JUTC costing taxpayers $25m each month for 300 unnecessary staff

Senior staff reporter

Thursday, October 12, 2017

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The Jamaica Urban Transit Company (JUTC) has revealed that it is overstaffed by 300 which is costing taxpayers $25 million per month.

The revelation, which was made by officials of the Transport and Mining Ministry, astonished members of the Public Administration and Appropriations Committee (PAAC) of Parliament at yesterday's meeting.

Managing director of the State-run bus company Paul Abrahams said the international benchmark is a ratio of 2.5 drivers to one bus and five staff to one bus, which means the JUTC should be in the region of about 800 employees.

“I left the JUTC in 2012 operating 400 buses with 1,780 persons… I think that's the optimum level for the JUTC now… I think it's fair to say that we do have too many persons right now,” he told the committee.

The bus company currently employs 2,250 people. However, despite the mathematical gap of 470 Abrahams said that in the Jamaican context this would equate to overstaffing by about 300.

He said that there are a significant number of temporary positions at the company and that the Human Resources Department should be completing a rationalisation process by next week to make recommendations to the minister “as to what will have to happen to these additional persons which will need to be moved from the JUTC”.

The haemorrhaging company's net operating loss has already reached $256.7 million since the start of the financial year.

In February this year, the Jamaica Public Bodies book tabled in Parliament stated that the JUTC was expected to end the 2017/2018 financial year with a loss of just over $4.5 billion. That compares to a loss of $2.9 billion projected for the year 2016/17, and $1.5 billion in 2015/16.

However, the forecast highlighted total revenue flows of $6.3 billion this financial year, which began on April 1, compared with last year's projected $5.1 billion intake.

But it also stated that the company's expenses are expected to increase to $13.6 billion in the current financial year.

Yesterday, permanent secretary in the Ministry of Transport and Mining Dr Alwyn Hayles said some of the engineering and administrative services can be outsourced to minimise staff.

“We are looking at putting in place some efficiency measures in terms of the staffing, structures, fuel usage, and also other measures that can improve the operations of the JUTC,” he assured.

However, he noted that it could take some time for the company to reach an agreement with the trade unions on a rationalisation process for permanent staff.

Abrahams also disclosed that when the new JUTC board took office in June last year it discovered that almost a quarter of the fleet, or more than 100 buses, were parked because there were no parts to repair them.

He said another 40-50 buses had serious damage, resulting in the fleet decreasing to 350. “In October 2016 the fleet reached a low of close to 350 operating units. We suffered severely at that time. We managed to get the fleet back into a reasonable 400 position by January-February,” he stated. Only 35 new buses have been added to the fleet for the past three years.

However, he said there could be trouble ahead again as a number of buses are now showing signs of major defects caused by poor maintenance and exacerbated by heavy wear and tear due to loading, as well as the use of non-manufacturer lubricants.

“Those engines and transmissions are starting to show up right now. The damage for such a unit would not show immediately, it's after a period of wear that you would see these damage start to appear,” he explained.

The Government has allocated $1.3 billion to purchase spare parts for buses, but Abrahams said what is really needed is at least $2.4 billion, inclusive of parts and refurbishing costs, to keep the rolling stock reliable.

He that the international average lifespan of a unit is 20 years, but JUTC buses average 10 years due to poor maintenance and terrain among other factors.

“By the end of the tenth year the bus is in bad shape,” he said, adding that within another year the JUTC will need new units.

He acknowledged that the company still has major financial challenges and is behind on its payables, but stressed that it is “surviving” and rolls out 410 buses daily.




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