THE PAST week has been dominated by news reports and discussion concerning the contractor general's findings of breaches to the Government's procurement procedures by the management of the Jamaica Urban Transit Company (JUTC).

Many, including the Opposition, have understandably and correctly pointed to the fact that the uncovered breaches reflect very badly on the Government's much-proclaimed commitments to standards of good governance. No doubt, there is something to this.

More disappointingly, however, this whole episode highlights the extent to which there were those in the new administration, on the various boards of statutory agencies, etc., who, from the earliest days of the administration, considered public service as a means to secure personal benefits for themselves and/or their businesses. And there are certainly enough episodes occurring in past administrations to suggest that this is a problem which transcends the partisan divide and afflicts 'the political class' as a whole. Nationalist sentiment is in need of a genuine revival.

The contractor general has made some recommendations for changes to the system of Government procurement. Some are specific to the JUTC; others are more general, including for example, the suggestion that certain breaches to Government procurement rules should be criminalised. Some of the recommendations that have been made previously have now been incorporated into the revised Government procurement guidelines which were laid in Parliament last week.

Public resources

Overall, the contractor general, who to some might seem at times excessively zealous, is to be commended for his overall effort, which has highlighted the need for greater levels of integrity and probity in the management of public resources in Jamaica.

Another issue remains, however: It concerns the future of the JUTC and its viability and value, especially as we face a deepening social and economic crisis in the country. It may be difficult for some of us nowadays to recall the 'rolling catastrophe', which passed for a public transport system in the days prior to the JUTC. The 'franchise system', based as it was on individual ownership, or 'one-man - one bus' unleashed a cut-throat competition for passengers and fares across the roadways of the Kingston Metropolitan Region (KMR).

Buses raced each other and cut across traffic lanes causing mayhem on the roads in their quest to reach each and every fare-paying passenger before the competition. Schoolchildren were 'bounced' in preference for full-fare paying adults. The cry of "No schoolers!" at bus terminals must have triggered intense resentment in generations of youngsters who would have internalised a very negative view of the extent to which they were valued by the society. Buses were often maintained in a dirty and mechanically unsound condition as operators sought to minimise costs; a consideration which equally accounted for the low levels of training, conduct and deportment which were typical of the staff on the buses.

To make matters worse, the fast driving and air of reckless abandonment which typified the bus system began to attract devotees among the young and alienated those who, it seemed, relished the anti-order/pro-disorder atmosphere of the bus system. As a consequence, the bus system became a major contributor to the 'desperado' wild-West culture which was taking hold of our urban centres and so-called inner-city communities.

As the minister responsible for transport at the time when the decision was taken to close down the franchise system and to re-establish a centralised bus service in the KMR, I can say that social considerations were as central to that decision, or probably more so, than the economic issues; that is not to say that the economic issues were insignificant. The urban workforce was being brutalised and demoralised by the transport system. Lost work time due to traffic delays and the economic costs of lateness, traffic accidents, delays etc., were also not inconsiderable.

Having taken the decision, re-establishing a centralised system entailed tremendous costs to the public purse. The franchise agreements had to be terminated. Two of the three franchises were halted by way of difficult and intense negotiations regarding the terms of the closure; the third is still in the courts. Depots had to be built, rolling stock acquired and staff hired. All this was done at the considerable cost of more than $3 billion.

Deficiency

There were obvious difficulties in getting the system running, however, and some of these continue to bedevil the JUTC to this day. To begin with, we discovered that in the close to 20 years that had elapsed between the time when the old Jamaica Omnibus Service had been closed in the early 1980s, and the decision to establish the JUTC, the human resources with the specialist management skills essential to running a modern, urban, public-transportation system, had all but disappeared from the national landscape.

Tasks such as depot and terminal management, route planning, scheduling involving specialist and complex skills, are all essential to a modern, efficient transport system. There were, however, few persons with the requisite expertise available locally. Even now, almost 10 years after the formation of the JUTC, I have the impression that this deficiency remains.

Second, was the problem of effectively enforcing control over the routes in the face of extensive 'poaching' by 'illegal operators'. Apart from the fact that the illegal operators exposed members of the public to considerably greater risk because of their lack of regulated standards, insurance coverage and the like, they were also taking fare-paying passengers away from the company and reducing the prospects of its profitability.

Third, was the problem of fare-setting. As long as the company remained a publicly owned enterprise, it would be subject to the typical reluctance of political leadership everywhere to impose apparent hardship on the public by way of increased fares. The consequence of this reticence to set an economic fare was to impose large and continuing financial deficits on the company, with the resultant lowering of service standards and operational efficiencies. One solution to this, that had in fact been proposed when I was minister, was to have an 'automatic' fare-setting procedure established whereby the Office of Utilities Regulation would - as in the case of water, or electricity or telephones - be the ultimate fare-setting authority. Unfortunately, this proposal, though accepted, was never implemented.

So now, despite all the outcry about procurement breaches, the real fundamental challenge is how to overcome these problems which still persist and which threaten the survival of the JUTC. Currently, the company continues to sustain deficits in excess of $l00 million per month. At the same time, despite significant increases in the price of its inputs, it has not changed its fares in more than three years.

Ensuring viability

This position cannot be sustained, especially in the face of the growing crisis surrounding Government's finances. It is unlikely that an economic fare can be imposed on the public. Indeed, it is the case that most effective public-transport systems receive a subsidy from the public purse.

What the country and the company need now is a clear statement from the Government as to the extent of the subsidy and how it is to be applied. Even more, we need a clear statement as to the measures that are to be put in place to ensure the viability of the JUTC. At minimum, these should include a transparent, predictable and politically independent rate-stetting mechanism. Also, steps must be taken to confront the problem of illegal operators on its routes by setting and enforcing clear rules for taxi operators within the JUTC operating zones. And of course, competent management and cost controls must be maintained within the company.