Subsidies: The government and collective owners are fighting for $22 billion a month

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The government is trying to close bus driver parities. The increase would be 31%. And it would affect half of the labor costs of urban transport companies in Buenos Aires. However, disagreements persist over the other half of carrier spending: fuel (diesel), tyres, new cars, bodywork, among others.

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THE 18,000 buses circulating in the city of Buenos Aires and suburbs -the so-called AMBA area- has received state assistance for $320 billion in 2022. Revenue from passenger levy was $44,000 million, i.e. less than 15% of the total they receive from subsidies.

Collective owners are asking for an adjustment to the monthly subsidies they receive. According to industry sources, the government is offering them a monthly supplement of $5 billion during the first half year. But they say they need a $27 billion restructuring. The difference is quite large, $22,000 million.

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The Ministry of Transport has agreed with the bus drivers’ union (see page 18) on a 31% increase for the first semester. In this way, he believes he is contributing to the fact that subsidies do not have to increase.

The collective journey in AMBA It has been stuck at $18 for over three and a half years. There were redials in October 2022 and January of this year and now that amount has doubled ($35). The increases will continue for the rest of the year, according to official sources.

The buses are operated by private companies. But both their public prices and subsidies are decided by the nation state. This has been the case since 2001. As was the case for public services (water, electricity, gas), these “regulated” prices could not follow the evolution of inflation from the end of 2001 to this part.

Group owners they began to limit the frequencies of circulation. On weekends and at night the services are more spaced than until mid-2022, when they were “locked out” because they do not collect subsidies,

In the industry they believe that if the Government does not recognize the cost increases, this will continue to happen. “It’s more of a business to save the car than to put it on the road. It is spent on tyres, diesel, unit wear, salaries and the state does not recognize it”, admit the carriers. “The State has not recognized 21% of the costs of the system,” says a report called the “Bondi Index” by Aeta, an association of companies in the sector.

“The state recognizes the cost of a tire as approximately $75,000 without VAT. However, the actual cost is $145,000. There is a 90% variance that transport does not assume. According to government calculations, each new car costs $18 million, but the market price is $52 million,” the bus drivers list among the “biases.” The companies say they pay $220 for every liter of diesel that they charge, but that the State compensates them with 170 dollars for that fuel.

According to the companies, fewer cars have been refurbished than they should in 2022 because the state has not put the money to do it. The buses had a service life of 10 years. It is what they have calculated that they last up to the vehicles until their deterioration. At the beginning of the year, the government extended the useful life of the units to 13 years, for all those that have been operating since 2012. «1,830 units should be renewed, but 1,416 have been changed. The 415 cars that have not been refurbished represent approximately $22 billion,” the carriers argue.

In 2001, the price of a bus ticket was 85 cents peso-dollar. Today, at $40, it’s 20 cents in the official dollar, or just over 10 cents if you take a blue quote.

Source: Clarin

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