Dr. Peter Phillips, Transport and Works Minister (right), discusses the take-over of the remaining two bus franchises in the Corporate Area with Ezroy Millwood, head of the National Transport Co-operative Society. - Norman GrindleyBy Lynford Simpson,
Staff Reporter
THE GOVERNMENT through the Jamaica Urban Transit Company (JUTC), will resume full control of the bus service in the Kingston Metropolitan Transport Region (KMTR) by April 20, Dr. Peter Phillips, Minister of Transport and Works, announced yesterday.
A phased takeover will begin on March 15 to be completed on or before April 20, the Minister said.
He was speaking Wednesday, following the signing of an agreement which will see the Government paying J$338 million to the National Transport Co-operative Society (NTCS) for the takeover of its Northern and Portmore franchises. NTCS boss Ezroy Millwood has promised that the co-operative will assist in ensuring a "smooth transition". The signing took place at the Minister's Pawsey Road, New Kingston office.
"We have agreed on a schedule of payment starting before the date of implementation and continuing into the latter part of this year," Dr. Phillips said. He disclosed that interest will be paid at Treasury Bill rates on the unpaid balances.
The settlement price is but a fraction of the J$7 billion the NTCS had sought. However, it is far from a done deal as, although the co-operative has withdrawn its lawsuit to recover the amount, the case has been referred to arbitration, as provided for under the old franchise agreement. NTCS boss Ezroy Millwood told The Gleaner after the signing he was confident the co-operative would be able to recover up to $5 billion through the arbitration process.
A breakdown of the $338 million will see the Ministry forking out $23 million to absorb the related debts of the NTCS; $109.7 million for settlement of disputes and differences; and $205 million for the unused portion of the franchise. The 10-year franchise agreement was signed in 1995.
Under the new agreement, the Ministry will purchase the entire fleet of roughly 350 buses from the NTCS following a valuation exercise. The NTCS will also retain the 80-bus fleet executive service it now operates. This is in addition to being allowed to operate buses on a number of hill routes like those terminating in Lawrence Tavern and Golden Spring. JUTC buses will not be operated on these routes.
Both services will be operated under a new sub-licence to be granted by JUTC. The standards, terms and conditions of these services will be subject to agreement between JUTC, Transport Authority and NTCS.
According to Mr. Millwood, the compensation package was only agreed to after he was allowed to retain the executive service and the hill routes which will see roughly a third (130) of his buses remaining on the road and a third (400) of his 1,200 employees retaining their jobs. He said the fact that the case dealing with breaches and losses incurred by the NTCS was now subject to arbitration was also important.
The Government had over the past two years bought out the Eastern franchise formerly owned by Metropolitan Transport Ltd., and the Papine and Spanish Town franchises held by the Arthur Chin-led Conurban Transit Ltd. In the case of Conurban, which was taken over about a year ago, compensation was in the region of $250 million.
Yesterday's signing brought to a close nearly two-and-a-half years of sometimes tedious negotiations. It now affords the Government the opportunity to bring order to a public transportation system that had been in a state of decline since the closure of the Jamaica Omnibus Service (JOS) in the early 1980s.
The JUTC which will now have responsibility for all routes in the KMTR. It has for the most part been highly commended for a job well done over the two years it has been in existence.
