersecretary for Planning and Project Development Timothy John Batan said at the Bagong Pilipinas Ngayon public briefing.

“We are giving a reminder to our commuters that the 300, 400 percent [fare] increase they are hearing about has no basis and we don’t expect that much of an increase in our consolidation and PUVMP,” he added.

READ: PUV modernization: Understanding defiance of operators, drivers

Batan said that the LTFRB would soon issue show cause orders to unconsolidated PUVs following the Dec. 31 deadline in preparation for the revocation of their franchises for noncompliance.

The PUVMP requires all PUVs to consolidate or form corporations or cooperatives to enable them to receive government subsidies, access credit facilities and obtain other forms of assistance to modernize their fleets.

Batan said PUV operators may still file their applications to consolidate this month, with the payment to follow later. The final consolidation report will be published next Monday. Drastic increase

He reiterated that unconsolidated PUVs would no longer be allowed to ply routes where 60 percent of the PUVs had already consolidated. If route consolidation was below 60 percent, the unconsolidated PUVs could operate until the end of January.

A think tank warned on Wednesday that minimum fares for jeepneys could go up by as much as P45 to P50 in the next five years should the government push through with the controversial PUV modernization program.

In a television interview over ANC, Ibon Foundation executive director Sonny Africa said that the estimated increases were based on the projected costs associated with the PUVMP, which seeks to replace old, dilapidated jeepneys with Euro-4-powered units pegged at P2.5 million each.

“Fares will be kept low at maybe P15, P20, P25 maybe for the first three to five years, but we fully expect that in five years or more, it would hit P45 to P50,” he stressed.

“Our basic computation there was that if it’s corporatized, you not only have pressure to repay the loans for the higher expense jeepneys, but it is also the increased profit motive, the profit premium being added to the fares on top of that,” Africa said.

READ: PUV consolidation deadline stays — DOTr

Currently, the minimum fare for traditional jeeps is P13, while modern buses charge P15. So a P45 to P50 increase would equal a 284 percent increase in fares.

According to Africa, the government needs to realize that fares are only as low as they are now because “the drivers are willing to accept those low fares to provide a transport service. “Moving to a corporatized setup increases the expenses for that, he said.

For LTFRB chair Teofilo Guadiz III, the projection made by a commuter group and Ibon was “statistically impossible” as he assured the public that imposing such an exorbitant fare would never happen.

“The current P15 minimum fare for modernized jeepneys is very far from the projected minimum fare of P50. This claim is false. It’s statistically impossible that modernized jeepneys would charge fares that high,” Guadiz said in a statement.

He stressed that in coming up with fare hike projections, a study must first be conducted and various factors should be assessed.

“Where are they getting their data? Did they study it? They just can’t blurt out things like that,” Guadiz said.

The LTFRB chief said that data must back assessments to avoid alarming the public, especially commuters.

Guadiz noted that in the past six years, a P2 hike was only implemented for jeepneys.