LTFRB eyes drastic change: PUV franchise granted through bidding

The government is planning a drastic change in the way it awards franchises to bus and jeepney operators to ensure that the number of vehicles in an area does not exceed demand.

The Land Transportation Franchising and Regulatory Board (LTFRB) on Tuesday said franchises will now be bid out to interested operators of public utility vehicles (PUVs). This will replace the current system wherein the board merely approves applications for franchises.

“Today, the way it is done is that the board just gives out franchises at its own discretion,” Transportation Secretary Manuel Roxas II said.

Speaking at the LTFRB’s 25th anniversary celebration in Quezon City, Roxas said the granting of franchises would now be based on demand studies conducted by the agency.

“Our plan is to have the openings for these routes published in the papers and have an auction for interested parties. We want to remove the subjectivity in the process,” he said.

The studies would consider the population and the demand for transportation in certain areas to determine the number of PUVs they will get, he said.

The board currently observes a moratorium on new franchises.

Board member Manuel Iway said the new system would lead to higher revenues for the government.

“Today, when a franchise is granted, all the government gets is P4,000 per vehicle at most. But if we put it up for bidding, parties can offer higher fees to the government to sweeten the deal,” Iway said.