Jeepney modernization fears are totally unfounded, although major reforms are needed as the government is not yet ready on many fronts as revealed during Sen. Grace Poe’s hearing, which turned more into a grievance session that drowned the unheard voices of a few who welcome modernization.
March 2019 deadline dead?
The Land Transportation Franchising and Regulatory Board (LTFRB) backpedaled on its marching orders setting a deadline on jeepneys to consolidate into cooperatives or corporations by March 2019 after it faced a Senate gauntlet of resistance from jeepney leaders, who lamented a litany of problems and issues about modernization.
For one, there is no adequate financing available to replace all 220,000 jeepneys nationwide, which would augment the Development Bank of the Philippines’s (DBP) pilot financing of only P1.5 billion. Jeepney operators also detest getting only P80,000 per jeepney as subsidy equity for a financing on a Euro-4 vehicle costing P1.6 million, which now ballooned to P1.8 million to P1.9 million per unit. Worse, old jeepneys are to be melted as scrap metal in exchange for P30,000.
For operators, the risks are too high if the brand-new vehicles fail, as they could no longer bring back their units melted as scrap iron. And breakdowns are likely being subjected to stressful passenger overloads and 14 hours daily operating time. This worries DBP as warranties are guaranteed only for three years, leaving the rest of a seven-year daily amortization period unsecured.
Consolidation required but tedious? Another stumbling block is that while consolidation either through corporation or cooperative is required, getting registered as cooperatives takes six to 10 months owing to tedious procedures, while it only takes one to three days to register with the Securities and Exchange Commission (SEC).
Cooperative Development Authority (CDA) requires unrealistic economic surveys (business plans), daylong seminars inappropriate for less-schooled drivers, who prefer practical handson learning over lectures, which are repeated almost the same by the Office of Transport Cooperatives (OTC). CDA has become less developmental and more regulatory by requiring five reportorial requirements every year with onerous penalties, and many more past ridiculous regulations.
By law, minimum number of cooperators is 15 at P1,000 each for a total of P15,000 minimum paid-up capital, but OTC requires a P300,000 paid-up, causing delays in collections. Aren’t the jeepney units assets that could be considered as equity? If allowed, even the poorest associations can project bigness and bankability by converting their units as equity shares.
Rationalization means better incomes?
Contrary to fears that modernization’s route will affect livelihoods and incomes, Engr. Dave Garcia, of Atin’To Development Services and consultant to many transport groups, explained that if 30 percent or 400 of the 1,400 jeepneys plying the Pasig-Quiapo route are removed, the volume of commuters will remain, but the fares from the 400 units will now go to the remaining 1,000, which can be shared by everybody.
If this route grosses P3,500/jeepney, broken down into P1,000 operator’s boundary income, P1,000 for the driver and P1,500 for diesel, the perceived “lost revenues on the 400 jeepneys removed amounting to P1.4 million a day can now go to the 1,000 units for an additional income of P1,400/unit. The main objective of route rationalization is optimum use of capacity to meet commuter demand on varying hours, thus avoiding cutthroat competition during lean hours through a systematic “platoon dispatch system” that is only possible through fleet management under franchise consolidation.
Few leaders embrace modernization
What policy-makers must also hear are the voices of the unheard few, like Ramil Rodrigo of Curoda Transport-Koop and Ponciano Letrodo of Pamaqoda, who embrace modernization, and converted their associations to cooperatives despite much difficulty.
Rodrigo is an ex-military with a medal of valor for involvement with the UN-Peacekeeping force in East Timor, while Letrodo is a former Piston leader. Both believe that for modernization to succeed, cooperativism is the only way to become efficient.
Benefits from maintenance
Meanwhile, other leaders are clamoring for fare hikes to P12, but they don’t realize fuel efficiency can improve by 10 percent to 30 percent with better maintenance, thus, diesel at P50 per liter can mean savings or earnings of P5 to P15 per liter, much more than Piston’s earlier demand for a P6 per liter fuel discount, and enough to absorb rising prices.
Humans need maintenance like food, sleep, exercise, etc., similarly, vehicles need proper maintenance like change oil, filters, etc., but what is lacking is knowledge and reforms addressing this concern, which are actually provided by law. Sens. Grace Poe, Bam Aquino and Ralph Recto argued separately that modernization cannot be forced, but what cannot be compromised is safety (road-worthiness) and clean-air compliance.
E-mail: mikealunan@yahoo.com.